Options wizards Please Help Me Identify Trustee Theft
Background:
My 90 year old grandfather accrued $10m in his lifetime. He loved his options and would get, pardon my vernacular if it is incorrect, margin calls every month because he traded so much that it exceeded his credit based on equity in his account: so he was a heavy options trader. He only sold puts and calls, never did he buy a single option.
He has now passed. A trustee is in charge of his accounts tfamily member). Lawsuits are flying left and right. I strongly suspect theft for a number of reasons. Trustee is required to follow prudent investment standards (opposite of gramps). However, despite several warnings, trustee has simply continued to trade massive amounts of options. Its like grandpa is still here!
Question:
How would a trustee intentionally write "loser" options either on grandpa's'account or their own account, then purchase the options that will obviously lose on the other account.
I have come up with this: trustee sells a put from their private account to grandpa as follows: Put, Google $800 for $2 per contract. This may be very elementary to you, i don't even know if you are allowed to write such a lousy option that nobody would buy unless they wanted to lose their premium.
Ok, i think you get the idea. Maybe you can advise me to more clever means that a trustee may steal via the avenue i have described.
Thank You for your help!
