In November 2018, James Cordier's Tampa-based hedge fund OptionSellers.com lost approximately $150 million of client money in just four trading days. Investors didn't just lose their entire investment — many received margin call bills from the clearing broker INTL FCStone for losses that exceeded their initial capital. This article is the definitive breakdown of what happened, why it happened, and the five specific lessons every options trader needs to learn from this disaster.
I'm David Jaffee. I graduated from an Ivy League university, worked at Wall Street's most successful investment banks, and have spent over a decade teaching 2,500+ students across 70+ countries how to sell options safely and profitably. The OptionSellers.com blowup is the single most important cautionary tale in modern options trading, and it's a near-perfect illustration of everything I teach my students NOT to do.
Key Takeaways
- James Cordier's OptionSellers.com lost ~$150 million in November 2018 by selling naked call options on natural gas futures
- 290 clients lost everything, and many owed additional margin debt to clearing broker INTL FCStone after liquidation
- The blowup was caused by five specific mistakes: excessive leverage, naked options, commodities concentration, no hedging, and long-dated exposure during a volatility expansion
- Cordier recorded a now-infamous 10-minute YouTube apology video calling the natural gas spike a "rogue wave" — which ignores that he chose to surf without a life jacket
- One investor who put in $400,000 saw their account go to -$1,000,000 within a single week (they owed money to the broker)
- This disaster is the real-world proof of my contrarian thesis that long-dated naked options are "widowmakers" during volatility shocks — a principle I'll explain below
- The same type of blowup has destroyed countless retail traders running the popular 45 DTE approach during the 2018 Volmageddon, the March 2020 COVID crash, and the 2022 bear market
What Happened: The 4-Day Timeline That Destroyed OptionSellers
OptionSellers.com billed itself as "The Global Authority on Selling Options." Founded by James Cordier in 1999, the fund managed approximately $150 million for roughly 290 high-net-worth clients from its Tampa, Florida office. Cordier had co-authored The Complete Guide to Option Selling, appeared regularly on CNBC and Bloomberg, and was frequently referred to as the "King of Options."
The irony was almost too much - the author of The Complete Guide to Option Selling had just publicly demonstrated exactly how NOT to sell options.
Cordier's strategy — which he branded "FUDOM" (FUndamentals combined with Deep Out of the Money options) — was to sell far out-of-the-money options on physical commodities like natural gas, crude oil, gold, and grains, collecting premium from contracts that usually expired worthless. It had worked for nearly 20 years. Until it didn't.
The Bet
On November 1, 2018, Cordier published an article on Seeking Alpha titled "Option Selling Opportunities So Good They're Scary" — a headline that now reads like a prophecy. His fund held two enormous positions:
- Short naked calls on natural gas futures (betting prices would fall or stay flat)
- Short naked puts on crude oil futures (betting prices would rise or stay flat)
Both bets were wrong in opposite directions — simultaneously.
The Rogue Wave
Between November 8 and November 13, 2018, natural gas futures spiked roughly 60% in less than a week — the largest short-term move in eight years — driven by colder-than-expected weather forecasts, record-low inventories, and a short squeeze. At the same time, crude oil plunged. Cordier's short calls exploded in value. His short puts got hammered. According to court filings and investor reports, one client who had invested $400,000 watched their account go from positive to negative $1,000,000 in a single week.
On November 13, 2018, clearing broker INTL FCStone liquidated OptionSellers.com's positions at the absolute worst possible prices — a forced margin-call sell-off at the peak of a volatility shock. The fund was effectively gone. Two days later, Cordier recorded the now-infamous 10-minute apology video on YouTube, sitting in a darkened room at a nearly empty desk, calling the event a "rogue wave" that had "capsized the boat." Bloomberg later likened the video to a "hostage video" for its minimal production value.
The Aftermath
According to legal filings and reporting from the Tampa Bay Times, investors lost 100% of their capital and many received additional margin debt demands of roughly one-third of their original investment. Tampa Bay Lightning owner Jeff Vinik was reportedly among Cordier's clients. Over 110 former investors joined legal action against Cordier and INTL FCStone. For complete legal-side context, Levin Law, P.A. has documented the client recovery efforts in their Optionsellers.com investigation.
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The 5 Specific Mistakes That Caused OptionSellers to Blow Up
Every options trader — retail or institutional — should memorize these five mistakes. Violating any one of them can be survivable. Violating all five simultaneously is how you become James Cordier.
