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high_desert
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28099502 - 12/15/22 07:51 PM (1 year, 1 month ago) |
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What will you buy if there's a major market panic?
I don't believe in long positions ever or investing if you have less than say 50k, but I don't think I could turn down something like SSO at 26. If I wasn't poor, I'd load up on JEPI, SCHK and SPLG with a little seasoning of SSO and UPRO.
But alas I only have a 15k account so I'm stuck short selling the worst stocks in the world.
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Hartford
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28099859 - 12/16/22 03:08 AM (1 year, 1 month ago) |
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That USEA has been a juggernaut
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: high_desert] 1
#28100317 - 12/16/22 10:45 AM (1 year, 1 month ago) |
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Quote:
high_desert said: What will you buy if there's a major market panic?
For specific issues, it would depend how and when the panic came about. But like you said, some plain old SPY or SSO are the relatively "safe" plays, which you can then adjunct or swap out of incrementally, as you pick out individual names from the rubble.
Keeping an eye on RIG. It's not really actionable right here, but is really starting to tighten up just above its 200 and 50 day moving averages which are coiled together. Ideally, one would look to start building a position under $4 as a placeholder, and then attempt to catch a breakout above $4.50 to add to it. Breakouts haven't been working too well in this market however, so if you do attempt to buy a breakout on this, make sure you trail up a stop right away.
FSLR and ENPH coming back to tag their 50 day MA's. No position at the moment.
AEHR holding its 50 after the bounce I suspected might be in play yesterday. My short puts expire today, the $25's are definitely getting put to me, the $22.50's still a wildcard, but I will let them assign if that's what the market has in store, as I like this area for accumulation on AEHR.
SPY @ my target ~$380 retracement level. Would be looking for a bounce next week, but it being the leadup to the holidays, liquidity will be lower and wonky things can happen.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28100361 - 12/16/22 11:15 AM (1 year, 1 month ago) |
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After the consistent bleed out all morning, I'm looking for a little reversion here. Picked up a handful of SPY $300 calls expiring next week right here on the current lows of the day, with a stock based stop @ SPY $381.03. Not looking for too much here, just bored and expecting we might take a quick stab at reverting to VWAP which is up just above $383. Utilizing highly liquid weekly calls on the SPY, I have about 50% upside to about 5% downside. That's a trade I'm willing to take, and this position will be only for a day trade.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28100373 - 12/16/22 11:22 AM (1 year, 1 month ago) |
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Got a fresh 15 minute candle with a higher low and improving volume. Stop moved up to breakeven at $381.34. Price promptly ricocheted right off the 15 minute 8 period EMA @ $381.85 to take me out of the trade for a wash. Like watching paint dry, that'll be all I try to be cute with today.
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high_desert
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28102839 - 12/17/22 11:21 PM (1 year, 1 month ago) |
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Quote:
geokills said: Got a fresh 15 minute candle with a higher low and improving volume. Stop moved up to breakeven at $381.34. Price promptly ricocheted right off the 15 minute 8 period EMA @ $381.85 to take me out of the trade for a wash. Like watching paint dry, that'll be all I try to be cute with today.
Do you ever trade intraday TQQQ contracts? Since the sell off I wonder how it's acting.
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Hikeadellic
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: high_desert] 1
#28103702 - 12/18/22 02:24 PM (1 year, 1 month ago) |
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I like t/s qqq intraday when I feel strongly about the direction the market is moving short term based on news or TA
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: high_desert]
#28104593 - 12/19/22 09:33 AM (1 year, 1 month ago) |
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If I'm taking a broad based index trade, it's typically via the SPY, its associated options, and sometimes SSO for longer duration, when I don't want to deal with the options spreads or time risk. I tend to stay away from the Ultras because of their inherent price deterioration, although I have in the past taken momentum trades via UVXY, however anytime I've stuck around too long in those trades, they haven't worked out very well. Really only appropriate for very short-term swings, and due to my highly variable track record with the ultras, I haven't used them in years.
