Crazyman Posted March 13, 2020 Share Posted March 13, 2020 (edited) 2 hours ago, Jakey Styley said: Nice! SPY here too. I did well with a couple short term (one week ahead) puts because I couldn’t easily afford the more expensive ones a month out. I’m very new to options. Now that I have more money in this I’m going to buy one tomorrow that’s about 4-6 weeks out. Could you tell me what you mean by the IV getting too high and not being able to make significant money? I’m hoping the market has a slight bounce tomorrow from people trying to buy today’s dip followed by a horrible Monday. Nice, glad you did well in a very ugly week! I had a ton of 3/31 puts on SPY that I (foolishly) sold on Monday (bought them right before the close last Friday). Happy, but disappointed I didn't hold on until now. I'm also hoping for a short term bounce so I can get rid of some calls I have left over and get back to hedging. By IV getting too high I mean the implied volatility of almost every option contract on the market is getting very high, which means the price per contract is very high (because the market is dropping like a fly...I can rhyme!). The price of options contracts are based on numerous factors but implied volatility is chief among them. A recent example: there's a trader named 50 Cent (not the rapper) who appears every few months and buys a ton of VIX (the volatility index itself) calls that are way out of the money for...you guessed it...50 cents per contract. They were that cheap because the implied volatility was so low - the market was doing nothing but going up, therefore the contracts were extremely cheap. He recently threw down $7.5 million in those contracts about 3 weeks ago and has likely profited ~$750 million within a month. I should note he's been wrong in the past but it truly only takes 1 time for him to be right to make a huuuuuge profit. He had calls in early Feb 2018 when the VIX spiked then, too. In a future, calmer market I would recommend looking at individual stocks (or SPY for a safer bet) that have very low IV's going into some type of event - typically earnings, but any event that causes that stock to spike is going to make your calls (assuming that's the way you're betting) increase significantly in value. Unfortunately it doesn't look like a bounce is happening tomorrow unless Congress announces some type of significant short term aid package. Futures are showing the Dow/S&P down 700/75 points respectively right now. Edit: within an hour of posting this they're respectively up(!) 625/70ish. That's how volatile of a market it currently is...and it's only the pre-market futures! Edited March 13, 2020 by Crazyman Quote Link to comment Share on other sites More sharing options...
Gibsonfender2323 Posted March 13, 2020 Author Share Posted March 13, 2020 https://www.cnbc.com/2020/03/12/futures-stock-market-coronavirus-concerns.html Stock rally accelerates into close as Trump announces extensive coronavirus testing, Dow up 6% Quote Link to comment Share on other sites More sharing options...
Jakey Styley Posted March 13, 2020 Share Posted March 13, 2020 How temporary do you guys think the bounce will be? Quote Link to comment Share on other sites More sharing options...
Gibsonfender2323 Posted March 13, 2020 Author Share Posted March 13, 2020 1 hour ago, Jakey Styley said: How temporary do you guys think the bounce will be? It’s gonna be like up and down for a while Quote Link to comment Share on other sites More sharing options...
downzy Posted March 14, 2020 Share Posted March 14, 2020 3 hours ago, Jakey Styley said: How temporary do you guys think the bounce will be? Very temporary. One of Obama’s economic advisors envisions the economic fallout being worse than what happened in 2008. There you had some, if not many, people still spending money on various industries. This time around you have entire industries shutting down that provide for a large percentage of citizens. He figures if the worst of the outbreak is over in two months then we might be able to recover by the end of the year. But any longer than that, four months or longer, of extended economic shutdown we’re looking at a significantly smaller economy. As I tell my parents to ask their financial manager: if the markets like they with only a small number of Americans with confirmed cases, where does he think the market will be when tens of millions of Americans have it and hospitals are in triage mode? My guess is we’ll see the DOW hit a bottom of around 15k as a best case scenario. If some of the worst projections of infections come to be the I can see the market under 10k. A lot will also depend on how fast and profound governments act on both the medical and economic front. Germany just pledged $600 billion to support German businesses struggling with the fallout. The US will likely be spending $1-$2 trillion in stimulus if it seriously wants to counteract the shrinking economy. Quote Link to comment Share on other sites More sharing options...
