Meet 'Captain Condor': The Options Trader Who Commands Market Moves

His fellow traders affectionately refer to him as " Captain Condor," and together they're causing quite a stir in the options trading arena.

The captain, also referred to as the "Iron Condor Whale," made his debut in the minds of retail investors last year when several people spotted the massive wagers placed on S&P 500 index-related options. This soon led to these influential trades getting monikers and drawing a group of option traders keen on uncovering who the captain really was.

David Chau claims it’s him. The 31-year-old day trader isn't navigating these waters solo; he leads an online trading group comprising over 1,000 participants. Whenever he discloses his stock-index option strategies to his audience, numerous members boost his efforts by placing additional stakes of their own. Occasionally, the collective size of their investments—focusing on the S&P 500 index's fluctuations—has had a significant impact on the equity markets. Certain transactions they've executed have surpassed 30,000 contracts.

When it exceeds 10,000, it begins to be quite significant," stated Cem Karsan, who founded Kai Volatility Advisors based in Chicago. "Should it reach 20,000, it would become the most talked-about event around.

Famous trading personalities have captivated U.S. investors for over a hundred years, starting with Jesse Livermore, dubbed the "Boy Plunger," all the way up to Keith Gill, nicknamed the "Roaring Kitty." meme-stock craze Their flamboyant demeanor, enormous earnings, and even ruinous setbacks are frequently romanticized into stories of motivation or warning.

The market’s wild swings Recently, these developments have caused anguish among savers and worry among money managers. However, they've only increased enthusiasm for trades that defy conventional Wall Street thinking. As stocks become volatile due to President Trump’s tariffs, traders are diving into bold options strategies. Some bets are paying off tremendously. .

We possess an unhealthy interest," stated Avanidhar Subrahmanyam, a professor with expertise in behavioral finance at UCLA’s Anderson School of Management. "When someone takes a dangerous gamble, we can’t help but wonder how things will turn out. It's simply human curiosity.

Chau, who works as a full-time trader from his residence in Nevada, describes himself as an introvert. "I prefer staying at home and keeping to myself," he mentioned during an interview. Nevertheless, there are instances where he seems more aligned with his alternate persona.

“The market is a battlefield, right? You have to be like a soldier on the front line, and you need to have mental fortitude,” Chau said.

Captain Condor’s time in the spotlight has coincided with the stunning growth of the options market. Options trading among individuals has surged since late 2020, when pandemic lockdowns and government stimulus programs triggered a market rally and rekindled Americans’ interest in day-trading.

In 2024, approximately 49 million option contracts were traded daily, more than doubling from the 19 million contracts recorded in 2019, as reported by the Options Clearing Corp. (OCC). Trading volumes have consistently broken previous records annually since then. Moreover, with the overall expansion of the market, retail investors now account for a larger share; they represented 29% of total options trading volume towards the end of last year, compared to just 23% at the start of 2020, based on data provided by Bloomberg Intelligence.

The significant expansion of the market has rejuvenated the retail-brokerage sector and apparently created a demand for its very own icons. Captain Condor and company have risen to fill this void.

Actually, Chau's identity is widely known—an open secret among those who annually subscribe to the options training program provided by his firm, InsideOptions. Over 1,000 individuals have enrolled in this Slack community, wherein Chau shares information about his most recent trading activities. To be eligible for membership, potential participants must confirm that they possess a minimum of $26,000 available for trading purposes. Participants in this initiative span various backgrounds including ex-Wall Street traders with extensive careers as well as medical professionals and engineering experts exploring the world of options trading.

The iron condor strategy, which he mastered, involves purchasing and writing call options at strike prices higher than the current price of the underlying asset, along with putting options at strike prices lower than this price point. This approach profits based on whether the market predicts that the S&P 500 will remain inside or venture beyond a specific range. When plotted on a graph, the trade positions form wing-like projections reminiscent of an iron condor’s extended wingspan.

Phone calls provide the option to purchase a stock at a predetermined price, known as the strike price, within a specified period. Meanwhile, puts grant the ability to sell the stock during this timeframe.

Chau mentions that he utilizes both his personal funds and capital from the SPX Program Fund LP, the hedge fund he established in 2023, for trading purposes. According to him, this fund counts over 30 investors, several of whom participate in InsideOptions’ program as well. When asked about the total asset value under management at the fund, he chose not to disclose specific numbers but indicated that it exceeds $1 million.

Everyone doesn't agree that the options market requires a leader. Or anyone serving as a hero, for that matter.

“There’s an enormous level of risk involved,” stated Brent Kochuba, who founded SpotGamma, a company focused on derivatives data. “In my opinion, this situation can only conclude poorly.”

If he understands what he’s doing, that's good. However, the scale seems quite extreme. Essentially, doubling down on every trade is just like betting.

Kochuba has been monitoring Chau and his group's transactions for several months and sharing this information on the social media site, X. He is concerned that if these trading activities grow too large and they exhaust their available funds, the approach might unravel catastrophically.

But other traders say it is this derring-do that makes these trades, and Captain Condor himself, so compelling. One example is that when one of Chau’s bets loses money, he places another wager again the next day with roughly double the number of contracts, and the community members follow suit. What they are doing is a gambling tactic known as the Martingale strategy, which aims to give bettors a chance to recover their losses and pocket a profit when their bet eventually pans out.

This indicates that possible losses can accumulate rapidly. Chau contends that the substantial gains achieved through his approach sufficiently compensate for these losses. The aim is not to completely evade losses, but rather to ensure they do not deplete an investor’s complete balance. He advises traders who are unwilling to accept this level of risk to refrain from participating.

However, Chau mentions that he is contemplating shutting down membership for his community.

I constantly feel this sense of looming dread," he stated. "No positive situation endures indefinitely.

Send your message to Krystal Hur at krystal.hur@wsj.com

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