5 of the Biggest-Baller Options Trades Ever! (2024)

Options trading can be a lucrative business for those who know how to play the game. From front-running market news to capitalizing on Black Swan events, traders have made millions by betting on the right options at the right time. For the uninitiated, there are 2 basic flavours of options — a call and a put — you’d buy the former if you thought the price was going up, and the latter if you expected the price to drop.

In this article, we’re going to explore five extraordinary options trades that made it big, generating huge profits for traders who knew how to read the market signals.

Algo front runs market news

In March 2015, an unidentified trader made a profit of over $2.4 million in just 28 minutes by buying $110,000 worth of calls on Altera stock.

It all started with a news release saying that Intel was in talks to buy Altera.

Literally, seconds later, a trader bought 3,158 out-of-the-money call options with a strike price of $36 for $0.35 per contract — which ended up being worth $7.60 less than 30 minutes after placing the trade.

It’s likely that the clever trader had an algorithm which picked up and analysed the news. Although we think it might have beenBiff with his almanack.

Universa Longs the Vix with SPY Puts

“Black Swan” hedge fund Universa made a $1 billion profit buying SPY (S&P500 index) Puts onAugust 24th, 2015— right as the market flash crashed, down around 20%, and the volatility index, VIX, soared about 50%. Talk about great timing.

Paul Tudor Jones and the overpriced SPY

On October 19, 1987 —Black Monday— the market absolutely collapsed, but this was great news for trader Paul Tudor Jones, who made a whopping $100 million profit.

Jones had been buying SPY (S&P500) Puts after realising that the stock valuations were way overpriced, especially considering the 10% interest rate at the time.

But of course, these were absolutely nothing like the market conditions we’re seeing ourselves in today, with raging inflation, a frothy market and massive rate hikes right?

50 Cent’s VIX accumulation

Between 2018 and 2020, an anonymous trader by the name of 50 Cent was buying up massive tranches of the VIX volatility index — Around $800M worth in fact.

Along with $1.3B in Corporate Puts, $350M in SPY & Euro Stoxx Puts and $145M in Gold hedges, 50 Cent was certainly bearish, and it paid off big time when one recent event shook the world: Covid.

When Covid walloped the world in 2020, the markets instantly collapsed. Whilst longs were left totally underwater, 50 Cent had just bagged a tidy $2.6B profit.

Now what’s even more interesting is that in February of this year,50 Cent bought another ton of VIX calls, betting that it would spike to the 50-level by the end of May.

Big Baller Bitcoin Bet

On 30 October 2020, an unknown trader bought 16,000 Bitcoin call options on Deribit with an expiry of January 29, 2021, and a $36,000 strike price.

The initial investment was 48 BTC, or $638,400, at the entry price of around $13,700. And it ran, and ran and ran, and our anon trader netted a gain of 1,648 BTC, or $58.2 million — a whopping 9,118% return on investment which outperformed some of the best currency market bets ever made.

Careful though — options aren’t for everyone

All of these are obviously phenomenal trades which paid off well for those involved.

Recommended next reads

Quite the year for 'American Alpha'. Lane Clark 6 months ago
Is GARS all it is cracked up to be? Stephen Walker, CFA CAIA 8 years ago

Whilst options desks are a great way to go if you fancy yourself as a budding Michael Burry, a word of warning — most retail options traders lose money, but there are plenty of institutions which are very good at making huge profits selling options contracts.

That’s mostly because it’s complicated to play options — really complicated, and as such, they’re not generally recommended for new traders.

Options alternatives for retail crypto holders

The crypto world sometimes has some pretty extreme volatility, and the sort of 10% moves which are rare and devastating in traditional financial markets, are commonplace in crypto.

And when we’re talking about Bitcoin prices in the many thousands of dollars, volatile down-days can be devastating to your wallet and your mood.

Many enthusiasts want a way to hedge against downside movements and offset their risk, but find the complexity and sometimes high barriers to entry of options desks offputting (if they even know about them).

And sure, there’s using a stop loss, but they don’t always work as intended, and once triggered, you lose your exposure to upside gains, so whilst useful, they don’t always work out in your favour.

Fortunately, this is why we built Bumper, an altogether new and novel way for crypto users to hedge risk. Basically, Bumper prevents the value of your protected tokens from sinking below a certain point, but you still get to enjoy the upside gains if the market pumps.

Bumper redefines risk markets, making them easier and more accessible for all crypto holders and makes it super simple. Just pick a floor and a term length, and boom, you’re protected from any further losses below that floor. No need to learn the “Greeks” or have a PhD in technical analysis; just a few clicks and you get the peace of mind you’ve been looking for, knowing that whatever happens, your crypto is safe.

Disclaimer: Any information provided on this website/publication is for general information purposes only, and does not constitute investment advice, financial advice, trading advice, recommendations, or any form of solicitation. No reliance can be placed on any information, content, or material stated on this website/publication. Accordingly, you must verify all information independently before utilising the Bumper protocol, and all decisions based on any information are your sole responsibility, and we shall have no liability for such decisions. Conduct your own due diligence and consult your financial advisor before making any investment decisions. Visit our website for fullterms and conditions.

