OptionSellers.com Investors Suffer Catastrophic Loss Event
Posted on Monday, November 26th, 2018 at 9:34 am
Erez Law is currently investigating OptionSellers.com and/or INTL FC Stone regarding a reckless options trading strategy. If you suffered investment losses due to investments with OptionSellers.com and/or INTL FC Stone, Erez Law can help. INTL FC Stone is the OptionSellers.com’s futures broker.
OptionSellers.com sells options, which give investors the right to buy or sell financial products at an agreed price by a given date. This is typically a reliable yet risky investment strategy that is ideal when the market is stable, however when there is instability, it can be extremely risky.
In early November, turmoil in energy markets began when crude oil futures dropped about 7% on a Tuesday, followed by an increase of 18% in natural gas on a Wednesday, then a 16.5% decline on a Thursday. This caused the OptionSellers.com hedge fund to face a perfect storm of losses.
On November 15, 2018, OptionSellers.com notified investors via email about a “Catastrophic Loss Event.” The letter read, “Today which was to be the final day of liquidation, the market flared as prices appear to have been caught in a ‘short squeeze.’ The speed at which it took place is truly beyond anything I have seen in my career. It overran our risk control systems and left us at the mercy of the market. In short, it was a rogue wave and it overwhelmed us. Unfortunately, this has resulted in a catastrophic loss. Our clearing firm, FC Stone now requires us to liquidate all positions. We hoped to have this done today. If not, it will be completed tomorrow. Your account could potentially be facing a debit balance as of tomorrow. OptionSellers.com will be processing fee credits over the course of the coming days to help alleviate debit balances. What these will be will be determined after all positions are cleared. This has in effect, crippled the firm. At this point, our brokers at FC Stone have been assisting us in liquidation.”
OptionSellers.com lost a substantial portion of their investors’ assets due to a short call position in crude oil. OptionSellers.com was not a conservative investment. Instead, it traded naked rather than covered, which left investors exposed and subject to significant losses of all of their money plus owing on a margin call. Since the time of the announcement, the OptionSellers website and social media pages have been shut down.
Not only did investors lose all of their money, but investors now owe FC Stone a margin call (debt call notice), which payments will be required to bring the balance back up to zero. Failure to pay the margin call will result in an unpaid bill that is subject to collections. It is alleged that OptionSellers.com engaged in a negligent and risky trading strategy that was not suitable for its clients.
Rosemary Veasey, Matthew Donovan, James Cordier, Michael Gross, and Alicia Zedella are part of the OptionSellers team.
Pursuant to FINRA Rules, member firms are responsible for supervising a broker’s activities during the time the broker is registered with the firm. Therefore, OptionSellers.com may be liable for investment or other losses suffered by its customers.
Erez Law represents investors in the United States for claims against brokers and brokerage firms for wrongdoing. If and have experienced investment losses, please call us at 888-840-1571 or complete our contact form for a free consultation. Erez Law is a nationally recognized law firm representing individuals, trusts, corporations and institutions in claims against brokerage firms, banks and insurance companies on a contingency fee basis.