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"I Experienced A Catastrophic Financial Loss": How Options Trader 'Captain Condor' Led His Followers To A $50 Million Wipeout

MW 'I experienced a catastrophic financial loss': How options trader 'Captain Condor' led his followers to a $50 million wipeout. Captain Condor's rise coincided with a boom in retail investors trading risky '0DTE' options. Some members of a group led by trader David Chau, pictured here during a podcast appearance, lost most of their life savings over Christmas.The options trader known as "Captain Condor" and his acolytes experienced a wipeout last week that incinerated tens of millions of dollars and cost some investors their life savings.The U.S. options industry is on track for a sixth straight year of record activity in 2026, according to data from the Options Clearing Corporation, or OCC. Since the start of the COVID-19 pandemic, retail investors have increasingly become involved in trading derivatives such as options. Derivatives are sophisticated financial products initially developed to help p

"I Experienced A Catastrophic Financial Loss": How Options Trader 'Captain Condor' Led His Followers To A $50 Million Wipeout

Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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{"i18n":{"language":"en_US"},"data":{"magic":2,"id":516976736461496,"tweetId":"516976736461496","gmtCreate":1767238045566,"gmtModify":1767238049450,"author":{"id":4095317771450410,"idStr":"4095317771450410","authorId":4095317771450410,"authorIdStr":"4095317771450410","name":"NellyPembers","avatar":"https://static.tigerbbs.com/a4ee148ae823c1aea7312be4646bf7b1","vip":1,"userType":1,"introduction":"","boolIsFan":false,"boolIsHead":false,"crmLevel":11,"crmLevelSwitch":0,"individualDisplayBadges":[],"fanSize":15,"starInvestorFlag":false},"themes":[],"images":[],"coverImages":[],"title":"","html":"<html><head></head><body>GoFundMe should not be allowed for these regards&nbsp;</body></html>","htmlText":"<html><head></head><body>GoFundMe should not be allowed for these regards&nbsp;</body></html>","text":"GoFundMe should not be allowed for these regards","highlighted":1,"essential":1,"paper":1,"likeSize":3,"commentSize":0,"repostSize":0,"favoriteSize":0,"link":"https://ttm.financial/post/516976736461496","repostId":2595109770,"repostType":2,"repost":{"id":"2595109770","kind":"highlight","weMediaInfo":{"introduction":"Dow Jones publishes the world’s most trusted business news and financial information in a variety of media.","home_visible":0,"media_name":"Dow Jones","id":"106","head_image":"https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99"},"pubTimestamp":1767224849,"share":"https://ttm.financial/m/news/2595109770?lang=en_US&edition=fundamental","pubTime":"2026-01-01 07:47","market":"sg","language":"en","title":"\"I Experienced A Catastrophic Financial Loss\": How Options Trader 'Captain Condor' Led His Followers To A $50 Million Wipeout","url":"https://stock-news.laohu8.com/highlight/detail?id=2595109770","media":"Dow Jones","summary":"MW 'I experienced a catastrophic financial loss': How options trader 'Captain Condor' led his followers to a $50 million wipeout. Captain Condor's rise coincided with a boom in retail investors trading risky '0DTE' options. Some members of a group led by trader David Chau, pictured here during a podcast appearance, lost most of their life savings over Christmas.The options trader known as \"Captain Condor\" and his acolytes experienced a wipeout last week that incinerated tens of millions of dollars and cost some investors their life savings.The U.S. options industry is on track for a sixth straight year of record activity in 2026, according to data from the Options Clearing Corporation, or OCC. Since the start of the COVID-19 pandemic, retail investors have increasingly become involved in trading derivatives such as options. Derivatives are sophisticated financial products initially developed to help p","content":"<html><head></head><body>The options trader known as &#34;Captain Condor&#34; and his acolytes experienced a wipeout last week that incinerated tens of millions of dollars and cost some investors their life savings.A strategy that had reliably produced winnings for the trader - whose real name is David Chau - and his group of roughly 1,000 investors went awry just before Christmas, saddling them with what was, by one count, a $50 million loss.The fatal flaw - what finally caused Chau and his crew to lose most or all of their trading capital - was his use of the Martingale betting system. In the Martingale system, the bettor doubles down after each loss, hoping to recoup their money and then some.After a streak of mounting losses, Chau and his followers risked it all on Christmas Eve and saw the last of their capital wiped out as the S&amp;P 500 SPX tallied a record closing high.Some members of Chau&#39;s group lost hundreds of thousands of dollars - most of their life savings - according to account statements reviewed by MarketWatch. One member launched a GoFundMe page soliciting donations to help cover basic living expenses.