5 of the Biggest-Baller Options Trades Ever! (2024)

FAQs

What is the 3 5 7 rule in trading? ›

The 3–5–7 rule in trading is a risk management principle that suggests allocating a certain percentage of your trading capital to different trades based on their risk levels. Here's how it typically works: 3% Rule: This suggests risking no more than 3% of your trading capital on any single trade.

Who is the greatest options trader of all time? ›

George Soros: Breaking Banks and Building Billions

His most famous trade—betting against the British pound—earned him the label of “the man who broke the Bank of England.” Soros's strategies and successful trades have positioned him as a towering figure in the realm of high-stakes financial trading.

How did one trader make $2.4 million in 28 minutes? ›

For one trader, the news event allowed for incredible profits in a very short amount of time. At 3:32:38 p.m. ET, a Dow Jones headline crossed the newswire reporting that Intel was in talks to buy Altera. Within the same second, a trader jumped into the options market and aggressively bought calls.

What is the most traded options? ›

SymbolPriceOptions Volume
AMC$6.851,908,067
TSLA$177.551,218,328
AAPL$187.431,037,088
NVDA$913.56796,830
45 more rows

What is 90% rule in trading? ›

While it can be a lucrative venture for some, it is also known to be a high-risk activity. This is where the 90 rule in Forex comes into play. The 90 rule in Forex is a commonly cited statistic that states that 90% of Forex traders lose 90% of their money in the first 90 days.

What is No 1 rule of trading? ›

Rule 1: Always Use a Trading Plan

You need a trading plan because it can assist you with making coherent trading decisions and define the boundaries of your optimal trade. A decent trading plan will assist you with avoiding making passionate decisions without giving it much thought.

Does Warren Buffett do options trading? ›

Throughout his investing career, Buffett has capitalized on the advanced options-trading technique of selling naked put options as a hedging strategy.

Who is most successful day trader ever? ›

Who is the most successful day trader? There are a lot of successful traders but Jesse Livermore is often regarded as the most successful day trader. His success came from trading on the capital earned by himself and by trading on setups made by himself.

What is the most profitable trading strategy of all time? ›

One of the ways beginners can implement the most profitable trading strategies effectively is by embracing the buy-and-hold strategy. This involves researching companies with solid fundamentals and stable earnings, then holding their stocks for a long time without being swayed by short-term market fluctuations.

Can I make 1000 per day from trading? ›

Conclusion. Making a daily profit of Rs. 1000 in the stock market is not guaranteed and depends on numerous factors, including your trading skills, discipline, and market conditions. Following a well-structured approach can improve your chances of success.

Are there any billionaire day traders? ›

The top billionaire day traders, like Jim Simmons, Ken Griffin, and George Soros, have different ways of trading, but they all use a mix of technical analysis, fundamental analysis, and risk management to make their choices.

Has anyone become a millionaire from trading? ›

While some traders have been successful in becoming millionaires through scalping trading, many others have lost money and blown up their trading accounts. It is important to note that trading carries significant risks, and traders should only trade with money they can afford to lose.

Which option buying strategy is most profitable? ›

1. Bull Call Spread. A bull call spread strategy is driven by a bullish outlook. It involves purchasing a call option with a lower strike price while concurrently selling one with a higher strike price, positioning you to profit from an anticipated gradual increase in the stock's value.

What is the riskiest option strategy? ›

Selling call options on a stock that is not owned is the riskiest option strategy. This is also known as writing a naked call and selling an uncovered call.

What is the safest option trade? ›

The safest options strategy for generating income is selling cash-secured puts. An options trader sells put options with this strategy and collects premiums while taking on the obligation to buy the underlying stock at the strike price if assigned.

What is the 80 20 rule in trading? ›

In investing, the 80-20 rule generally holds that 20% of the holdings in a portfolio are responsible for 80% of the portfolio's growth. On the flip side, 20% of a portfolio's holdings could be responsible for 80% of its losses.

What is the golden rule of traders? ›

Let profits run and cut losses short Stop losses should never be moved away from the market. Be disciplined with yourself, when your stop loss level is touched, get out. If a trade is proving profitable, don't be afraid to track the market.

What is the 11am rule in trading? ›

It is not a hard and fast rule, but rather a guideline that has been observed by many traders over the years. The logic behind this rule is that if the market has not reversed by 11 am EST, it is less likely to experience a significant trend reversal during the remainder of the trading day.

What is the 80% rule in trading? ›

The Rule. If, after trading outside the Value Area, we then trade back into the Value Area (VA) and the market closes inside the VA in one of the 30 minute brackets then there is an 80% chance that the market will trade back to the other side of the VA.

References

Top Articles
Latest Posts
Article information

Author: Frankie Dare

Last Updated:

Views: 5571

Rating: 4.2 / 5 (53 voted)

Reviews: 92% of readers found this page helpful

Author information

Name: Frankie Dare

Birthday: 2000-01-27

Address: Suite 313 45115 Caridad Freeway, Port Barabaraville, MS 66713

Phone: +3769542039359

Job: Sales Manager

Hobby: Baton twirling, Stand-up comedy, Leather crafting, Rugby, tabletop games, Jigsaw puzzles, Air sports

Introduction: My name is Frankie Dare, I am a funny, beautiful, proud, fair, pleasant, cheerful, enthusiastic person who loves writing and wants to share my knowledge and understanding with you.