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.

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

How one trader made $2.4 million in 28 minutes? ›

When the stock reopened at around 3:40, the shares had jumped 28%. The stock closed at nearly $44.50. That meant the options that had been bought for $0.35 were now worth nearly $8.50, or collectively just over $2.4 million more that they were 28 minutes before. Options traders say they see shady trades all the time.

Who are the most successful options traders? ›

Who is the Richest Option Trader in the World? The most famous billionaire traders are George Soros, Carl Icahn, Ray Dalio, David Tepper, and James Simons. The Richest and most famous active traders in the world in 2023 are: Carl Icahn (17.6 billion dollars) George Soros (6.7 billion dollars).

What is the most profitable option strategy? ›

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.

How do you avoid top 10 mistakes in option trading? ›

If you want to trade options, be sure to avoid these common mistakes.
  1. Not having a trading strategy. ...
  2. Lack of diversification. ...
  3. Lack of discipline. ...
  4. Using margin to buy options. ...
  5. Focusing on illiquid options. ...
  6. Failing to understand technical indicators. ...
  7. Not accounting for volatility. ...
  8. Bottom line.
Feb 5, 2024

How to earn 1k per day from trading? ›

How to Earn 1000 Rupees Everyday From Stock Market
  1. Education is the foundation. ...
  2. Develop a trading plan. ...
  3. Practice with a demo account. ...
  4. Start small and grow gradually. ...
  5. Diversify your portfolio. ...
  6. Risk management is key. ...
  7. Keep emotions in check. ...
  8. Continuous monitoring and adaptation.
Nov 24, 2023

Can I make 1000 per day from trading? ›

Earning Rs 1000 per day in the share market might seem ambitious, but it is achievable with the right strategies, knowledge, and discipline. The share market offers numerous opportunities for traders and investors to generate consistent profits.

Does Warren Buffett trade in options? ›

One of Warren Buffett's favorite trading tactics is selling put options. He loves to find assets that he thinks are undervalued and agrees to own them at even lower prices. In the interim, he collects option premium today which should the asset go lower in price it also helps reduce his cost basis.

Who is the king of option trading? ›

Some of the best options traders in India are Rakesh Jhunjhunwala, Premji and Associates and Radhakrishnan Damani.

Has anyone become a millionaire trading options? ›

Yes. Many people have become millionaires trading options. But you have to work at it - it doesn't just happen magically. Even if you follow trade alerts from a great service like The Empirical Collective dot com, you still have to do your own due dilligence and manage your trades properly.

How do you never lose in option trading? ›

The option sellers stand a greater risk of losses when there is heavy movement in the market. So, if you have sold options, then always try to hedge your position to avoid such losses. For example, if you have sold at the money calls/puts, then try to buy far out of the money calls/puts to hedge your position.

What is the 1% rule in options? ›

The 1% rule demands that traders never risk more than 1% of their total account value on a single trade. In a $10,000 account, that doesn't mean you can only invest $100. It means you shouldn't lose more than $100 on a single trade.

Which option strategy has highest return? ›

A Bull Call Spread is made by purchasing one call option and concurrently selling another call option with a lower cost and a higher strike price, both of which have the same expiration date. Furthermore, this is considered the best option selling strategy.

What is the trick for option trading? ›

Avoid options with low liquidity; verify volume at specific strike prices. calls grant the right to buy, while puts grant the right to sell an asset before expiration. Utilise different strategies based on market conditions; explore various options trading approaches.

What is the number one mistake traders make? ›

One of the biggest mistakes that new traders make is jumping into trading without proper education. It's essential to educate yourself about the markets and trading strategies before you start trading.

What is the safest option strategy? ›

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.

How much money do day traders with $10000 accounts make per day on average? ›

With a $10,000 account, a good day might bring in a five percent gain, which is $500. However, day traders also need to consider fixed costs such as commissions charged by brokers. These commissions can eat into profits, and day traders need to earn enough to overcome these fees [2].

Is it hard to make $100 a day trading? ›

You're really probably going to need closer to 4,000 or $5,000 in order to make that $100 a day consistently. And ultimately it's going to be a couple of trades a week where you total $500 a week, so it's going to take a little bit more work.

Can you really become a millionaire from trading? ›

Becoming a Stock Market Millionaire Is Indeed Possible, but It Requires a Combination of Strategic Thinking, Risk Management, and a Long-Term Perspective. It's About Planting the Seeds of Investment and Patiently Nurturing Them as They Grow into Mighty Oaks.

How much does the highest day trader make? ›

Day Trader Salary
Annual SalaryMonthly Pay
Top Earners$185,000$15,416
75th Percentile$105,500$8,791
Average$96,774$8,064
25th Percentile$56,500$4,708

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