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Markets still falling like whoa

Llano Estacado

By Llano Estacado
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Wally Fairway

Wally Fairway 5,544

Posted
Posted
12 minutes ago, Hmmm said:

Dumb question amnesty:  if i have $100 and gain 10 percent  in week 1, value increases to 110.  Assume  I gain another 10 percent in week 2, values totals 121.  Total gains in two weeks is $21.

On the flip side, if i have $100 and lose 10 percent  in week 1, values deceases to  90.  Assume I Iose another 10 percent in week 2, total value is 81 .  Total losses in two weeks is: $!9.

Basically, in laymen terms, you gain more than you lose less (in this vacuum experiment).  Is there some economic/trading term for this (aside from compound interest or "you gotta spend money to make money")?

 

*I'm am super noob and appreciate any insight, right or wrong, so long as it is "honest"

Congrats - you have discovered the magic of compounding, use it to your benefit.

Here is another way to look at this - the S&P 500 52 week high (in February) was 3,393.52, it has fallen 1156.12 (34%) through yesterday to get to 2,237.40. It will have to gain over 51% to get back to where it was. 
Just remember this much simpler investing strategy - buy low/sell high. 

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Eastwood
Eastwood

That's why I'm out. There is no end game, IMO. This has to be fixed outside of the market and I got too nervous about what that entails for retail investors. They will always be last on the list, if o

Rusty Shackelford
Rusty Shackelford
Eastwood
Eastwood

I'm not a financial advisor. This is not financial advise. I don't work in finance. I do not have a degree in finance. Actually, I have a BA and I'm bad at math past Cal I. I won't apologize for the l

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Fudge Nuggets

Fudge Nuggets 19,190

Posted
Posted
9 hours ago, Parliament said:

I'm trying to understand buying options, specifically what to offer for them. In understand the "bid" and "ask" part, but not what I should put my bid in at.

An example. The bid is $1 and the ask is $2. If I make my own bid at $1.50, I'm first in line, but it won't fill until some "asker" lowers his ask to my $1.50. That part I get. If I bid $2 will it fill automatically? If I bid $2.50 will it fill at $2 or $2.50?

Please help me understand Open Interest. Is that the total of bids and asks on a certain option? And we don't know what the bid/ask ratio is?

What strike price should I be looking at? In my college grain marketing class we were taught to buy options that were just a bit out of the money? Looks like with securities options you should look at the options with more open interest?

Thanks for your help with this.

https://finance.yahoo.com/quote/SPY/options/2e64d0573cf8b1bd1157eb837a12bc9b.jpg

You shouldn't be messing with options.  Period.

Nothing against you personally, but if you now this little about them you might as well set your money on fire.

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WBT

WBT 20,564

Posted
Posted
1 hour ago, Wally Fairway said:

FWIW - US 1-month and 3-month T-bills just went to negative interest rates this morning premarket.
Wheeee - free money for everyone

I need to work on my plan for burying cash in the backyard.

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Fudge Nuggets

Fudge Nuggets 19,190

Posted
Posted
21 hours ago, Harrison Stafford said:

Back in SOXS at $29.70.  Should've bought this A.M. at $28, but got greedy.  Watched it run to $33 and retrace.  Looking for $33 on this trade. Love the volatility (although the VIX is falling).

You looking to "average down" a little bit, or just ride it out, or already cut and run?

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UTexasFight

UTexasFight 9,432

Posted
Posted
Everyone wants this to be over so bad they’re willing to go all in at the first sign of good news. Interesting to see the market to go gangbusters over the inkling of a deal.... a deal that hasn’t been done yet!

Yep
Reposting this from the article I linked above...sure seems like we may be entering this stage:

Stage three is stabilization. Stocks halt their decline, thereby ending the impression that they will do nothing but fall. The panic subsides but the situation remains grim. Investors believed during the first stage that stock prices slide on a whim. Now they realize that equities stumbled for good reason, and that until that reason is eliminated, they will continue to struggle. Shareholders’ losses will not soon be recouped.

