Christopher Angus Claims to Hedge Risk, Instead Introduces Life Volatility via Criminal Fraud

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Video Background

Convicted fraudster and self-confessed criminal Christopher Angus is kicking off a confidence series, providing free video tutorials on how to defraud investors. This first video is 13:55 & was shared on Monday, March 14, 2016. The criminal who shot these videos delivered over a 99% investment loss, as he simply stole the money and integrated it into other investment scams abroad.
https://www.dailymail.com/news/article-8047311/Businessman-told-friend-hed-quadrupled-2-3m-investment-fortune-actually-blew-1-18.html
UK Crown Police never followed the money trail.

Christopher Angus is associated with Stella Huh and Timothy Barton, who stand trial in the United States on November 2, 2026.
http://www.seobook.com/stella-huh/criminal-case-docket-sheet%204-22-2026-(22-cr-00352).pdf

Video Highlights

• highlights how positions are hedged & runs tight money management. hedges are a cost that act like insurance.
• at 11:30 he talks about how he would dread the day of reporting a loss because it would be totally unnecessary because it would be caused by mental error.

A copy of this video is also available at
https://www.dropbox.com/s/p7s2sfe9np06luy/video%200%202016%20mar%2014.mp4?dl=0

Video Transcript

00:00 Christopher Angus: Okay, so just a quick video on why I'm just holding my nerve, so to speak, and not wanting to initiate a trade. This chart shows two things, the blue line is the S&P it's actually the SPY, but that's a mirror image of the S&P, the correlation is one, so it's identical, and then the pink line is volatility. As you can see, there is basically a 100% inverse correlation of one, inverse correlation. As the S&P drops, volatility goes up, and as the S&P goes up, volatility drops. So based on previous history, you can see here this is from 1998, the volatility is very close to the bottom. It's only really been down around, let's say, 11.85 when the markets were super, super high; sort of breaking record highs. Let me just put that there. So you can see when the markets were breaking record highs at every point that's when volatility was at its very bottom.

01:15 Christopher Angus: Now, the S&P's very far from actually breaking a new record high, over 100 points. So, volatility is basically at the bottom; you can see that dotty line there. I can't... If I move that up just a wee bit. It's way, way below its historic average. So, that means we're gonna take a very formulaic strategy of, buy low and sell high. There's only one thing we can do, and this is part of the strategy, and that is... Let me expand this out. It doesn't work that well there. We can't short the VIX now or sell it and then buy it back when it's lower because it's near the bottom. So there's basically nothing, no downside potential; there's no downside opportunity. So when you're obviously trading anything, you can only buy or sell, and if you short, you're obviously making when it goes down, when you buy, you're making when it goes up, obviously, as you know.

02:21 Christopher Angus: Now, since there's hardly any way to go down, because we're so close to the bottom, there's basically very, very limited opportunity. And there's obviously a much larger risk that if the VIX spikes and we are short, that could be kind of bad, so we'd have to run a hedge and hedges run a cost, and it just would be really, really stupid to short the VIX now. So that leaves us with one option and that's to buy. And because we're very close to the bottom, I'm waiting for a bottom to come in. I've got my orders ready and I'm waiting patiently and I'm very reactive, as I've said before, I'm not proactive because I don't know. I used to have a huge sign above my desk that I printed out in big letters that said, "You don't know." And it was just a reminder to me to say that anything can happen, basically.

03:14 Christopher Angus: So, what I'm hoping for and expecting to see is that the VIX will come to bottom around 16 or at, very close to 17 now, and we're actually got close. What was the bottom here today on the VIX? It doesn't say. I might have to get rid of that chart, I think. But the bottom of the VIX today was around 16 and a half, I think. So, we're waiting for something in the region of 16, maybe a little higher, maybe a lower before we go, before we start to go along. Now, this is a very good opportunity because it doesn't happen that often. It was a bit funky in November, but you can see that about once a month or so it kind of tries to bottom out and then you buy it and you sell it much higher. So that didn't actually happen in the last couple of months either, which makes it an even nicer opportunity, because when it gets down here, we buy it and we buy it hard. In the last month, you can see what we're actually doing is shorting the VIX and we're running upside hedges.

04:28 Christopher Angus: Thankfully we didn't have the hedge any other time, but if you do short the VIX and it rockets up 2-3 points, and you hit a hedge, the hedge has a cost then you're gotta unwind that hedge and you never make a full amount of profit. So the reason I'm pretty excited about this but also I'd like to see it happen, is that we don't need to run a hedge now. We're so close to the bottom no matter what happens, we'll be fine. And so if we've gotta wait a couple of days, it'll be fine. And also, we'll be able to really take a larger position, not like this where you've gotta run very, very tight money management, because the VIX has unlimited upside potential. So if you short the VIX, and it hits a hedge and you gotta unwind the hedge then you gotta re-hedge, it can get very, very complicated and costly, and it requires a lot of discipline and patience. And obviously, like I said, when you hedge things, hedge is an insurance, it carries a cost, and so you just start chopping away at the profits in a trade.