Mistake 1: Excessive Leverage (Trading ~10x Too Large)
OptionSellers.com was running positions that were roughly 10 times larger than prudent risk management allows. When you sell option premium, your account can absorb a 1x or 2x losing trade. It cannot absorb a 10x losing trade. This is not complicated math — it's the single rule that prevents blowups. Cordier violated it systematically for years because leverage had always worked in his favor. Until the one day it didn't.
The lesson: Never deploy more than roughly half of your buying power, and ideally less. Crises are when you need more dry powder, not less. If you're maxed out when volatility strikes, your broker will force-liquidate you at the worst possible moment — which is exactly what happened to OptionSellers.
Mistake 2: Selling Naked Options With No Hedging
Cordier sold naked calls, which carry theoretically unlimited risk, and naked puts, which carry risk down to zero. There were no protective long options, no portfolio hedges, no "umbrella" of downside protection. When natural gas spiked 60%, there was nothing to cushion the blow.
This is the single most important principle in options selling: you must proactively hedge your positions to eliminate tail risk. Real option sellers — the ones still in business 10 years later — always own some form of long-dated downside protection, deployed when volatility is low and protection is cheap. I call this "the Umbrella" and it's non-negotiable. OptionSellers had no umbrella. That's why they drowned.
Mistake 3: Trading Commodities (Not Large-Cap Equities)
Commodities are inherently more volatile and less liquid than large-cap equities. Commodities markets are small relative to the major stock indices, and it's not uncommon for a commodity to move 10 days in a row in one direction. Natural gas going up 60% in a week is extreme but not unprecedented — similar moves happened in oil (January 2016, April 2020 negative oil prices) and gold (August 2018).
Equities have two-sided price action — the price of a large-cap stock is supported by earnings, dividends, institutional investment, pension fund flows, index buying, and more. Commodities have none of these support mechanisms. When sentiment shifts, prices can go hyperbolic in either direction.
My rule: I trade options only on large-cap stocks and broad market indices (NVDA, MSFT, AAPL, AVGO, SPX, SPY, QQQ). If I want commodity exposure, I use ETFs like GLD or GDX. I never sell naked options directly on commodity futures. OptionSellers did. That's why they blew up.
Mistake 4: Strikes Too Close to the Market
Cordier chose strike prices that were too close to the current market price in order to collect more premium. This is the classic beginner mistake: getting greedy about premium collection at the cost of probability of profit. A strike 5% away from the market collects maybe 10x the premium of a strike 15% away — but it also has 10x the chance of going against you.
The right approach is to sell strikes at prices where you'd genuinely be happy to own the underlying (for puts) or have the underlying called away (for calls). Cordier wasn't doing this. He was premium-hunting, which is what retail traders do and what blew up his fund.
Mistake 5: The Hidden Killer — Long-Dated Naked Options and Vega Risk
This is the mistake almost nobody talks about, and it's the one that ties OptionSellers.com directly to the modern retail options-selling disaster.
When you sell a long-dated naked option — whether it's 30 days, 45 days, or 90 days to expiration — you're not just collecting premium. You're taking on vega risk: exposure to implied volatility expansion. In a calm bull market, vega risk is invisible. In a volatility shock, a supposedly "safe" 30-delta put can triple or quadruple in value overnight as IV spikes, regardless of where the underlying stock is actually trading.
This is exactly what destroyed OptionSellers.com in November 2018. And it's exactly what destroyed retail traders running the popular "45 DTE / 21 DTE" framework taught by Tastytrade during Volmageddon in February 2018, the March 2020 COVID crash, and the 2022 bear market.
I refuse to hold long-dated naked puts for this exact reason. I call them "widowmakers." The premium you collect for an extra 20–30 days of exposure is nowhere near enough to compensate for the vega risk you're absorbing. James Cordier didn't understand this. Tastytrade still teaches it. Retail traders who follow either model are one volatility shock away from their own OptionSellers moment.
This is the core of my contrarian philosophy, explained in detail in Can You Make a Living Selling Options? — and the OptionSellers.com disaster is literally the real-world proof.
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The Connection to Today's Retail Options Disasters
The OptionSellers blowup wasn't a one-off. It was the most famous example of a disaster pattern that repeats every time volatility spikes:
- February 2018 (Volmageddon): The XIV ETN imploded as VIX doubled in a single session. Retail traders selling 30–45 day puts on SPX and SPY saw "winning" positions go to "account-threatening loss" in hours.
- November 2018 (OptionSellers): The same pattern, just scaled up to $150 million with commodities as the underlying.
- March 2020 (COVID crash): SPX dropped 34% in 23 days. Retail option sellers on the 45 DTE framework saw their long-dated naked puts increase 5x to 10x in value. Many were force-liquidated before they could respond.