Gibsonfender2323 Posted March 14, 2020 Author Share Posted March 14, 2020 (edited) Stock market will just calm down once they see that all this shit is actually working. Hopefully Edited March 14, 2020 by Gibsonfender2323 Quote Link to comment Share on other sites More sharing options...
downzy Posted March 14, 2020 Share Posted March 14, 2020 36 minutes ago, Ratbrain said: Print that money. Didn’t you hear, toilet paper is the new money. Quote Link to comment Share on other sites More sharing options...
downzy Posted March 14, 2020 Share Posted March 14, 2020 1 hour ago, Gibsonfender2323 said: Stock market will just calm down once they see that all this shit is actually working. Hopefully If you think things are working out, you should read these articles: https://www.nytimes.com/2020/03/13/us/coronavirus-deaths-estimate.html?referringSource=articleShare https://slate.com/news-and-politics/2020/03/coronavirus-america-isnt-prepared.html “Our country has only 2.8 hospital beds per 1,000 people,” he writes. “That’s fewer than in Italy (3.2), China (4.3) and South Korea (12.3), all of which have had struggles. More important, there are only so many intensive care beds and ventilators.” For ICU, beds we’ve got 45,000; for ventilators, 160,000. The demand for ICU beds in America is already high. Building a hospital does not seem so wild anymore. What is remarkable to me, and shouldn’t be, is that we are the lowest number on that list—we have fewer hospital beds per 1,000 people than Italy, China, and South Korea. There’s a reason for that, Carroll explains: “Hospitals don’t survive financially in the United States by keeping beds open and equipment idle.” Hospitals don’t survive financially in the United States by keeping beds open and equipment idle. Even the system that is meant to keep us from dying answers to the gods of economics.” Quote Link to comment Share on other sites More sharing options...
downzy Posted March 14, 2020 Share Posted March 14, 2020 16 minutes ago, Ratbrain said: Fuck man, you're starting to sound like Alex Jones. https://www.infowarsstore.com/preparedness https://www.infowarsstore.com/preparedness/survival-accessories/rz-air-filtration-mask-m2-mesh Great, now the NY AG will send me an order to stop selling fake Coronavirus cures. Quote Link to comment Share on other sites More sharing options...
Dazey Posted March 14, 2020 Share Posted March 14, 2020 5 hours ago, downzy said: If you think things are working out, you should read these articles: https://www.nytimes.com/2020/03/13/us/coronavirus-deaths-estimate.html?referringSource=articleShare https://slate.com/news-and-politics/2020/03/coronavirus-america-isnt-prepared.html “Our country has only 2.8 hospital beds per 1,000 people,” he writes. “That’s fewer than in Italy (3.2), China (4.3) and South Korea (12.3), all of which have had struggles. More important, there are only so many intensive care beds and ventilators.” For ICU, beds we’ve got 45,000; for ventilators, 160,000. The demand for ICU beds in America is already high. Building a hospital does not seem so wild anymore. What is remarkable to me, and shouldn’t be, is that we are the lowest number on that list—we have fewer hospital beds per 1,000 people than Italy, China, and South Korea. There’s a reason for that, Carroll explains: “Hospitals don’t survive financially in the United States by keeping beds open and equipment idle.” Hospitals don’t survive financially in the United States by keeping beds open and equipment idle. Even the system that is meant to keep us from dying answers to the gods of economics.” It might be only 2.8 beds per 1000 people but when you consider that only about 500 of those people can afford to use the bed the ratio improves significantly. 1 Quote Link to comment Share on other sites More sharing options...
downzy Posted March 16, 2020 Share Posted March 16, 2020 Markets are primed to crater today. Economic data out of China shows the impact is way worse than initial predictions. Unemployment up over a full percentage point over the course of one month. Industrial output dropped by nearly 25 percent, the worst in over three decades. This is going to make the financial crash of 2008 look quaint. Quote Link to comment Share on other sites More sharing options...
Gibson87 Posted March 16, 2020 Share Posted March 16, 2020 (edited) I've really never seen anything like this. If New York ends up shutting down schools/bars/restaurants, which seems likely at this point, the market is going to take a sharp nose-dive. Edited March 16, 2020 by Gibson_Guy87 1 Quote Link to comment Share on other sites More sharing options...
downzy Posted March 16, 2020 Share Posted March 16, 2020 1 hour ago, Gibson_Guy87 said: I've really never seen anything like this. If New York ends up shutting down schools/bars/restaurants, which seems likely at this point, the market is going to take a sharp nose-dive. Yep. Which is why I've been telling to leave the market all last week. Friday afternoon was a great time to sell last week. Now everyone is selling. Quote Link to comment Share on other sites More sharing options...
Gibson87 Posted March 17, 2020 Share Posted March 17, 2020 The Dow seems a little bi-polar today Quote Link to comment Share on other sites More sharing options...
downzy Posted March 17, 2020 Share Posted March 17, 2020 41 minutes ago, Gibson_Guy87 said: The Dow seems a little bi-polar today I still have no clue as to who is buying. It’s mindblowing to hear officials claim that we might be in a recession by the end of the year. I get the technical definition is two quarters of contraction, but for all intents and purposes, we’re already there. The circulation of money in the economy has already dropped off a cliff. It’s we’re seeing governments do what they can to shore up credit markets so they don’t freeze and collapse. We have a long way to go before the volatility and bloodbath in the markets stop. 1 Quote Link to comment Share on other sites More sharing options...
