Watch the 2014 1 hour interview here - http://goo.gl/9BbilO
Karen the Supertrader went from her day-job as a CFO to an option trader and turned $100,000 in 2007 into $41 million by 2011. This is her story, as told by Karen herself with Tom Sosnoff on tastytrade.
***This video is an interview of a past tastytrade guest, Karen Bruton. We've become aware that she and her firm are currently under SEC investigation for her accounting and reporting practices. Karen is not affiliated with tastytrade in any way other than as a prior guest on our program, last appearing on the network in 2014. We at tastytrade believe in full and transparent disclosure by money managers and we continue to advocate on behalf of the retail trading community.***
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I don't think a year ever goes by where a handful of smaller traders don't at least double their accounts on the back of a few large bets that worked out. The video title made it seem like she generated an over 10,000% return in three years which would indeed be legendary. Doubling your account in three years is nice, but it isn't groundbreaking. If your surveyed the population of traders at the end of every year you would find in every year that some small percentage of traders doubled their accounts.
It's funny. Back in 2002 when Karen here decided to pony up 20 grand for "trading education" all she was learning is the basics, which now, we can all get for free. And what has taken it's place, is today's "trading education" is literally teaching people how to make brokers money. Example, trade alot, short term profits, day trading, ect.
Almost all "Educators" are attached to some brokerage firm, and are paid to bring new clients on board. They are teaching you all the wrong things. In fact, they are in bed with the broker. There is a huge conflict of interest in todays trading education market.
If anyone out there is just starting out, I suggest learning about ALL markets, and DO NOT stick to just one. Alot of educators out there will tell you, oh you should only pick Forex, AND only trade one or two pairs. This is the worst advice you will ever get. Following this advice will ensure the broker makes maximum profit, not you. (If i only traded one currency pair, what happens when that pair loses its volatility and doesn't provide a profitable opportunity?)
Same goes with Options, or Equities, or Futures, or Minis, or whatever. Learn them all. Then learn to follow where the money is. Where is the volitility the the highest at the current moment, come up with your OWN trade ideas and trade. The name of the game is long term profits.
It's hard learning it all. Luckily Think Or Swim has done right by us little guys and offer the platform and paper trading for free.
I am a beginner, with less than 25k capital, so I am pretty much swimming uphill already. I am looking for a mentor, so if anyone out there wants a protege who comes up with golden trade ideas. HMU.
If you want to make money, tune out the noise -- and all financial "stuff" is 99% noise. Tune into the 1% that is important, which nobody can teach you. You have to discover it yourself. Bill Gates and Warren Buffett never went to a "How to get Rich" class. They were tuned into the 1%, which was the source of their riches. It's true for everyday successful traders, as well.
hi and thanks for all the very great videos ! i am trying to learn something on trading essentials. But i am confused. I understand that stock picking is difficult _ 11:04 _ But i think that to foresee which stocks go up and which ones go down should be an even more challenging task. I am sure i am missing something.
She was investigated by the SEC for fraud for hiding $50m in losses while collecting huge fees from investors: https://www.thestreet.com/story/13593247/1/karen-the-supertrader-s-winning-strategy-relied-on-fraud-sec-alleges.html
Karen Burton method of trading was not bad, but as always involves risks. Where she got in trouble was hiding her losses by rolling them of to the next month and by doing that was able to collect her trading fees. What she was running was ponzi scheme. where those who pulled early received all of their money while those who entered at the end got very little. She actually got off quite easy, paying a $100,000 fine, admitting no wrong doing, of course her company could not have access to the money put in by what was left of the investors.
Well if you don't keep track of your trading and you're pulling in millions of dollars, you're already on the SEC's radar. You're now considered low hanging fruit to them and the IRS. She may be perfectly innocent and is simply under investigation, but she very well may also be guilty which just proves it doesn't matter who you are, someone is watching.
