In the Media
Monday, January 12th 2026
On Risk Management and Path-Dependent Trades: Lessons from Captain Condor
ORATS cited by Bloomberg on an options market loss
Summary
A recent Bloomberg article discusses a significant options market loss linked to aggressive position sizing and holiday liquidity. It emphasizes that increasing position size after losses alters the risk profile, turning a probabilistic strategy into a path-dependent risk event. This issue is particularly critical during low liquidity periods, highlighting the need for professionals to consider volatility, liquidity, and position sizing when managing strategies.
Earlier this week, Bloomberg published a detailed look at a high-profile options market loss tied to aggressive position sizing and holiday liquidity conditions. In the piece, Bloomberg cited comments from Matt Amberson, founder of Option Research & Technology Services, on the risks inherent in doubling exposure during losing streaks.
The core issue highlighted in the article is not the use of iron condors or short-dated options themselves, but the transformation of a probabilistic strategy into a path-dependent risk event through Martingale-style sizing. Increasing position size after losses fundamentally changes the risk profile, concentrating what appear to be many small edges into a single large tail outcome.
This dynamic becomes especially pronounced during periods of reduced liquidity, such as holiday trading sessions, when market depth is thinner and the cost of adverse moves can rise quickly. These are not theoretical concerns. They are recurring structural features of options markets that professionals must account for when designing and managing strategies.
At ORATS, we focus on understanding how volatility, liquidity, and position sizing interact across regimes, not just how strategies perform under idealized assumptions. We appreciate Bloomberg including our perspective in its reporting, and we remain committed to advancing disciplined, data-driven approaches to risk management.
Disclaimer:
The opinions and ideas presented herein are for informational and educational purposes only and should not be construed to represent trading or investment advice tailored to your investment objectives. You should not rely solely on any content herein and we strongly encourage you to discuss any trades or investments with your broker or investment adviser, prior to execution. None of the information contained herein constitutes a recommendation that any particular security, portfolio, transaction, or investment strategy is suitable for any specific person. Option trading and investing involves risk and is not suitable for all investors.
All opinions are based upon information and systems considered reliable, but we do not warrant the completeness or accuracy, and such information should not be relied upon as such. We are under no obligation to update or correct any information herein. All statements and opinions are subject to change without notice.
Past performance is not indicative of future results. We do not, will not and cannot guarantee any specific outcome or profit. All traders and investors must be aware of the real risk of loss in following any strategy or investment discussed herein.
Owners, employees, directors, shareholders, officers, agents or representatives of ORATS may have interests or positions in securities of any company profiled herein. Specifically, such individuals or entities may buy or sell positions, and may or may not follow the information provided herein. Some or all of the positions may have been acquired prior to the publication of such information, and such positions may increase or decrease at any time. Any opinions expressed and/or information are statements of judgment as of the date of publication only.
Day trading, short term trading, options trading, and futures trading are extremely risky undertakings. They generally are not appropriate for someone with limited capital, little or no trading experience, and/ or a low tolerance for risk. Never execute a trade unless you can afford to and are prepared to lose your entire investment. In addition, certain trades may result in a loss greater than your entire investment. Always perform your own due diligence and, as appropriate, make informed decisions with the help of a licensed financial professional.
Commissions, fees and other costs associated with investing or trading may vary from broker to broker. All investors and traders are advised to speak with their stock broker or investment adviser about these costs. Be aware that certain trades that may be profitable for some may not be profitable for others, after taking into account these costs. In certain markets, investors and traders may not always be able to buy or sell a position at the price discussed, and consequently not be able to take advantage of certain trades discussed herein.
Be sure to read the OCCs Characteristics and Risks of Standardized Options to learn more about options trading.
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