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Markets still falling like whoa

Llano Estacado

By Llano Estacado
in Business and Markets

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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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52-80

52-80 19,375

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most brokers are set to auto-assign ITM options right?  i suppose it'll show up the next trading day, since determination happens at end of trading day.

i sold a 81C and it closed at 81.08, and a 18.50c that closed at 18.47.  that's some tightrope walking shit

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Eastwood

Eastwood 4,394

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most brokers are set to auto-assign ITM options right?  i suppose it'll show up the next trading day, since determination happens at end of trading day.
i sold a 81C and it closed at 81.08, and a 18.50c that closed at 18.47.  that's some tightrope walking shit
Most brokers auto exercise unless the person contacts them and tells them not to. And someone might know for sure, but I think sometimes exercised options don't show up until settlement date, so around 2 business days.
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Blotto

Blotto 23,975

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1 hour ago, Eastwood said:

Most brokers auto exercise unless the person contacts them and tells them not to. And someone might know for sure, but I think sometimes exercised options don't show up until settlement date, so around 2 business days.

A few years ago when I didnt know much about what the fuck I was doing, I had some SPY call options that finished $0.02 ITM after a furious rally in the last 10 minutes on a Friday. I logged into my account that Saturday and the SPY shares were already sitting there along with a nice negative balance, so Etrade had that shit posted that weekend. Lesson learned, I had to wire the money that Monday, and now I make sure all my shit is closed out by end of day on expiration day. 

Edited by Blotto
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Wally Fairway

Wally Fairway 5,664

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9 hours ago, NateHitch said:

What do y'all think about ALT? Got in around $4.50 and have enjoyed the ride. I'm torn between thinking $10 is the top or thinking it could top $30-40

Looks like you may get your chance to exit at $10 today (if pre-market is any indication), why not sell at least enough to recoup your investment and then ride some gains?
(this is clearly not #stonk advice in which you would let it ride)

 

8 hours ago, TwiceHorn said:

Pigs get fat, hogs get slaughtered.

This is good advice - I've stolen a phrase I heard years ago "nobody ever went broke realizing their gains"

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Wally Fairway

Wally Fairway 5,664

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1 hour ago, Wally Fairway said:

Looks like you may get your chance to exit at $10 today (if pre-market is any indication), why not sell at least enough to recoup your investment and then ride some gains?
(this is clearly not #stonk advice in which you would let it ride)

Looks like the Wally jinx is in full effect - ALT is down, after being up pre-market....falling soon after I posted

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52-80

52-80 19,375

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2 hours ago, 52-80 said:

fucking zoom.  i bought 190C that expired 1 day too early.  closed friday @ 175.  is currently @ 197......atleast wouldve salvaged intrinsic value.

options buyers = donks.

204.... errbody wants that juicy earnings report

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Tailgate

Tailgate 3,054

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I went to 30% cash @ 30 days ago in my “play account.” It’s now at all time high (ATH). Made some good bets during quarantine.

My primary account (100% invested) will basically be where it was in January (ATH) after today.

Markets truly hard to predict and just staying the course is something I’ll continue to do. Was really tough not to get emotional two months ago. Luckily the gray hair is paying off.

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TexasEd

TexasEd 8,248

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YTD I am up 0.75% so yay me.  Still down ~9% from the Feb high but now I'm in not too worried range.  Did the math and I'm closer to 20% cash so I may still go a little more conservative if tonight is another bad night.  Hopefully the weekend (everyday is a weekend) was the worst of the rioting.

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NateHitch

NateHitch 1,282

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Looks like you may get your chance to exit at $10 today (if pre-market is any indication), why not sell at least enough to recoup your investment and then ride some gains?
(this is clearly not #stonk advice in which you would let it ride)


Sold 70% at market open and put some into novavax which turned out well. It's like a daily crap shoot between Moderna and novavax and what they're going to do. Going to keep an eye on ALT though, I still think it could make another leap
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Tailgate

Tailgate 3,054

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1 hour ago, T’Boo Ted Marshall said:

Was hoping LUV would dip back into the mid 20’s over the last few weeks.
Nope.