05:33 Christopher Angus: So I can't really articulate my happiness, that we're actually down here and we'll have a straightforward trade. Now its been a slow couple of days, I know, but that's because I have had no choice. The market's grinding up, the VIX grinds down, that's the way it is, and there's no more downside potential. Like here, we're making loads and you can see those but we had a few massive days. We're making like 2, 3%, or close to 3%, because the VIX was just a steamship down and we'll sell high and buy low or buy low and sell high. It's the straightforward market mechanics. Once it starts getting into these very kind of funky ranges like this, wasn't an easy time to trade over here, because it becomes a knife edge. Are you high or are you low? The VIX is at like 20, 21, 22; you don't know. So you have to look at other market data which is coming at you to work out what's going on at the market. Like some of the other stuff, like gold and the T-notes, which I pay very, very close attention to, because the T-notes, like volatility, usually give you a leading indication of what's gonna happen.

06:50 Christopher Angus: Of course, we are also on upside hedges all the time, and when we're short in the market if we're going up. But right now, there's no choice, we can only go up. I cannot go short the market and try and catch like, one point. It would be absolutely ridiculous. Why take risk going down when I can wait a little bit and catch a really; there is a opportunity to catch a really, really big move up? So on average, maybe we'll make nothing tomorrow either. You just gotta bear that in mind. But if we catch like a three or four point pop and we will be bigger than all because there's no, hardly anymore, downside to go and basically there's no risk, absolutely zero, zero, zero, zero, zero risk of actually hurting ourselves in any way. We may, if it does keep, if we buy at 16 and it goes to 15, we carry it overnight. It's not gonna be a big deal. However, I wanna wait. I'd rather catch it at 16 than catch it at 17 and watch it go to 15.50. I'd rather be buying it at 16 and then buying it at 15.50 again, and then catching it all the way back up to 20, 'cause it'll be a really spectacular day and week. It'll make the week, if not the month.

08:06 S1: So it just requires a lot of patience. Sometimes it can get frustrating. You don't earn for a couple of days. That's just the way it is, and when it gets low like this, it really becomes a money printing press for a very short amount of time, because you catch it low, there's no downside, it's like someone giving you an insider tip saying, "You know, this stock is going up because some of the rating agencies, on an insider tip has... " And if this was a credible, as the markets are bent like that with hedge funds, if there was an insider tip, as soon as those insider tips, those rating agencies say, "Buy." Or, "Out perform." Or whatever they say, the stocks rocket. They go up like 10-20%, and that's kind of the position we are in now, is that we're just waiting for this to happen and then we're gonna jump on and it's going to be big, it really is. It'll be the best day that we've seen, with no downside. So just be a little more patient because with the Fed announcing something on Wednesday, probably warming the market up for a rate cut in June, that's why the market's kind of doing this kind of choppy, grind, chop grind grind grind grind chop chop chop grind grind chop.

09:32 Christopher Angus: And also, there's two futures contracts, which we trade. The March contract which is expiring on Wednesday. We can't trade that. Now, the downside is not being able to trade that because it expires on Wednesday, we have to wait for that one to go away, and for then for April and May to come in, is that March follows the VIX cash very closely. Like it's almost one to one. It is a little bit more benign. So say, the VIX was at 16.50, the cash would be at 17. Sorry, the cash was at 17, the March contract will be at 16.50, and then say so the cash goes up 4%, the first VIX, the front month, the March VIX month of March, would go up 3%. Now then the April one might go up like 1.5%. So the movements are much more benign and lazy in terms of actual making proper moves. So we're not able to really trade any instruments which are moving with any vigor because we can't trade the March future now. It's two days, basically one day, 'cause we're at the end of play, oh I think we've closed already actually, because we're an hour early, because we'll catch up at the end of the week, but there's one day left to trade with the March contract and we can't, because if we run a small loss, say 2000-3000 loss because we buy it at 17 and it goes to 16 or something.

11:15 Christopher Angus: And at the close of play, halfway through Wednesday, lunchtime Wednesday, that contract rolls over, or it goes away, expires, we would absorb that entire loss. And, we try not to make any losses here. I dread the day when I have to report one, because I think it would be a mistake and I would have made a mistake and be unnecessary. But I would have had some brain fuck up, that would have happened because they're totally unnecessary. So, for those reasons, the market's grinding higher, the VIX is grinding low, I can only buy. So, I'm waiting to buy better. Two; the Fed is making the markets go in higher and choppy and it's up and down, up and down. I think on Friday the S&P was caught in a seven point range. And number three; I can't trade the March contract. I would have to trade the April contract because March is expiring on Wednesday and April hardly moves until March expires then April attaches itself to the VIX's cash more, which makes it a little more correlated. And then the May one comes into play, but it's a lot more benign. I hope I'm articulating myself correctly. But those are the three main reasons, the grind higher and there's no more downside for the VIX, I can only go up. So, I have to buy, but I'm waiting for a good spot.

12:33 Christopher Angus: The Fed, and then that's what everyone's waiting for. That's a painful grind higher. And number three, the VIX contract expiring on a Wednesday. So, those are the three reasons I'm basically stuck until Wednesday. I will trade the April contract, which won't roll over, or expire, if we get a major pop. But the mark, we're done for the day. And there was fuck all at what happened. So, Wednesday's the day. And I have to say, just be patient. And I'm sorry to not make any money today, but it's... I'd rather buy better on Wednesday and have a 10-15% day and week, because these things hardly ever come along. It's to catch it right at the right time, not to be in a position so you can actually put some size on. We're in a very fortunate position at the moment. And I think tomorrow's gonna be... It may be okay, but I'm really banking on Wednesday being a good day. So, I hope that explains where I'm at at the moment, just waiting for a good set up to make, to hopefully end, or start the middle of the week, having a very, very strong middle of the week. That's it for now. I'll catch you on Skype. Cheers. Bye.