&#34;On Christmas Eve, I experienced a catastrophic financial loss in the stock market. The loss happened suddenly and completely changed my circumstances overnight,&#34; the page read. The page was created to benefit a Texas man named Wardell &#34;Audie&#34; Wright. When contacted by MarketWatch, Wright confirmed that he had created the page and that he was part of Chau&#39;s trading group.In interviews on podcasts, Chau said he had calculated the chances of a total loss to be vanishingly small, and that the strategy could still be profitable even if only a small number of trades actually panned out. In digital advertisements circulating on social-media platforms like Instagram and <a href=\"https://laohu8.com/S/META\">Facebook</a>, Chau and his team had characterized the strategy as a reliable way for investors to generate income with just five minutes of trading a day.The group&#39;s misfortune elicited a flurry of commentary and speculation on social-media platforms like X. If nothing else, it has helped to highlight the risks that investors can face in the rapidly growing U.S. options market.The U.S. options industry is on track for a sixth straight year of record activity in 2026, according to data from the Options Clearing Corporation, or OCC. Since the start of the COVID-19 pandemic, retail investors have increasingly become involved in trading derivatives such as options. Derivatives are sophisticated financial products initially developed to help professional investors and businesspeople manage financial risks.Contracts nearing expiration, including risky &#34;zero days until expiry&#34; options - known as &#34;0DTEs&#34; - have proved particularly popular with the retail crowd, industry experts told MarketWatch. While overall options trading volume has grown rapidly over the past few years, volume in short-dated contracts has climbed even more quickly.<h2 id=\"id_3126270719\">The Iron Condor</h2>After grabbing the attention of the options market by placing big trades using contracts on the cusp of expiration on an almost daily basis, the 32-year-old Chau in April confirmed to the Wall Street Journal that he was the trader behind the strategy.Chau and his tight-knit group of traders became known for a signature strategy that, experts said, made their positions stand out in the market.Prior to this public revelation, options industry veteran Brent Kochuba, founder of trading analytics firm SpotGamma, had speculated about the existence of a trader nicknamed &#34;Captain Condor&#34; for more than a year.The strategy from which Chau&#39;s &#34;Captain Condor&#34; nickname was derived involved an options play known as an &#34;Iron Condor.&#34;Chau and his group applied the strategy in a way that would pay off if the S&amp;P 500 index SPX remained within a predetermined range at the time the options expired.When trading Iron Condors, an investor uses multiple contracts to clearly define the potential gain, and the potential loss, from the trade. But according to Kochuba and others, Chau&#39;s application of the Martingale betting system supercharged the risk. It ultimately proved to be the group&#39;s undoing, Kochuba said.By Kochuba&#39;s count, the group suffered a loss of more than $30 million on Christmas Eve after selling more than 90,000 Iron Condor spreads. Each spread involved four separate options contracts. Kochuba estimated the group&#39;s total losses for the week at more than $50 million.In a post on X published on Christmas Day, Chau said this was the first time his strategy had failed since he started trading it in May 2022.&#34;In a nutshell, yes we are hurt but I don&#39;t f-ing give up. We will regroup and try again,&#34; Chau said in the post.&#34;David has acknowledged the recent event publicly and is currently rebuilding his models. He is not providing further comment at this time,&#34; a representative for Chau said when reached for comment by MarketWatch.Chau said during a recent podcast appearance that his group had grown to include more than 1,000 traders. Newcomers agreed to pay an annual membership fee of $5,500 for access to Chau&#39;s trade alerts, which were distributed via a group Slack channel, according to a membership contract and screenshots of the channel reviewed by MarketWatch.One trader who had been a member of the group for about a year told MarketWatch that the strategy had been reliably profitable prior to the wipeout, although he also acknowledged that the group had narrowly avoided a few blowups. One clause in the contract also stipulated that members stay quiet about details of the group&#39;s trades.Options market veterans who spoke with MarketWatch said they were surprised the trading style remained profitable for as long as it did.