Markets still falling like whoa

[washparkhorn 9939]

Does anyone believe there is not an asset bubble presently?

The question is how to slowly deflate it or grow the economy to catch up. No?

[Tailgate 3022]

Lesson: Never leave the market. Just balance your portfolio to your situation and sit back. It’s tough not to worry, but hanging in there during tough times is what keeps you in there during great times. I went though this in the .com bust and in ‘08 and never pulled out. Very thankful for that today, even though I had serious thoughts to run to the sideline. The market always comes back and goes up. And to miss this recent bull run you’d have lost our on some serious gains.

[Anastasis 23480]

4 minutes ago, washparkhorn said:

Does anyone believe there is not an asset bubble presently?

The question is how to slowly deflate it or grow the economy to catch up. No?

 Of course there is a bubble.  The only real question is how much money can I lose watching SPY puts expire until reality catches up. 

[StassneyHorn 6624]

I went heavy into cannabis ETFs this April. Would’ve been a better choice going to strip clubs

[Bozo_Casanova 26510]

 Of course there is a bubble.  The only real question is how much money can I lose watching SPY puts expire until reality catches up. 

You should have sold the puts instead.

[Anastasis 23480]

5 minutes ago, Bozo_Casanova said:

You should have sold the puts instead.

That shit looked right before it turned wrong. 

In all seriousness, we are in looney toons land.

[Anastasis 23480]

28 minutes ago, StassneyHorn said:

I went heavy into cannabis ETFs this April. Would’ve been a better choice going to strip clubs

[Nice Guy Eddie 13515]

On 12/27/2019 at 10:39 PM, Tailgate said:

Lesson: Never leave the market. Just balance your portfolio to your situation and sit back. It’s tough not to worry, but hanging in there during tough times is what keeps you in there during great times. I went though this in the .com bust and in ‘08 and never pulled out. Very thankful for that today, even though I had serious thoughts to run to the sideline. The market always comes back and goes up. And to miss this recent bull run you’d have lost our on some serious gains.

The key part is in your second sentence that most people ignore. If you think there is strong evidence that the market can drastically fall, there is nothing wrong with changing your risk profile to be more conservative.  But it doesn’t mean that you have to gamble 100% on the market falling. 

[Fudge Nuggets 19209]

On 12/27/2019 at 11:33 AM, Alvin89 said:

Dumb question, is there an easy way to go about shorting the market when the inevitable downturn happens?

1. Open a margin account at TD Ameritrade or any other discount broker of your liking.

2.  Enter trade order to sell short whatever number of shares of $SPY you desire.

3.  Something something something

4.  Profit.

[Bozo_Casanova 26510]

1. Open a margin account at TD Ameritrade or any other discount broker of your liking.
2.  Enter trade order to sell short whatever number of shares of $SPY you desire.
3.  Something something something
4.  Die broke

FIFY

[Wally Fairway 5571]

1 minute ago, Bozo_Casanova said:

FIFY

 

My strategy to buy puts gets you to broke, but much much slower

[Fudge Nuggets 19209]

I'm just saying that's an easy way to short the market "when the inevitable downturn happens".  Apparently OP has a way to diagnose a real downturn which I don't.  I am not advocating shorting the market but if I had to short it, that's how I would do it instead of burning my money with options.

[Reagan1k 3024]

On 12/27/2019 at 1:11 PM, elfenix said:

this is why i question when i hear stories on NPR about people having big retirement accounts but were wiped out in the great recession and now live in a broom closet.  did they sell everything at the bottom?

Two possibilities - sold at the bottom - locking in their losses with no subsequent reinvestment to grow as the market recovered......or more than likely they owned highly concentrated portfolios in companies that went bust or had all their 401(k) assets in company stock and the same thing happened.....company went bust and stock went to $0.

Think Enron......plenty of their employees had all their 401(k) assets in Enron itself and they lost it all.  Had they had their 401(k) in mutual funds they'd have lost their jobs but not their savings.

Edited December 30, 2019 by Reagan1k

[StassneyHorn 6624]

Stock market only goes up. Except for a month or two when it goes down.

Put me on TV.

[Wally Fairway 5571]

1 hour ago, StassneyHorn said:

Stock market only goes up. Except for a month or two when it goes down.

