One of the simplest ways to get rich is to convince others that paying you will make them rich. It is a tale as old as time, selling the shovel is more profitable than digging for gold. There is nothing wrong with this tactic as it is a valid way to make a living, however, nowadays it is considerably more sinister when enacted. In this day and age of financial ‘furus’ and people attempting to sell you a service, their considerable and deliberate attempts to mislead due to the potential monetary gains. It does not matter what platform you are on, you will see the attempts to profit off your small knowledge on the subject and your general naïve.
These imposters are only in the communities for one thing, money. There are many different ways in which these scammers can reside. One example that many in the financial Twitter community, commonly referred to as FinTwit, would know is Unusual Whales. The service he sells has many flaws including a delay from other services such as FlowAlgo, being based on volume over open interest, and the most incriminating piece of information, the service calls out plays in both directions, leaving the user left to decide which piece of information to use. Using the last point, you can see how the creator, Unusual Whales, is able to retweet images of gains due to his service for advertisement. If you are posting plays in both directions, you’re going to be right no matter what. This is just the tip of the iceberg on how misleading he can be.
The way in which Unusual Whales calculates the max average percent return is extremely misleading. The first way in which it is misleading is the entry, most people are unable to enter at the exact moment the whale is called out, due to timing on their personal side, but also due to the bot being slower than other services such as FlowAlgo. I have heard stories from multiple people about flows coming even 30 minutes to an hour beforehand. These are people who paid for the unusual whale service, but they had done so on false premises. The second way in which the percentage calculation is misleading is due to the fact in which it is calculated. It is calculated from the max percent return, which at first doesn’t sound like an issue, but it is nearly impossible to be achieved. So the data point is almost useless for anyone, the average percent expected should be much lower. The third way in which the calculation is misleading is using the average. Due to the nature of options only having the potential to lose 100% and having unlimited upside potential, the data points are skewed upwards, which as we discussed above, is also skewed higher than it ought to be. The true way in which the data should be calculated is median, which would still be skewed due to options nature of only having -100% downside, however, that is unlikely due to the profitability in misleading the public with the skewed max average return number.
Want to see how the bot did yesterday/today/last Friday?
Check the leaderboard/reports: https://t.co/ZzLgmWsc6M.
The bot had a max avg return of 8.9%, 135 total alerts, 76 calls, and 59 puts. pic.twitter.com/N9wMeULDVa
— unusual_whales (@unusual_whales) April 26, 2021
It is easily seen that he is advertising a misleading number on his service. He is using the average max return versus the more accurate median return which is 2.778% on that day. That number brings us back up to the fact that nearly no one is able to achieve a maximum return due to those being short term frames that very few contracts are traded at, so if we look at that reasonably, we can estimate that the average person would not be within 2.778% of all the maximum returns due to the time in which they enter and time in which they exit. Using this, we can show how using the Unusual Whales service, and paying for it, is throwing money away. You will be paying to lose money with this service, you may get lucky a few times, but over time, the data does not lie, you will be at a net loss. It is very dishonest for the creator to be advertising an 8.9% average maximum return when this is clearly not the case, it is a misuse of statistics in order to benefit the creator monetarily.
What works even better for these scammers is acquiring some loyal followers, more commonly referred to as simps or stans. It is not hard to either due to the manipulation techniques and lying used by these people. Back to Unusual Whales, he has a few people who try to decipher the whale alerts, the simp’s main goal is likely to be noticed, so they will try to find any hidden meaning possible that will allow them to get attention from the scammer. They will write up articles that do not make any logical sense when juxtaposed with the intent of the whale alerts. They try to make sense of the wildness of the whale alerts playing both ways and pretend to know which whale you should truly follow, spoiler alert, you should not follow any and make your own plays that are not based on someone buying a few hundred thousand dollars worth of calls here or a few million dollars worth of puts here, that is pure gambling. The scammer will recognize these people and send their new, naïve, customers that way for help answering questions, and oftentimes after the simp has enough followers, they start monetizing their content as well. Thus creating a system in which you must pay even more money to lose your money.
This issue is far from limited to just Unusual Whales, the example for him is a crystal clear one, the issue is far more pervasive leading it to be difficult to find an actual genuine person in the Financial communities online, whether it be the Youtuber, the Discord owner, the Tiktoker, or the Twitter user, the misleading and dishonest nature is the most prominent of these people, they are able to make money off new, naïve people looking for a way to get rich quick. This exploitation is saddening and disgusting, the only way to attempt to ease the situation is to create more awareness to non-financially literate people that these scammers prey on. Before long you may as well see your brother lose his life savings following the whale alerts from Unusual Whales or your cousin is asking you for money due to losing his money following a TikToker.
This nasty problem plaguing the online Financial community is one we have to attempt to eliminate. The true motives of a majority of these people are to sell you a product and it is clear. The only thing that these people care about is making money from selling their service.
Disclaimer: all opinions in this article are of Brandon Short’s and not The Simple Herald.