&#34;It works incredibly well until all of a sudden you lose everything. And that&#39;s exactly what happened,&#34; SpotGamma&#39;s Kochuba said in an interview with MarketWatch.Some members of Chau&#39;s group were novice investors who discovered it through advertisements on social-media platforms like Instagram and Facebook, two people familiar with the business told MarketWatch.<h2 id=\"id_1855428026\">&#39;Their first real terminal event&#39;</h2>At times, Chau&#39;s positions were so large that the hedging required to manage them could move the market in his favor, said Daniel Roos, a longtime options market professional and founder of VolSignals, a company specializing in options analytics.But the predictability of Chau&#39;s strategy, as well as a perfect storm created by a sharp drop in implied volatility during one of the least active periods of the year for stock trading, helped accelerate its undoing. Gauges of implied volatility like the Cboe Volatility Index VIX measure how volatile investors expect the S&amp;P 500 will be over the coming month, using information gleaned from the options market. The index fell to its lowest level in more than a year last week.&#34;This is their first real terminal event,&#34; said Roos, who has been monitoring trades put on by Chau&#39;s group for more than a year. &#34;This is the first time, even by his own words, that it has been a quote, unquote, blowout.&#34;Chau started employing his trading strategy around the time that Cboe Global Markets Inc. <a href=\"https://laohu8.com/S/CBOE\">$(CBOE)$</a>, one of the biggest operators of U.S. options exchanges, expanded its offerings of weekly contracts tied to the S&amp;P 500, allowing investors to trade 0DTEs linked to the index every day of the week. Previously, weekly S&amp;P 500 options only expired on Mondays, Wednesdays and Fridays. Investors can also trade 0DTEs tied to other popular indexes and index-tracking exchange-traded funds.In an appearance on the &#34;Chris Voss Show&#34; podcast earlier this year, Chau said that his group&#39;s trades were at times even larger than the positions put on by the &#34;JPMorgan options whale&#34; - a fund run by J.P. Morgan Asset Management that sells options to generate income for its investors.Like the JPMorgan trades, Chau&#39;s trades carried &#34;fingerprints&#34; that made them detectable by traders with access to the right data and analytical tools, Kochuba said.Dmitriy Muravyev, an associate professor of finance at the University of Illinois Urbana-Champaign, has studied retail investors&#39; options trading activities and found that, on average, they lose money.Yet the broader U.S. options industry has boomed since the advent of commission-free trading offered by platforms like <a href=\"https://laohu8.com/S/HOOD\">Robinhood</a> Markets Inc. (HOOD) and its competitors. Many retail investors developed a taste for trading options during the pandemic, when millions of Americans were stuck at home with little to do.Data from the OCC showed that nearly 14 billion contracts tied to stocks, ETFs or equity indexes like the S&amp;P 500 had changed hands in 2025 as of the end of November, surpassing last year&#39;s total.For Chau and members of his investing club, the ability to more easily trade these complex options strategies offered the promise of outsize returns. However, the margin for error is, at times, razor thin.</body></html>","collect":0,"html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>\"I Experienced A Catastrophic Financial Loss\": How Options Trader 'Captain Condor' Led His Followers To A $50 Million Wipeout</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\n\"I Experienced A Catastrophic Financial Loss\": How Options Trader 'Captain Condor' Led His Followers To A $50 Million Wipeout\n</h2>\n\n<h4 class=\"meta\">\n\n\n<div class=\"head\" \">\n\n\n<div class=\"h-thumb\" style=\"background-image:url(https://static.tigerbbs.com/150f88aa4d182df19190059f4a365e99);background-size:cover;\"></div>\n\n<div class=\"h-content\">\nDow Jones \n2026-01-01 07:47\n</div>\n\n</div>\n\n\n</h4>\n\n</header>\n<article>\n<html><head></head><body>The options trader known as &#34;Captain Condor&#34; and his acolytes experienced a wipeout last week that incinerated tens of millions of dollars and cost some investors their life savings.A strategy that had reliably produced