- 2022 bear market: A slower bleed, but the cumulative damage to traders rolling 45 DTE puts as the market ground lower was severe.
Every single one of these events had the same root cause: undefended option sellers holding long-dated exposure during a volatility expansion. The only difference between OptionSellers.com and the retail traders who blow up every few years is the dollar amount on the loss.
What You Should Actually Do Instead
Based on everything I teach my 2,500+ students — and based on the verified returns from my own two trading accounts shown in Can You Make a Living Selling Options? (+78% and +63% over 11–12 months) — here's the framework that prevents OptionSellers-style disasters:
- Size smaller than you think you need to. Never deploy more than roughly half your buying power. Crises require dry powder.
- Always hedge. Maintain standing portfolio protection — a long-dated "umbrella" hedge deployed when VIX is low and protection is cheap.
- Trade large-cap equities and broad indices, not commodities. Stick to NVDA, MSFT, AAPL, AVGO, SPX, SPY, QQQ.
- Sell short-dated premium only. Long-dated naked puts carry vega risk that destroys accounts during volatility expansions.
- Close winners quickly. If a short premium trade hits 50–75% of max profit quickly, close it. Don't hold for the last pennies.
For a complete breakdown of the account sizes needed to execute this strategy safely, read How Much Money Do You Need to Sell Options?.
Frequently Asked Questions
How much money did James Cordier lose at OptionSellers.com?
OptionSellers.com lost approximately $150 million of client money in November 2018 after a ~60% spike in natural gas futures triggered a margin call and forced liquidation by clearing broker INTL FCStone. Many of the 290 clients lost 100% of their capital and additionally owed margin debt.
How did James Cordier lose $150 million so quickly?
He sold naked call options on natural gas futures while simultaneously selling naked put options on crude oil futures — without hedging. When natural gas spiked 60% in a few days and crude oil dropped, both positions exploded against him. Because his positions were leveraged roughly 10x larger than prudent risk management allows, a single volatility shock wiped out the entire fund.
What is James Cordier's net worth now?
I estimate James Cordier's net worth to be around $40 million. Despite losing $150 million of client money, Cordier likely has personal assets protected from the fund's collapse. He has since launched Cordier Commodity Report (CCR) in 2021 and publishes research through CordierCommodityReport.com.
Is OptionSellers.com still in business?
No. OptionSellers.com shut down in November 2018 immediately after the liquidation. The website went dark and was eventually reduced to a single contact page. The fund's clients filed lawsuits and arbitration claims against Cordier and INTL FCStone.
Did investors get their money back from OptionSellers?
Most did not recover meaningful amounts. Over 110 of the 290 clients joined legal action. Some partial recoveries were obtained through arbitration claims against INTL FCStone, but many clients both lost their capital and were billed for additional margin debt. Law firms including Levin Law, P.A. continue to investigate recovery options.
Can selling options really make you money?
Yes — when done correctly. Selling option premium is statistically one of the highest-probability strategies in the financial markets, but only when combined with disciplined position sizing, proactive hedging, short-dated exposure, and conservative strike selection. My own verified E*TRADE statements show +78% and +63% returns on two accounts over the past year using this approach. Read Can You Make a Living Selling Options? for the full breakdown.
What's the best way to avoid an OptionSellers-style disaster?
Follow the five rules above: size smaller, always hedge, trade only large-cap equities and indices, sell short-dated premium only, and close winners quickly. Beyond those rules, get proper training. My $400+ free options training walks you through the complete framework I use to trade my own capital.
Where is James Cordier now?
As of 2026, Cordier operates CordierCommodityReport.com, a commodity research service he founded in 2021. He has reportedly been filing DMCA/copyright notices attempting to remove online content about the OptionSellers.com failure, which is itself a warning sign about the current venture.
Disclaimer: Options trading involves significant risk and is not suitable for every investor. The information presented is for educational purposes only and does not constitute financial, investment, or tax advice. Past performance, including trading results shown, is not indicative of future results. You can lose substantially more than your initial investment when trading options, particularly when selling naked options. Always consult a qualified financial advisor and tax professional. David Jaffee and BestStockStrategy are not registered investment advisors. For additional information on options risks, see the SEC’s investor.gov options guide at https://www.investor.gov/introduction-investing/general-resources/news-alerts/alerts-bulletins/investor-bulletins-63 or the Nasdaq’s options guide at http://www.nasdaq.com/investing/options-guide/ or the CBOE Options Trading guide at http://www.cboe.com/learncenter/