Basic_GnR_Fan Posted March 17, 2020 Share Posted March 17, 2020 If Trump doesn't do a substantial UBI he is toast (if he's not already). Quote Link to comment Share on other sites More sharing options...
downzy Posted March 18, 2020 Share Posted March 18, 2020 Please comments at least tangentially related to the topic. Quote Link to comment Share on other sites More sharing options...
downzy Posted March 18, 2020 Share Posted March 18, 2020 The DOW down another 5 percent as word gets circulated that Mnuchin is telling Republicans that if they don’t act to support the economy we could be looking at 20 percent unemployment: https://www.bloomberg.com/news/articles/2020-03-17/mnuchin-warns-virus-could-yield-20-jobless-rate-without-action-k7wheob8 Personally I think we’re heading to at least seven or eight percent unemployment regardless. But if federal government does not act we’re looking at depression levels of unemployment. Quote Link to comment Share on other sites More sharing options...
Jakey Styley Posted March 18, 2020 Share Posted March 18, 2020 Continuing with SPY puts, have a cheeky call on grubhub though. Blue Apron up 500% this week because of restaurants closing! Quote Link to comment Share on other sites More sharing options...
downzy Posted March 18, 2020 Share Posted March 18, 2020 2 hours ago, Ratbrain said: “You never want a serious crisis to go to waste. And what I mean by that is an opportunity to do things you think you could not do before.” https://nv.vi-serve.com/vis-media/101/262/8Be26nAB2kUrBE4p7P95_720p.mp4 I agree with most of what he says, particularly the ridiculousness of a payroll tax cut since it only helps people who have jobs. Where I disagree is his assessment that America will look more like South Korea versus Italy. In many ways I think America will be worse than Italy. https://www.thedailybeast.com/america-botched-coronavirus-testing-were-about-to-find-out-just-how-badly?ref=home But we shall see Quote Link to comment Share on other sites More sharing options...
Crazyman Posted March 19, 2020 Share Posted March 19, 2020 (edited) On 3/18/2020 at 4:02 PM, Jakey Styley said: Continuing with SPY puts, have a cheeky call on grubhub though. Blue Apron up 500% this week because of restaurants closing! I've been using inverse ETFs as a way to hedge and I was hoping the market would open up tomorrow so I could get some puts cheaper but I think I'm going all in on SPY 4/17 $200 puts. Still hoping we're up at the open, though. Saturday evening edit: sold slightly more than half the contracts I had at the close (when SPY was dipping to the lows) - still have 20 contracts. Might sell 5 on Monday and hold the rest until later in the week as a hedge. Monday is almost certainly gonna limit down, possibly twice (aka 13%). This is gonna be another ugly week. Stay safe, everyone. Edited March 21, 2020 by Crazyman Quote Link to comment Share on other sites More sharing options...
downzy Posted March 22, 2020 Share Posted March 22, 2020 The US Senate fails to advance stimulus bill. If they don’t fix before markets open expect a massive sell off. Quote Link to comment Share on other sites More sharing options...
Dazey Posted March 22, 2020 Share Posted March 22, 2020 26 minutes ago, downzy said: The US Senate fails to advance stimulus bill. If they don’t fix before markets open expect a massive sell off. Passing a bill with 60 votes might be a problem for the GOP if they don't compromise a little more on workers protections. With 5 Republican senators in isolation as of tonight they need 12 Democrats to support them so this could get interesting unless they're happy to tank the markets tomorrow. Quote Link to comment Share on other sites More sharing options...
downzy Posted March 23, 2020 Share Posted March 23, 2020 DOW futures down 5%. Tomorrow is going to be a bloodbath if the Senate can’t figure this out. One silver lining for my daughter is I’ve been keeping 35 percent of here registered education savings fund in cash in the expectation there would be a massive correction between the day we started it and the day she attends college/university. The rest are invested in mostly gold stocks so she’s actually up in this downturn. Hopefully she puts the money to good use, becomes smart and takes care of her parents during retirement! 🤪 1 1 Quote Link to comment Share on other sites More sharing options...
downzy Posted March 23, 2020 Share Posted March 23, 2020 Why this time isn't like every other time: https://www.vox.com/2020/3/23/21188900/coronavirus-stock-market-recession-depression-trump-jobs-unemployment It might take 3 to 5 years to recover. Quote Link to comment Share on other sites More sharing options...
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