what she did is not really fraud this is more about people who dont understand options
all of the incentive structures were written in the funds memo so buyer beware
now the incentive structure does create a ponzi scheme like situation but its clearly stated and not hidden
what she did was she sold options and got the investors to agree to a ridiculous incentive structure where she got paid fees for the options premiums as realized gains and even if the options went into the money that was considered unrealized losses that did not figure in the incentive payout this is a stupid structure but it was stated and agreed upon
so when the options went into the money she started rolling them which is quite standard
then in the memo the investor agreed that redemptions from the fund would be paid without considering the unrealized losses which was great if u were the first ones out and horrible if u stayed in and took the losses of previous investors
what this did was made it appear like the redeeming investors received their full principal and realized options premiums makings this an attractive investment for new investors
new investors then came in to share in the unrealized losses to make a ponzi scheme to replace the ones getting out
if this was only done secretly then she would be guilty of fraud
but all of this was agreed upon and written in the memo
this is more about bitter stupid investors who bought into an agreement they did not understand and now want the government to bail them out and punish the person who exploited their stupidity
Would love to listen to someone who loss a lot of money. Can you do that because its a bit strange to listen to all these success without failure. Sometimes when things are too good to be true its sometimes is not true. So please upload something that you know who loss a lot of money. Im very curious what they will say..
I bet she wishes that she just stuck with managing her own money. She's got a very strong trading system and manages risk well. It's only when she got into managing other people's money that she became greedy.
16:01 "My philosophy is once you give me the money you're not getting it back" Couldn't be more true. SEC accused her of defrauding her investors: https://www.thestreet.com/story/13593247/1/karen-the-supertrader-s-winning-strategy-relied-on-fraud-sec-alleges.html
Not such a Supertrader after all. Carrying the loses so she carry on collecting her incentive. Netting over $7M in fees it seems she was not entitled to (allegedly) Check it out https://www.sec.gov/litigation/complaints/2016/comp-pr2016-98.pdf
Randall B- This is like a witch hunt by SEC/FINRA.
I, was an award winning stock-broker/manager for 33 successful years, was physically attacked by the new manager. I did the company a favor by taking the manager job (interim basis) against my desires and quit 8 months later the interim job of branch manager to help the company. Later I was the physically assaulted by the "then newest" branch manager and had to go to the emergence room. After terminated for no reasonable cause, arbitrators expunged the three charges with little details, because they had no basis. I had a perfect U4 document on file with not one complaint before this, for 33 years. All charges were erased and the arbitrators added the following quote "because of the defamatory language used by my BD firm." By then I had lost my business and was expected (I guess to start over in the brokerage business which I could not do physically, and emotionally. I had to have my very vague counter charge. I went on disability for many reasons, and also won my Workers Comp case, which my employer said I didn't deserve in the beginning. Eventually common sense prevailed, but I still never received any money for my charges including the loss of my business.
I'd be curious to see if her short options actually went In The Money during the "market crash" in August '15. Obviously when that happened, she had to stay mechanical and roll down and out her Puts, and on paper, that would be taking a loss. Her whole strategy is based on this. But based on the fact that the market rebounded so quickly, she would have never been at risk of losing the trade at expiration. I would love to see the data on this.
She did generate profits. it was the order in which she was realizing these profit and losses. She "timed" the realization of profits and losses to guarantee that she gets her fees. You would still need to be a GENUIS to take trades and arrange them so carefully
I read the document , basically a bitter rich whiny investor complaining about her fees . So what... she tried to make sure she collected her fees. At the end of the day , she generates profits for these ungrateful rich investors.
From TheStreet dot com - "It wasn't innovative strategy behind Karen the SuperTrader's
consistent returns after all, the U.S. Securities and Exchange
Commission says, but a much more tried-and-true technique: fraud."
Their excitement is really juvenile. Can't they see what's going on? Her strategy is basically "I want to make lots of money before I'm wiped out". There are many people who try this wide strangle approach and most eventually eat it. Of course the law of probabilities says there will be one or two that don't get nailed. And , in this case, her name is Karen. But he says "I wish there were more like you". But the law of probabilities says THERE CAN"T BE MORE LIKE HER. I think they believe she's found a magical way to hedge risk. Yep, people at Barings thought the same thing.
She's never been a "bitter rich whiny investor", and shes actually did not generated profits for "these ungrateful rich investors". You seem to hate money and angry at the people you don't even know. I suggest you change the way you look at wealth or you will never have one yourself.
I read the document , basically a bitter rich whiny investor complaining about her fees . So what... she tried to make sure she collected her fees. At the end of the day , she generates profits for these ungrateful rich investors
Does Miss Karen offer apprenticeship to the financially poor person like me. I will serve her coffee, I will run her errands, I will was her car, I will drive her to her., I will walk her dog if she has one, all for free for her mentorship.
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