winnings for the trader - whose real name is David Chau - and his group of roughly 1,000 investors went awry just before Christmas, saddling them with what was, by one count, a $50 million loss.The fatal flaw - what finally caused Chau and his crew to lose most or all of their trading capital - was his use of the Martingale betting system. In the Martingale system, the bettor doubles down after each loss, hoping to recoup their money and then some.After a streak of mounting losses, Chau and his followers risked it all on Christmas Eve and saw the last of their capital wiped out as the S&amp;P 500 SPX tallied a record closing high.Some members of Chau&#39;s group lost hundreds of thousands of dollars - most of their life savings - according to account statements reviewed by MarketWatch. One member launched a GoFundMe page soliciting donations to help cover basic living expenses.&#34;On Christmas Eve, I experienced a catastrophic financial loss in the stock market. The loss happened suddenly and completely changed my circumstances overnight,&#34; the page read. The page was created to benefit a Texas man named Wardell &#34;Audie&#34; Wright. When contacted by MarketWatch, Wright confirmed that he had created the page and that he was part of Chau&#39;s trading group.In interviews on podcasts, Chau said he had calculated the chances of a total loss to be vanishingly small, and that the strategy could still be profitable even if only a small number of trades actually panned out. In digital advertisements circulating on social-media platforms like Instagram and <a href=\"https://laohu8.com/S/META\">Facebook</a>, Chau and his team had characterized the strategy as a reliable way for investors to generate income with just five minutes of trading a day.The group&#39;s misfortune elicited a flurry of commentary and speculation on social-media platforms like X. If nothing else, it has helped to highlight the risks that investors can face in the rapidly growing U.S. options market.The U.S. options industry is on track for a sixth straight year of record activity in 2026, according to data from the Options Clearing Corporation, or OCC. Since the start of the COVID-19 pandemic, retail investors have increasingly become involved in trading derivatives such as options. Derivatives are sophisticated financial products initially developed to help professional investors and businesspeople manage financial risks.Contracts nearing expiration, including risky &#34;zero days until expiry&#34; options - known as &#34;0DTEs&#34; - have proved particularly popular with the retail crowd, industry experts told MarketWatch. While overall options trading volume has grown rapidly over the past few years, volume in short-dated contracts has climbed even more quickly.<h2 id=\"id_3126270719\">The Iron Condor</h2>After grabbing the attention of the options market by placing big trades using contracts on the cusp of expiration on an almost daily basis, the 32-year-old Chau in April confirmed to the Wall Street Journal that he was the trader behind the strategy.Chau and his tight-knit group of traders became known for a signature strategy that, experts said, made their positions stand out in the market.Prior to this public revelation, options industry veteran Brent Kochuba, founder of trading analytics firm SpotGamma, had speculated about the existence of a trader nicknamed &#34;Captain Condor&#34; for more than a year.The strategy from which Chau&#39;s &#34;Captain Condor&#34; nickname was derived involved an options play known as an &#34;Iron Condor.&#34;Chau and his group applied the strategy in a way that would pay off if the S&amp;P 500 index SPX remained within a predetermined range at the time the options expired.When trading Iron Condors, an investor uses multiple contracts to clearly define the potential gain, and the potential loss, from the trade. But according to Kochuba and others, Chau&#39;s application of the Martingale betting system supercharged the risk. It ultimately proved to be the group&#39;s undoing, Kochuba said.By Kochuba&#39;s count, the group suffered a loss of more than $30 million on Christmas Eve after selling more than 90,000 Iron Condor spreads. Each spread involved four separate options contracts. Kochuba estimated the group&#39;s total losses for the week at more than $50 million.In a post on X published on Christmas Day, Chau said this was the first time his strategy had failed since he started trading it in May 2022.&#34;In a nutshell, yes we are hurt but I don&#39;t f-ing give up. We will regroup and try again,&#34; Chau said in the post.