The Shocking Story of How James Cordier Lost $150 Million Trading Options

Photo by Yosh Ginsu on Unsplash

Who is James Cordier

James Cordier of managed a hedge fund where he traded options.

He was known as an options trading legend, and many people read his options trading book, The Complete Guide to Option Selling: How Selling Options Can Lead to Stellar Returns in Bull and Bear Markets.

How Did OptionSellers Blow Up?

James Cordier decided to leverage his fund in short call positions on natural gas and a short put position on crude oil.

Soon after he placed these trades, they both went against him, forcing him to get margin called and sell at a loss.

Not only did he have to sell at a loss, but his investors had to write a check to cover his margin call.

A chart of crude oil on Tradingview.
Crude Oil Chart on TradingView

The chart above shows crude oil in 2018 when James Cordier sold put options, a bullish trade.

As you can see from the consecutive red weekly candles, the puts he sold lost his money.

A chart of natural gas on Tradingview.
Chart of Natural Gas on TradingView

The image above shows a chart of natural gas futures in 2018 when James Cordier sold call options.

Selling call options is a bearish trade, and the consecutive weeks of green candles destroyed his position.

Understanding how to read stock charts is crucial if you want to become a successful trader. If you don’t have a charting tool, you can sign up for a TradingView free trial and get access to advanced charting tools to improve your analysis.

James Cordier’s Biggest Mistake

The biggest mistake James Cordier of OptionSellers made was trading too large and not hedging his portfolio.

He was selling naked call and put options on margin, which is taking on significant risks.

One big move can make your account tumble when you sell options with too much leverage.

James Cordier’s Apology Video

After telling his clients that he not only lost all their money, but they owed him a check, he made a cringy apology video that went viral online.

You can watch the video here, but it is just James Cordier sitting at a table talking to his investors about losing all of their money.

How to Learn How to Trade Options Successfully

If you want to learn safe options trading strategies that generate consistent income, the HaiKhuu Trading community is an excellent resource.

The HaiKhuu community includes over a quarter million retail traders that help each other learn and become profitable on the stock market. They even provide free live voice calls anytime the stock market is open.

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Mike Toney-Hoffman
Long-Term Perspective

Teaching you how to analyze the financial markets with the best tools.