My oldest got a stimulus check and wanted to invest some. She went LUV in the $20s and I told her good call. Long hold there.

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ChiTownDoc

ChiTownDoc 21,326

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I don't want to pay ordinary income taxes on the oil gains but a part of me wants to take some profit.  I'd never go 10% of my entire portfolio on 3 names (and in oil of all places) but here we are.  Has saved my ass as I left some cash on sidelines.  I'm feeling in the stonks mood and will let em ride at this point but I rarely get lucky like that and I'm sure it will come crashing back soon. 

Any of you get into the distressed debt funds?  A lot of major groups do them and they have been the rage the last couple months.  I did Monarch (4.5B AUM) and Varde (14.5B AUM) with some money I had pulled out at lows.  

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gsoda3

gsoda3 3,358

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Posted
Just now, 52-80 said:

why are there still people on the floor?  whats the point?

tbh they're not that essential.  they have open auctions (which are managed electronically anyway) for IPOs and halted stocks.  there are specific orders sent to floor brokers that only floor brokers can handle in real time (machines don't handle them, they're sent to the brokers who have to be approve the orders and then send them on to the specialist, or what they call DIMM now).  if they do away with floor brokers we're honestly not going to lose much at all in terms of function.  the floor brokers just want to keep a good gig going, they make their money from order flow by taking a commission per share they transact for clients.  most floro brokers would go out of business if that stopped.  they're terrible traders and wouldn't be able to trade their way out of a paper bag.  

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Incredulity

Incredulity 11,861

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13 minutes ago, 52-80 said:

why are there still people on the floor?  whats the point?

From what I have heard and read about this question the floor traders "inefficiency" leads to better (or worse i suppose for the counterparty) deals for their customers based on human interactions.

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washparkhorn

washparkhorn 9,967

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Nice overview of how the Fed protected "the markets."  

Spoiler

 

There is only one reason for a stock or bond prices to go up. And that’s because of the flow of funds into the stock market. What had been supporting the stock market for the last 12 years was very largely stock buybacks by companies using their revenue to sort of close down their business, disinvest and buy their own stocks to at least keep the prices up. Well, what’s flowing into the market right now? Obviously, it’s not corporate profits buying their own stocks, and it’s certainly not popular money coming into the market by small investors thinking that stocks are going to earn more. All this money is coming into the market from the 10 trillion dollar bailout via the Federal Reserve. The Federal Reserve is going out directly and is buying stocks, bonds, junk bonds, mortgages, junk mortgages, all to prop up the value of assets.

     Now, when it’s putting this money into the stock market, it’s buying stocks that are already issued and have long since —the proceeds have been spent on building factories or enterprises or as means of making money. So none of this bailout money, none of this 10 trillion going into the stock market has any effect at all on the real economy of production and consumption. It’s solely to support the assets that are held almost eighty five percent by the wealthiest 10 percent of the economy.

So the Fed has revived the stock market downturn. It’s come up, and what it said is, “Folks, you can bail out of the stock market, give us your junk bonds. That’s sort of like the Statue of Liberty for wealthy people. Give us your stocks. Sell your bonds. We’ll buy them all up at Federal Reserve expense and will purchase them. And we’ll also do our own forward buying to manipulate the stock market by promising to buy our stock, so  the higher price in the forward market. So that’s going to create a speculative demand for stock. So the speculative demand for stocks by Federal Reserve manipulation and the actual flow of funding money into the stock market from the government has been pushing it back up, giving the illusion of prosperity, at least for the 10 percent.

 

https://theanalysis.news/interviews/feds-10-trillion-defends-assets-of-the-rich-michael-hudson/

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Baconboy

Baconboy 143

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38 minutes ago, washparkhorn said:

Nice overview of how the Fed protected "the markets."  

  Hide contents

 

 

 

https://theanalysis.news/interviews/feds-10-trillion-defends-assets-of-the-rich-michael-hudson/

This reads as if it was written by a high school dropout. Not trying to be overly surly, but does anyone know if "theanalysis.news" is credible? I'll hangup and listen.