Put me on TV.

The market is about to go down, political turmoil, trade wars, military actions, Brexit, interest rates rising (or was it falling, I forget which), trade deficits, sovereign debt crisis,...

Put me on TV

[Continental Op 3934]

We are always about to experience a global economic collapse that will send us back into the dark ages always and forever.  Give me a pseudonym to post under on zerohedge. 

[Incredulity 11679]

7 hours ago, Continental Op said:

We are always about to experience a global economic collapse that will send us back into the dark ages always and forever.  Give me a pseudonym to post under on zerohedge. 

Daniel Simpson Day

[StassneyHorn 6624]

13 hours ago, Wally Fairway said:

The market is about to go down, political turmoil, trade wars, military actions, Brexit, interest rates rising (or was it falling, I forget which), trade deficits, sovereign debt crisis,...

Put me on TV

...for a month

[hornhorn 100]

On 12/27/2019 at 11:33 AM, Alvin89 said:

Dumb question, is there an easy way to go about shorting the market when the inevitable downturn happens?

Amongst other options, I'm surprised that no one has mentioned using the VIX to hedge against eventual downturn. You could buy long dated VIX calls and finance that purchase with selling similarly dated and slightly lower priced VIX puts. When the inevitable downturn occurs, the volatility will spike and increase the value of your calls(you sell those) and decrease the value of your puts(you buy those back at a lower price).

Profit. 

[Bozo_Casanova 26510]

56 minutes ago, hornhorn said:

Amongst other options, I'm surprised that no one has mentioned using the VIX to hedge against eventual downturn. You could buy long dated VIX calls and finance that purchase with selling similarly dated and slightly lower priced VIX puts. When the inevitable downturn occurs, the volatility will spike and increase the value of your calls(you sell those) and decrease the value of your puts(you buy those back at a lower price).

Profit. 

are u a wizard

[hornhorn 100]

2 minutes ago, Bozo_Casanova said:

are u a wizard

Only with numbers.

[Tailgate 3022]

Happy New Year!

[Anastasis 23480]

what a world. 

[Wally Fairway 5571]

How do I short the market?

Asking for that friend who wants to lose money.....and I'm trying to jinx errr-y bod-y

[workswithseed 2108]

Man, today sucked.

[GRHorn 105]

 

[hornbri 1400]

6 minutes ago, GRHorn said:

 

I had to google to understand that. 

[Fudge Nuggets 19209]

On 1/9/2020 at 9:45 AM, hornbri said:

I had to google to understand that. 

Care to explain?  I wouldn't even know what to google.

[Incredulity 11679]

29 minutes ago, Fudge Nuggets said:

Care to explain?  I wouldn't even know what to google.

Trump tweet.  

[Henry Hill 3156]

My 6598(zz) is on fire.

[Incredulity 11679]

30330?

[bernorange 8362]

4 hours ago, Fudge Nuggets said:

Care to explain?  I wouldn't even know what to google.

try '409k'

Edited January 10, 2020 by bernorange

[workswithseed 2108]

So I'm looking at stock and I see INPX and look at it from 5 years ago. What happened to this place. Damn.

[Fudge Nuggets 19209]

20 minutes ago, bernorange said:

try '409k'

I know about Trump’s 409k tweet but was trying to figure out what the two pictures had to do with anything. I guess I am over-complicating things and should channel my inner tweeter dumbass.

[Parliament 14272]

On 12/13/2019 at 9:09 AM, Parliament said:

I wanna short Tesla stock, and to that end, I set up a brokerage account with Vanguard.  Looks like no i gotta "borrow" Tesla stock from them and pay 9% interest to do so?  That sounds wrong.  What am I missing here?

Post has not held up.

[Incredulity 11679]

That would have hurt. Bad.

[Bozo_Casanova 26510]

6 hours ago, Parliament said:

Post has not held up.

Invest in stock,  speculate in options. 

[jimmyjazz 46000]

On 12/30/2019 at 3:37 PM, hornhorn said:

Amongst other options, I'm surprised that no one has mentioned using the VIX to hedge against eventual downturn. You could buy long dated VIX calls and finance that purchase with selling similarly dated and slightly lower priced VIX puts. When the inevitable downturn occurs, the volatility will spike and increase the value of your calls(you sell those) and decrease the value of your puts(you buy those back at a lower price).