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high_desert
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28104630 - 12/19/22 10:07 AM (1 year, 1 month ago) |
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Quote:
geokills said: If I'm taking a broad based index trade, it's typically via the SPY, its associated options, and sometimes SSO for longer duration, when I don't want to deal with the options spreads or time risk. I tend to stay away from the Ultras because of their inherent price deterioration, although I have in the past taken momentum trades via UVXY, however anytime I've stuck around too long in those trades, they haven't worked out very well. Really only appropriate for very short-term swings, and due to my highly variable track record with the ultras, I haven't used them in years.
I think this is solid for multi-day or positions. I never really seriously considered major swings with TQ or other 3x levers. But, I had a strategy in place for dip buying in a bull market but i never got to use it successfully due to the market conditions this year. It was dip buying UPRO at key EMAs to catch the bottom half of the move back up then transfer to SSO at that mid point to lessen downside risk but maintain a lot of good leveraged exposure. Then of course move SSO into cash or non leveraged etfs to take profits at some point. The reason for this was that my analysis showed that for the dips of the last bull run UPRO showed a lot better performance coming out of dips until about midway back to previous high then at that point the performance was basically on par with SSO. If you were sketch on how bullish the overall market is you could also do something like 20-30 day protective puts on your new SSO position to help limit risk of failure at that key midpoint back to highs. The general idea is to almost take profit by moving to SSO to take advantage of its lower downside risk yet still get almost the entire move back up to highs as if you had stayed in URPO the whole time. Of course you have to be in a pretty confirmed bull market to pull this off and your dip buy risk management and position scaling skills have to be pretty good. I employed this on one of the first major sell offs to kick off this bear market and obviously got stopped out of the UPRO and I'm grateful I took that stop. But yeah I'd love to see this strategy work as I saw that it did for dip after dip in the last bull run until of course I tried it then the S&P went into complete bear mode 😒. I was suspicious and was planning on protective puts at that midway inflection point or other key resistance level but I never even got a chance to do that due to the severity of the hemmoraging.
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Hartford
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28104973 - 12/19/22 03:46 PM (1 year, 1 month ago) |
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Two stocks that I'm bullish on are Spotify and Alibaba.
Spotify is suffering from misplaced hate due to perceived covid misinformation, but when the coming investigations begin to validate the alleged misinformation, Spotify will turn to pure gold, and it will be vindicated.
Alibaba is undervalued due to the zero-covid policy, which has just recently been stopped. Chinese workers will not be phased by the sudden reversal, because covid does not threaten the healthy worker population.
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Hikeadellic
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Hartford]
#28105372 - 12/19/22 09:45 PM (1 year, 1 month ago) |
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Why BABA over AMZN?
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Hartford
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28105546 - 12/20/22 03:26 AM (1 year, 1 month ago) |
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Because the people who work for Amazon are spoiled compared to the people who work for Alibaba.
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high_desert
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28106818 - 12/21/22 03:21 AM (1 year, 1 month ago) |
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I thought I knew every options strategy out there but I ran across this 'synthetic short' strategy and I'm not 100% clear on the reasoning behind it. Basically it's supposed to be the closest thing you can get to short shares with an options spread.. It's two bearish options positions, one long put and one short call at same strike and expiration.
https://www.optionseducation.org/strategies/all-strategies/synthetic-short-stock
How is this closest to a short share position? Is the theory that the short call would nullify any IV issues you might experience with the long put? Why wouldn't you just use deep ITM long puts? I would think that anything you give up on IV would be nothing compared to the value of having capped potential losses.
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Hikeadellic
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: high_desert]
#28107341 - 12/21/22 12:39 PM (1 year, 1 month ago) |
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Because options are fun!
Its closest to a short share position because the net delta on that strategy would approach -1, but with the added bonus of it being in options. If the strategy is fully collateralized (which it should, especially if you are writing contracts), then you are generating income and hedging against the downside risk of your long stock position. You are avoiding the taxable event of selling your long stock. You are also avoiding using margin, which would be required to enter a short stock position. And you are avoiding the tax on buying to close the short. And you are also avoiding margin fees
If you are interested in capping potential losses you might want to look in to bear call and bull put credit spreads.