This period is marked by turbulence. Stocks rally, sometimes furiously, only to be knocked back down. Investor sentiment varies between guarded optimism that the end is at least remotely in sight, and despair that the hope was false. This is typically the bear market’s longest period, extending for several months. (Several years for The Great Depression, but we do not wish to emulate that example.)
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Blotto

Blotto 23,498

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Posted (edited)
36 minutes ago, Wally Fairway said:

It is hard to pull the trigger to get deeper in to puts, at these very attractive prices.....whilst looking at the bloodbath in my options so far today.

Yesterday when SPY was at 224, I bought puts and calls at 220 and 228 for a total cost of $10 per pair. Sold the calls right after market open for $12 to lock in a 20% profit regardless of what happens to the puts, giving me til tomorrow afternoon to see a correction. I expect the market to swing around a lot in the coming weeks as we digest news (good and bad), so for my WFH gambling needs, straddles/strangles will likely fit the bill. Don't need to guess the market direction, just need movement which seems likely. Of course, I'm still holding some puts at 275,250 and 225 so the market generally trending up will erase a lot of those profits. 

Also purchased some SOXS $25 calls (4/17) for $2.45 this morning. Assuming the up/down market pattern continues for the next couple of weeks, hopefully I can get out of this for a quick profit in the next week or so. SOXS closed at $29 yesterday, so it won't take much. 

Edited by Blotto
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Harrison Stafford

Harrison Stafford 3,335

Posted
Posted
1 hour ago, Fudge Nuggets said:

You looking to "average down" a little bit, or just ride it out, or already cut and run?

Am riding it out and having no fun on the wrong side of this trade.  Way underwater.  However, I’m still confident we’re going lower and am prepared to hold.  Buy low, sell high, and sell when you want to.  Not when you have to.

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4thgenhorn

4thgenhorn 38

Posted
Posted

I don’t think today’s rally is all Americans piling in new cash...rather the professionals covering their shorts all at once just in case the stimulus passes. 

tomorrow will probably be a big down day, just cause today is up so much, just like last few weeks. probably should sell a little. 
 

I’ve never seen such wild swings, computer AI algs  going crazy!!!

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LTtxfan

LTtxfan 49,181

Posted
Posted (edited)

Lots of crap stocks rallying huge off of big speculation today and bailouts for Boeing, Airlines and Hotels...

Once more specific details leak on Congress stimulus deal, and a little more bad news/Gov't missteps --Market most likely retests the SP500 2200 level in next 2 Days...

 

Edited by LTtxfan
mistake
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CooterBrown

CooterBrown 18,006

Posted
Posted (edited)

I'm almost completely on the sidelines.  Still not buying. I hopefully won't need the cash but I'd rather have it available sitting there in my brokerage account just in case than stress out daily watching these wild fucking swings in the market.

 

 

Edited by CooterBrown
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Dnaguy

Dnaguy 11,948

Posted
Posted (edited)
47 minutes ago, CooterBrown said:

I'm almost completely on the sidelines.  Still not buying. I hopefully won't need the cash but I'd rather have it available sitting there in my brokerage account just in case than stress out daily watching these wild fucking swings in the market.

 

 

I’ve put in limit buys a good 15-20% lower than yesterday close on some companies I want to hold for a while after I buy them.

Seems like a no risk venture and if I hit, WHOOPIEEEEE. If not, oh well I still have cash and can watch.

I don’t have the stomach for marketing bets on the roller coaster but more power to those who make money doing it.

Edited by Dnaguy
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RollLeft

RollLeft 5,044

Posted
Posted
17 hours ago, Parliament said:

I'm trying to understand buying options, specifically what to offer for them. In understand the "bid" and "ask" part, but not what I should put my bid in at.

An example. The bid is $1 and the ask is $2. If I make my own bid at $1.50, I'm first in line, but it won't fill until some "asker" lowers his ask to my $1.50. That part I get. If I bid $2 will it fill automatically? If I bid $2.50 will it fill at $2 or $2.50?