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washparkhorn

washparkhorn 9,967

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Posted (edited)
32 minutes ago, Baconboy said:

This reads as if it was written by a high school dropout. Not trying to be overly surly, but does anyone know if "theanalysis.news" is credible? I'll hangup and listen.

Break out of your media bubble. J/K  

Michael Hudson is a well known economist who has focused on all things debt related his entire career. This is a transcript of a podcast done with Paul Jay - a journalist you should know or get to know if you want to know more about markets. 

Edited by washparkhorn
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bernorange

bernorange 8,385

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"The Federal Reserve is going out directly and is buying stocks, bonds, junk bonds, mortgages, junk mortgages ..."

Not technically true.  It's a simplification of what is happening.

"... none of this bailout money, none of this 10 trillion going into the stock market ..."

The Fed has not pumped 10 Trillion into the stock market.  The Fed's balance sheet has expanded roughly $4T since February.  It's just been a small part of that in the last few weeks that were allocated to the facilities for all the market buying.  How much of the Fed's stimulus to banks has cause credit expansion funding for their trading desks (ie. not the Fed buying, but downstream players), I don't know.

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washparkhorn

washparkhorn 9,967

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40 minutes ago, bernorange said:

"The Federal Reserve is going out directly and is buying stocks, bonds, junk bonds, mortgages, junk mortgages ..."

Not technically true.  It's a simplification of what is happening.

It has to be simplified or the eyes just glaze over. The Fed is purchasing corporate debt and buying shares of ETF's that track the value of shares of companies they are investing in (investing = buying their corporate debt). It's risky but for the fact the Fed is able to buy these assets using the printing press. 

 
 
🤓
 
Spoiler

 

Frankly, I think the printing press remains dangerous but NOT because of any inflation danger. It is more the danger of a Mainstreet economy unconnected to Financial Tech when FinTech capital comes largely from America and the World consuming.

If the consumer engine is flaming out or unevenly sputtering with inflation and deflation, the FinTech capital fuel supply will disappear and - truly - the Fed cannot save it. No one will believe dollars are worth a damn anymore. The World invests in the US because the economic system works traditionally. Austerity is not a sane economic policy given our economic conditions. It is the wrong prescription for the current economic state of affairs in this country and the world. The Fed knows this and has given the go-ahead to Congres to move forward with an aggressive (but accountable) fiscal recovery plan. The Fed believes fiscal policy must be comparable to monetary policy. 

We have juiced the markets. If the markets know what feeds them, they better call on the US to prop up its consumers through fiscal policy. We have slowed tremendously. The markets are running on starter fluid.  We need a robust restart with automatic economic stabilizers. 

The Fed has the knowledge and authority to propose comprehensive recovery plans. Congress must agree to the fiscal portions - technically. There are monetary policies the Fed could put into place that would distribute dollars (through special asset vehicles - such as the one that is buying corporate debt and ETF shares). This should be a Congressional fix, though. If they won't act, the Fed can pull out its bunker-buster to prime the entire economic system. Without Congressional approval, however, it would be subject to immediate Congressional review and possible reversal. 

The good thing about the Fed backing the markets - directly and indirectly - is that everyone knows the Fed will go down with the ship.

There is no bigger backstop than the Fed. This is an economic crisis. The Fed has saved the markets, so far. Its job is not done by a long shot, though. The Fed knows this and is prepared for the long run supporting them as best as it can. They have room to keep printing right now. 

Federal leaders need to do more. We are still in the first quarter of this economic crisis. Everyone wants it fixed immediately - like what the Fed did - for the markets. 

 

 

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Anastasis

Anastasis 23,703

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What does your breakdown in your 401k look like right now? 

I am heavy on large caps and thinking that I need to rebalance, but I ended up with this balance thinking that large caps were a better place to capture the spring back and minimize the risks to the downside. Anyways, curious what your balance looks like and where to be moving forward.

55% cash

39% large (SP index, JPM growth, Schwab value) 

6% small (russell index, growth, value)

0% international, 0% employer stock

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