Profit. 

VIX options don't really work that way.  Held to expiry, they do, but in the meantime, what you think should be a win is a loss.

[woohorn 1131]

I know about Trump’s 409k tweet but was trying to figure out what the two pictures had to do with anything. I guess I am over-complicating things and should channel my inner tweeter dumbass.

The black guy is Drake. It's Drakeposting. It's a meme.

https://knowyourmeme.com/memes/drakeposting

[hornhorn 100]

5 hours ago, jimmyjazz said:

VIX options don't really work that way.  Held to expiry, they do, but in the meantime, what you think should be a win is a loss.

Uh no they work exactly as I said they do. VIX closed at 12.56 on Friday, a 12 handle is one of the lowest points it has been since early 2019. In the last six months it has been as high as 23. I'm aware that it has hit 11 something as well but this is still pretty low. 

A contract for 17 call that expire in June 17 2020 is going for 2.55, let's say you buy 100 contracts: 10,000 X 2.55= 25,500. This is what you'll spend. 

A contract for 17 put that expire on June 17 2020 is going for 2.30, let's say you sold 100 contracts: 10,000 X 2.30= 23,000 This is what you'll receive. 

Net you spent $2,500. My bet is that VIX will spike up over 20 within the next few months at the very least, I'll remind you when it does and where these bets end up. Oh btw, it doesn't have to hit that high to make money. VIX can go to 15 next Friday and these trades make a great return.

Why don't we wait until May and see where this ends up. Cool? 

Edited January 12, 2020 by hornhorn

[Texas Jeff 1945]

Yesterday, I set out to discover exactly how the DJIA is calculated.  Turns out that it is pretty simple; it actually is an average.  They take 30 stocks, add up the price of all of the stocks, and divide by a "Dow divisor".  The value of the divisor is determined by the Wall Street Journal.  It's actually less than one, which means that the sum of all of the stock prices is actually multiplied by about seven to get the number you see.

So, the Dow changes if the company stock prices go up or down ... or if the folks at the WSJ decide to adjust the Dow divisor.  They are suppose to adjust the divisor to account for stock splits, dividends and other events that affect stock prices, but I couldn't figure out who or what exactly goes into this.  If the WSJ folks fail to take something into account, for example stock buybacks, the DJIA could rise or fall even though a company's value did not change.

Consider two Dow stocks, Boeing and Pfizer.  Boeing has the top price in the Dow today, around $330.  Pfizer is dead last around $40.  So a drop in Boeing of around $40 would do the same damage to the DJIA that Pfizer would do if it dropped to zero.  But Pfizer's market cap is actually higher than Boeing.  A $40 drop in Boeing would destroy about $22 billion in wealth, but a $40 drop in Pfizer would wipe out $220 billion.

It seems crazy to base a well known index on stock prices rather than market cap.  The top six Dow companies by price (Boeing, Apple, UnitedHealth, Goldman Sachs, Home Depot and McDonalds) combine for more than a third of the value of the DJIA.  The bottom six (Intel, Coca-Cola, Walgreens, Dow Chemical, Cisco and Pfizer) have less combined influence than either Boeing or Apple do alone.

 

[jimmyjazz 46000]

8 hours ago, hornhorn said:

Uh no they work exactly as I said they do.

. . .

My bet is that VIX will spike up over 20 within the next few months at the very least, I'll remind you when it does and where these bets end up. Oh btw, it doesn't have to hit that high to make money. VIX can go to 15 next Friday and these trades make a great return.

Why don't we wait until May and see where this ends up. Cool? 

I'll be rooting for you.  In my experience, the pricing on VIX options didn't change as much in response to surges or drops as one would expect.  That's purely anecdotal evidence which could have had something else baked in . . . I certainly haven't traded them much.

[hornhorn 100]

1 hour ago, jimmyjazz said:

I'll be rooting for you.  In my experience, the pricing on VIX options didn't change as much in response to surges or drops as one would expect.  That's purely anecdotal evidence which could have had something else baked in . . . I certainly haven't traded them much.

Well, you can't say that things work exactly opposite of what I said and then say this. 