&#34;David has acknowledged the recent event publicly and is currently rebuilding his models. He is not providing further comment at this time,&#34; a representative for Chau said when reached for comment by MarketWatch.Chau said during a recent podcast appearance that his group had grown to include more than 1,000 traders. Newcomers agreed to pay an annual membership fee of $5,500 for access to Chau&#39;s trade alerts, which were distributed via a group Slack channel, according to a membership contract and screenshots of the channel reviewed by MarketWatch.One trader who had been a member of the group for about a year told MarketWatch that the strategy had been reliably profitable prior to the wipeout, although he also acknowledged that the group had narrowly avoided a few blowups. One clause in the contract also stipulated that members stay quiet about details of the group&#39;s trades.Options market veterans who spoke with MarketWatch said they were surprised the trading style remained profitable for as long as it did.&#34;It works incredibly well until all of a sudden you lose everything. And that&#39;s exactly what happened,&#34; SpotGamma&#39;s Kochuba said in an interview with MarketWatch.Some members of Chau&#39;s group were novice investors who discovered it through advertisements on social-media platforms like Instagram and Facebook, two people familiar with the business told MarketWatch.<h2 id=\"id_1855428026\">&#39;Their first real terminal event&#39;</h2>At times, Chau&#39;s positions were so large that the hedging required to manage them could move the market in his favor, said Daniel Roos, a longtime options market professional and founder of VolSignals, a company specializing in options analytics.But the predictability of Chau&#39;s strategy, as well as a perfect storm created by a sharp drop in implied volatility during one of the least active periods of the year for stock trading, helped accelerate its undoing. Gauges of implied volatility like the Cboe Volatility Index VIX measure how volatile investors expect the S&amp;P 500 will be over the coming month, using information gleaned from the options market. The index fell to its lowest level in more than a year last week.&#34;This is their first real terminal event,&#34; said Roos, who has been monitoring trades put on by Chau&#39;s group for more than a year. &#34;This is the first time, even by his own words, that it has been a quote, unquote, blowout.&#34;Chau started employing his trading strategy around the time that Cboe Global Markets Inc. <a href=\"https://laohu8.com/S/CBOE\">$(CBOE)$</a>, one of the biggest operators of U.S. options exchanges, expanded its offerings of weekly contracts tied to the S&amp;P 500, allowing investors to trade 0DTEs linked to the index every day of the week. Previously, weekly S&amp;P 500 options only expired on Mondays, Wednesdays and Fridays. Investors can also trade 0DTEs tied to other popular indexes and index-tracking exchange-traded funds.In an appearance on the &#34;Chris Voss Show&#34; podcast earlier this year, Chau said that his group&#39;s trades were at times even larger than the positions put on by the &#34;JPMorgan options whale&#34; - a fund run by J.P. Morgan Asset Management that sells options to generate income for its investors.Like the JPMorgan trades, Chau&#39;s trades carried &#34;fingerprints&#34; that made them detectable by traders with access to the right data and analytical tools, Kochuba said.Dmitriy Muravyev, an associate professor of finance at the University of Illinois Urbana-Champaign, has studied retail investors&#39; options trading activities and found that, on average, they lose money.Yet the broader U.S. options industry has boomed since the advent of commission-free trading offered by platforms like <a href=\"https://laohu8.com/S/HOOD\">Robinhood</a> Markets Inc. (HOOD) and its competitors. Many retail investors developed a taste for trading options during the pandemic, when millions of Americans were stuck at home with little to do.Data from the OCC showed that nearly 14 billion contracts tied to stocks, ETFs or equity indexes like the S&amp;P 500 had changed hands in 2025 as of the end of November, surpassing last year&#39;s total.For Chau and members of his investing club, the ability to more easily trade these complex options strategies offered the promise of outsize returns. However, the margin for error is, at times, razor thin.