Please help me understand Open Interest. Is that the total of bids and asks on a certain option? And we don't know what the bid/ask ratio is?

What strike price should I be looking at? In my college grain marketing class we were taught to buy options that were just a bit out of the money? Looks like with securities options you should look at the options with more open interest?

Thanks for your help with this.

https://finance.yahoo.com/quote/SPY/options/2e64d0573cf8b1bd1157eb837a12bc9b.jpg

While what fudge packer said is true, you do you man.  Its your money.  

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ChiTownDoc

ChiTownDoc 21,152

Posted
Posted
55 minutes ago, babysdaddy said:

Just got a capital call for a PE fund.  Cool timing guys.

 

Hahaha, this is awesome.  I had so much invested in PE funds and it just sat in cash since Jan 2019.  I was upset as I watched the market fully moon my ass.  Then I was pretty cool with it...until the last 2 weeks when they're calling my money left and right.  Not sure how I feel about it...

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bernorange

bernorange 8,361

Posted
Posted
Quote

Huge spreads are occurring in the gold market Tuesday with pricing for futures contracts far above spot prices.

Also, earlier in the day, nearby futures were more expensive than deferred, a sign of strong demand in any commodity market.

Just before noon EDT, one price vendor was showing spot metal was trading at $1,612.10 an ounce while at the same time showing the Comex April futures were at $1,654.10 an ounce – a spread of $42 an ounce. It was much wider earlier in the day.

“I’ve never seen that before,” said one gold trader who has been in the market for 30-plus years.

Some contacts suggested the discrepancy is an evolving story that is still unfolding, with traders trying to figure out what’s happening.

The London Bullion Market issued this statement to Kitco News:

“The London gold market continues to be open for business. There has, however, been some impact on liquidity arising from price volatility in Comex 100-oz [ounce] futures contracts. LBMA has offered its support to CME Group to facilitate physical delivery in New York and is working closely with Comex and other key stakeholders to ensure the efficient running of the global gold market.”

Meanwhile, Ole Hansen, head of commodity strategy at Saxo Bank, pointed out that a lockdown is occurring in two biggest gold hubs in the world – New York and London – so many traders are working from home. This has caused a breakdown in the marketplace, he said.

“There is no price discovery in the market right now,” he said Tuesday morning. ...

https://www.kitco.com/news/2020-03-24/Huge-spreads-occurring-in-gold-backwardation-reflects-strong-demand.html

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Blotto

Blotto 23,498

Posted
Posted
2 hours ago, WBT said:

The S&P 500 hasn't had consecutive up days since 2/11 & 2/12.  I don't think we're ready to break that yet.  Probably down 7-10% tomorrow.

The carnage basically started on the 24th of Feb. Here's the daily percentages since. Damn day traders dream

image.thumb.png.f59f863c4c92de3cb1cd87348d488b4f.png

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Eastwood

Eastwood 4,394

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Posted
7 minutes ago, The People’s Elbow said:

Late Friday and first thing this morning, I started nibbling: bought Boeing, United Airlines, Royal Caribbean, Hilton, and a couple others thinking we’d bounce. Hookers and blow tonight, boys. 

Also, take a look at Coca-Cola. It is at a 4 year low, right now, and was trading flat for a good while before COVID came in. They lost the restaurants and bars, so it will like climb back up as soon as the restrictions are lifted.

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Anastasis

Anastasis 23,469

Posted
Posted
1 minute ago, Eastwood said:

Also, take a look at Coca-Cola. It is at a 4 year low, right now, and was trading flat for a good while before COVID came in. They lost the restaurants and bars, so it will like climb back up as soon as the restrictions are lifted.

I love KO. 

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Viking

Viking 301

Posted
Posted
8 hours ago, Auto Driller said:

This is how you know the market is rational.

They have > 50% (?) of their locations closed, maaaaybe 20% occupancy worldwide, presumably going to fire 70% or more of their employees.

 

BUY BUY BUY

That's all been priced in. Now it's a growth stock.

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