I'm offering you actual market prices with real timelines and an end result. When market starts to tank and volatility picks up VIX will go up and although corresponding option prices may not jump like stocks but a 3 percent correction in the market means a massive change in the VIX which results into a change in options pricing. 

Profit. 

[Nice Guy Eddie 13515]

2 hours ago, Texas Jeff said:

Yesterday, I set out to discover exactly how the DJIA is calculated.  Turns out that it is pretty simple; it actually is an average.  They take 30 stocks, add up the price of all of the stocks, and divide by a "Dow divisor".  The value of the divisor is determined by the Wall Street Journal.  It's actually less than one, which means that the sum of all of the stock prices is actually multiplied by about seven to get the number you see.

So, the Dow changes if the company stock prices go up or down ... or if the folks at the WSJ decide to adjust the Dow divisor.  They are suppose to adjust the divisor to account for stock splits, dividends and other events that affect stock prices, but I couldn't figure out who or what exactly goes into this.  If the WSJ folks fail to take something into account, for example stock buybacks, the DJIA could rise or fall even though a company's value did not change.

Consider two Dow stocks, Boeing and Pfizer.  Boeing has the top price in the Dow today, around $330.  Pfizer is dead last around $40.  So a drop in Boeing of around $40 would do the same damage to the DJIA that Pfizer would do if it dropped to zero.  But Pfizer's market cap is actually higher than Boeing.  A $40 drop in Boeing would destroy about $22 billion in wealth, but a $40 drop in Pfizer would wipe out $220 billion.

It seems crazy to base a well known index on stock prices rather than market cap.  The top six Dow companies by price (Boeing, Apple, UnitedHealth, Goldman Sachs, Home Depot and McDonalds) combine for more than a third of the value of the DJIA.  The bottom six (Intel, Coca-Cola, Walgreens, Dow Chemical, Cisco and Pfizer) have less combined influence than either Boeing or Apple do alone.

 

Complete investing amateur here but the Dow Jones 30 average doesn’t seem like the best index to focus on.  Do 30 companies really indicate short or long term trends?  

[jimmyjazz 46000]

2 hours ago, hornhorn said:

Well, you can't say that things work exactly opposite of what I said 

I went back and looked at my original post, and I think I see where we're crossed up.  It's in my statement "what you think is a win is a loss", which was certainly overly broad and probably not true for a large VIX spike.  Sloppy writing on my part.  I have seen call prices drop with minor movements up in the VIX, though.  

If you get a surge in your time frame, you should profit, as long as you pull the trigger.  I wouldn't expect it to be a particularly handsome return, but like I said, for your sake I hope it is.

[hornhorn 100]

3 minutes ago, jimmyjazz said:

I went back and looked at my original post, and I think I see where we're crossed up.  It's in my statement "what you think is a win is a loss", which was certainly overly broad and probably not true for a large VIX spike.  Sloppy writing on my part.  I have seen call prices drop with minor movements up in the VIX, though.  

Fair enough. 

3 minutes ago, jimmyjazz said:

If you get a surge in your time frame, you should profit, as long as you pull the trigger.  I wouldn't expect it to be a particularly handsome return, but like I said, for your sake I hope it is.

This isn't a set trade either. You can manage this trade as you move along unlike derivatives with stocks. You can wait around a month, say Feb 7th and if VIX hasn't spiked to your liking, you can move this trade another couple of months and set the same strike prices for August expiration. You may lose some theta but it isn't going to be much since the likelihood of VIX being lower than 12.56 is low. But you do that knowing that VIX has to spike at some point, its a certainty. And when it does, even in low twenties(which is where the VIX hovered all late July, August and early Sep 2019) you're going to see ridiculous returns. Like, few times your net investment. 

[jimmyjazz 46000]

I haven't looked up the chains -- what's the net theta?  What's the theta on each call & put?

[Bozo_Casanova 26510]

I don’t fuck with VIX. There be dragons.

[StassneyHorn 6624]

Damn, I’m gonna be fucking rich when cannabis stocks turn around. San Pedro or Punta Cana townhome?

[hornhorn 100]

19 hours ago, jimmyjazz said:

I haven't looked up the chains -- what's the net theta?  What's the theta on each call & put?

-0.01 for calls and 0 for puts.