Chicago Options Associates, What’s the story? Options

[Peter Damian]

In 1994 Wales left the university of Alabama and took a job at Chicago Options Associates, as Research Director. He left in 1996. I am still puzzled how he made enough money so as not to work again, having worked there less than two years, in a research capacity (rather than a trader).

What happened to Chicago Options Associates? The CEO was Michael Davis, who in that period was the subject of a lawsuit referenced here

http://www.state.il.us/court/opinions/appe...tml/1041110.htm
http://www.state.il.us/court/opinions/supr.../may/102578.pdf

I haven’t time to follow the details of the case yet, but it seems Davis was successfully sued for a large sum of money (then), nearly $1m, and tried by various means to avoid payment. Does anyone know the full story? I see Greg has followed this one in the past.

[thekohser]

I am still puzzled how he made enough money so as not to work again, having worked there less than two years, in a research capacity (rather than a trader).

The puzzle is solved once you understand that Jimmy made enough money to buy a house and live off of savings for a few years, and no more than that. The "set for life" version you're quoting was a fiction created by the mainstream media, which Jimbo has only tepidly endeavored to correct.

By the way, do you not know that Michael Davis has worked for Wikia, Inc. for a number of years now? Chicago Options Associates (and Bomis along with it) was likely a casualty of Davis' hot-foot run to Florida, where the homestead laws would protect a good portion of his money (and that of his wife's, Emily Seibel) from Brian Dowling's lawsuit.

[Peter Damian]

I am still puzzled how he made enough money so as not to work again, having worked there less than two years, in a research capacity (rather than a trader).

The puzzle is solved once you understand that Jimmy made enough money to buy a house and live off of savings for a few years, and no more than that. The "set for life" version you're quoting was a fiction created by the mainstream media, which Jimbo has only tepidly endeavored to correct.

By the way, do you not know that Michael Davis has worked for Wikia, Inc. for a number of years now? Chicago Options Associates (and Bomis along with it) was likely a casualty of Davis' hot-foot run to Florida, where the homestead laws would protect a good portion of his money (and that of his wife's, Emily Seibel) from Brian Dowling's lawsuit.

Sorry Greg I half expected you would have covered this already, and indeed I found your work after posting. Andrew Lih has something about Wales working there, saying Wales was originally hired on the strength of the option pricing model he worked on (Brooks, Robert; Jon Corson, Jimmy Donal Wales (1994). "The Pricing of Index Options When the Underlying Assets All Follow a Lognormal Diffusion". Advances in Futures and Options Research 7). Note that Wales was not the lead author and seems to have claimed credit for the authorship. And he would not have been paid much for what he was doing at COA.

But the puzzle is far from solved. We don’t know whether, or how, COA folded. How possible, given the money which Dowling had made for them? What actually was the trading agreement? What happened to the money? Davis is now bankrupt.

Dowling would be the person to locate for his take on the days at COA, but he seems to be internet invisible.

[SB_Johnny]

Note that Wales was not the lead author and seems to have claimed credit for the authorship.

Sounds like Jimmy alright. Fudge the resume, take the credit, let the partners crash and burn.