</body></html>\n\n</article>\n</div>\n</body>\n</html>\n","type":0,"thumbnail":"","relate_stocks":{"LU1861558580.USD":"日兴方舟颠覆性创新基金B","LU1861559042.SGD":"日兴方舟颠覆性创新基金B SGD","BK4127":"投资银行业与经纪业","CBOE":"芝加哥期权交易所",".SPX":"S&P 500 Index","BK4588":"碎股","BK4547":"WSB热门概念","BK4585":"ETF&股票定投概念","BK4539":"次新股","BK4112":"金融交易所和数据","BK4532":"文艺复兴科技持仓"},"source_url":"https://dowjonesnews.com/newdjn/logon.aspx?AL=N","is_english":true,"share_image_url":"https://static.laohu8.com/e9f99090a1c2ed51c021029395664489","article_id":"2595109770","content_text":"The options trader known as \"Captain Condor\" and his acolytes experienced a wipeout last week that incinerated tens of millions of dollars and cost some investors their life savings.A strategy that had reliably produced winnings for the trader - whose real name is David Chau - and his group of roughly 1,000 investors went awry just before Christmas, saddling them with what was, by one count, a $50 million loss.The fatal flaw - what finally caused Chau and his crew to lose most or all of their trading capital - was his use of the Martingale betting system. In the Martingale system, the bettor doubles down after each loss, hoping to recoup their money and then some.After a streak of mounting losses, Chau and his followers risked it all on Christmas Eve and saw the last of their capital wiped out as the S&P 500 SPX tallied a record closing high.Some members of Chau's group lost hundreds of thousands of dollars - most of their life savings - according to account statements reviewed by MarketWatch. One member launched a GoFundMe page soliciting donations to help cover basic living expenses.\"On Christmas Eve, I experienced a catastrophic financial loss in the stock market. The loss happened suddenly and completely changed my circumstances overnight,\" the page read. The page was created to benefit a Texas man named Wardell \"Audie\" Wright. When contacted by MarketWatch, Wright confirmed that he had created the page and that he was part of Chau's trading group.In interviews on podcasts, Chau said he had calculated the chances of a total loss to be vanishingly small, and that the strategy could still be profitable even if only a small number of trades actually panned out. In digital advertisements circulating on social-media platforms like Instagram and Facebook, Chau and his team had characterized the strategy as a reliable way for investors to generate income with just five minutes of trading a day.The group's misfortune elicited a flurry of commentary and speculation on social-media platforms like X. If nothing else, it has helped to highlight the risks that investors can face in the rapidly growing U.S. options market.The U.S. options industry is on track for a sixth straight year of record activity in 2026, according to data from the Options Clearing Corporation, or OCC. Since the start of the COVID-19 pandemic, retail investors have increasingly become involved in trading derivatives such as options. Derivatives are sophisticated financial products initially developed to help professional investors and businesspeople manage financial risks.Contracts nearing expiration, including risky \"zero days until expiry\" options - known as \"0DTEs\" - have proved particularly popular with the retail crowd, industry experts told MarketWatch. While overall options trading volume has grown rapidly over the past few years, volume in short-dated contracts has climbed even more quickly.The Iron CondorAfter grabbing the attention of the options market by placing big trades using contracts on the cusp of expiration on an almost daily basis, the 32-year-old Chau in April confirmed to the Wall Street Journal that he was the trader behind the strategy.Chau and his tight-knit group of traders became known for a signature strategy that, experts said, made their positions stand out in the market.Prior to this public revelation, options industry veteran Brent Kochuba, founder of trading analytics firm SpotGamma, had speculated about the existence of a trader nicknamed \"Captain Condor\" for more than a year.The strategy from which Chau's \"Captain Condor\" nickname was derived involved an options play known as an \"Iron Condor.\"Chau and his group applied the strategy in a way that would pay off if the S&P 500 index SPX remained within a predetermined range at the time the options expired.When trading Iron Condors, an investor uses multiple contracts to clearly define the potential gain, and the potential loss, from the trade. But according to Kochuba and others, Chau's application of the Martingale betting system supercharged the risk. It ultimately proved to be the group's undoing, Kochuba said.By Kochuba's count, the group suffered a loss of more than $30 million on Christmas Eve after selling more than 90,000 Iron Condor spreads. Each spread involved four separate options contracts. Kochuba estimated the group's total losses for the week at more than $50 million.In a post on X published on Christmas Day, Chau said this was the first time his strategy had failed since he started trading it in May 2022.\"In a nutshell, yes we are hurt but I don't f-ing give up. We will regroup and try again,\" Chau said in the post.