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high_desert
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Hikeadellic]
#28107892 - 12/21/22 07:40 PM (1 year, 1 month ago) |
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Quote:
Hikeadellic said: Because options are fun!
Its closest to a short share position because the net delta on that strategy would approach -1, but with the added bonus of it being in options. If the strategy is fully collateralized (which it should, especially if you are writing contracts), then you are generating income and hedging against the downside risk of your long stock position. You are avoiding the taxable event of selling your long stock. You are also avoiding using margin, which would be required to enter a short stock position. And you are avoiding the tax on buying to close the short. And you are also avoiding margin fees
If you are interested in capping potential losses you might want to look in to bear call and bull put credit spreads.
Dude no offense and I appreciate the response but you're not really getting the question. The question is NOT why use any kind of options versus a short share position. And really whether or not you're using this synthetic short as a hedge for a long share position and whether it's naked or not also doesn't matter.
The question is why use a long put/short call combo to synthesize a short share position rather than just buy -1 delta worth of long puts or just sell calls for that -1 level of exposure?
I did a little reading and saw some tutorials and there are actually some potential benefits to the long put/short call combo vs just all long puts or short calls. Apparently sometimes you can get a little net credit if you can sell the call for more than you pay for the put, you can start the trade with a small net credit and you still have the uncapped potential of the long put. You also have some pretty dynamic flexibility of taking off one of the contracts. Here's an explanation of this
I haven't found anyone saying this but I still theorize that the real reason this is closest to a short share position is because you end up neutral Vega.. As opposed to just using long puts where you'd benefit from higher volatility while just using short calls you'd benefit from lower volatility. Since Vega has no impact share positions this makes sense that to really replicate a short you'd want that long/short option combo to neutralize Vega effect.
Anyone looking into this kind of stuff be prepared for a rabbit hole. Synthetics are weird af and you can do all kinds of weird stuff like synthesize options spread positions with share/option combinations. Tom Sosnoff has a few videos on it but he doesn't go into why exactly the long put/short call is closer to a short share position than a more simple bearish option position.
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Hartford
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28108197 - 12/22/22 04:01 AM (1 year, 1 month ago) |
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Time to do the slide!
Edited by Hartford (12/22/22 04:40 AM)
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Hartford
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28123942 - 01/04/23 07:38 AM (1 year, 24 days ago) |
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The market seems to be telegraphing anther round of economic stimulus. Why else would the market be going up?
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: Hartford]
#28124035 - 01/04/23 08:55 AM (1 year, 24 days ago) |
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Market appears sluggish to me. We've been more or less trading sideways for the last couple of weeks, after the mid December pullback from the initial rejection at the S&P's 200 day moving average. MDY is the healthiest looking index overall, with all major averages coiling together. Seems like we need a little more work to do, but if we can squeeze a bit longer and push up and out, that would be encouraging.
On a historical basis, there is a high probability that 2023 is a good year with regard to returns, as anytime the S&P has lost more than 1% since WWII, the average return for the subsequent year has been 15% (this statistic was reported by FactSet and published on CNBC yesterday).
We'll see what happens. I'm trying to keep an open mind, but overall haven't felt very enthusiastic about buying.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28124341 - 01/04/23 01:05 PM (1 year, 24 days ago) |
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Gold is rocking today. I'm working on building an initial position in KGC, which is squeezing at all major moving averages and breaking out today. Leaving a little room to add in case we back test the cluster of moving averages, but I like the looks of this one right here right now.
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geokills
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Re: STOCKS - An Intro Tutorial & Ongoing Discussion [Re: geokills]
#28125569 - 01/05/23 10:35 AM (1 year, 23 days ago) |
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Adding heavy to KGC @ $4.39, via common shares as well as Feb $4 calls, as the stock attempts to push through VWAP after pulling back and holding yesterday's breakout low. Partial stop @ $4.36.
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