\"David has acknowledged the recent event publicly and is currently rebuilding his models. He is not providing further comment at this time,\" a representative for Chau said when reached for comment by MarketWatch.Chau said during a recent podcast appearance that his group had grown to include more than 1,000 traders. Newcomers agreed to pay an annual membership fee of $5,500 for access to Chau's trade alerts, which were distributed via a group Slack channel, according to a membership contract and screenshots of the channel reviewed by MarketWatch.One trader who had been a member of the group for about a year told MarketWatch that the strategy had been reliably profitable prior to the wipeout, although he also acknowledged that the group had narrowly avoided a few blowups. One clause in the contract also stipulated that members stay quiet about details of the group's trades.Options market veterans who spoke with MarketWatch said they were surprised the trading style remained profitable for as long as it did.\"It works incredibly well until all of a sudden you lose everything. And that's exactly what happened,\" SpotGamma's Kochuba said in an interview with MarketWatch.Some members of Chau's group were novice investors who discovered it through advertisements on social-media platforms like Instagram and Facebook, two people familiar with the business told MarketWatch.'Their first real terminal event'At times, Chau's positions were so large that the hedging required to manage them could move the market in his favor, said Daniel Roos, a longtime options market professional and founder of VolSignals, a company specializing in options analytics.But the predictability of Chau's strategy, as well as a perfect storm created by a sharp drop in implied volatility during one of the least active periods of the year for stock trading, helped accelerate its undoing. Gauges of implied volatility like the Cboe Volatility Index VIX measure how volatile investors expect the S&P 500 will be over the coming month, using information gleaned from the options market. The index fell to its lowest level in more than a year last week.\"This is their first real terminal event,\" said Roos, who has been monitoring trades put on by Chau's group for more than a year. \"This is the first time, even by his own words, that it has been a quote, unquote, blowout.\"Chau started employing his trading strategy around the time that Cboe Global Markets Inc. $(CBOE)$, one of the biggest operators of U.S. options exchanges, expanded its offerings of weekly contracts tied to the S&P 500, allowing investors to trade 0DTEs linked to the index every day of the week. Previously, weekly S&P 500 options only expired on Mondays, Wednesdays and Fridays. Investors can also trade 0DTEs tied to other popular indexes and index-tracking exchange-traded funds.In an appearance on the \"Chris Voss Show\" podcast earlier this year, Chau said that his group's trades were at times even larger than the positions put on by the \"JPMorgan options whale\" - a fund run by J.P. Morgan Asset Management that sells options to generate income for its investors.Like the JPMorgan trades, Chau's trades carried \"fingerprints\" that made them detectable by traders with access to the right data and analytical tools, Kochuba said.Dmitriy Muravyev, an associate professor of finance at the University of Illinois Urbana-Champaign, has studied retail investors' options trading activities and found that, on average, they lose money.Yet the broader U.S. options industry has boomed since the advent of commission-free trading offered by platforms like Robinhood Markets Inc. (HOOD) and its competitors. Many retail investors developed a taste for trading options during the pandemic, when millions of Americans were stuck at home with little to do.Data from the OCC showed that nearly 14 billion contracts tied to stocks, ETFs or equity indexes like the S&P 500 had changed hands in 2025 as of the end of November, surpassing last year's total.For Chau and members of his investing club, the ability to more easily trade these complex options strategies offered the promise of outsize returns. However, the margin for error is, at times, razor thin.","news_type":1,"symbols_score_info":{"CBOE":1.64,".SPX":1.67}},"isVote":1,"tweetType":1,"viewCount":15,"commentLimit":10,"likeStatus":false,"favoriteStatus":false,"reportStatus":false,"symbols":[],"verified":2,"subType":0,"readableState":1,"langContent":"EN","currentLanguage":"EN","warmUpFlag":false,"orderFlag":false,"shareable":true,"causeOfNotShareable":"","featuresForAnalytics":[],"commentAndTweetFlag":false,"andRepostAutoSelectedFlag":false,"upFlag":false,"length":41,"optionInvolvedFlag":false,"xxTargetLangEnum":"ORIG"},"commentList":[],"hasMoreComment":false,"orderType":2}