ebay/twtr will probably deliver growthless numbers next week.
Well, the one thing I was fighting simon on (KBE long), is the one thing that has turned out so far. I woke up this moring thinking perhaps nonsense is the new normal. You know… overpriced equites… just get used to it? I originally was thinking that this rally was about panicked buyers buying a market they did not believe in just because it was going up and they could capture some yield for the year before they beat everyone to the sell off. However, I’m wondering if the “planned sell off” is not really part of the picture. As someone who is caught up in the macro picture I had forgotten about dividends. Are dividens are that last yield everyone is grabbing for? Makes sense. With pressure on rates and the cost of debt coming from every direction, even if a company is struggling, the temptation and ability to borrow to pay dividends is high.
All that being said… why are ebay and twtr (no dividend) up with everything else? Maybe my original thinking was at least somewhat correct.
Anyone else been checking prices on OTM SPX put options during this bull-market frenzy? I like to get things I want cheap, when nobody else what’s it.
It costs some money, but could buy cash-settled SPX puts @ 1800, expiring end of 2018! That allows you to go all-in “buy the dip” for the next 2 1/2 years, with a saftey net in place. Also allows years of selling puts down at 1900-ish to potentially establish a position.
Ran some models, it seems like a huge chunk up-front lost, but actually in most scenarios you come out ahead. The big loser scenario is if the market is “up up and away”, with no more downward spikes, which of course I think is unlikely. All other scenarios at least break-even with years of putselling and buy-the-dip. Hmmm dunno. Still thinking this thru.
Aren’t you short enough PA!! But yea, going long premium is a good idea right now. Because IV is so low the time decay is minimal. I’m thinking about breaking down and buying calls. I figure if were to get a sell off, the spike in IV will be a natural hedge… not to mention, delta works in your favor as a second hedge when you are long. Of course, if we keep going up at least I can put a partial smile on my face.
Hehe, Mr. Skeptic “short enough”, never! I’m pretty much market-neutral right now. I do like being bullish during these market shocks we’ve been seeing, for example if it shocks down this year I’ll close out my shorts, and would like to go levered-long, BUT don’t like the tail risk. Owning OTM puts would give me 2yr immunity, and allow me to be a irresponsible dip-buying douche. How fun! 
Looked at calls, but I probably should have bought them when the market was down if I wanted them.
not necessarily… they would have been expensive then (high IV). I am definitly interested in calls if we get a orderly mild mannered pull back. Can’t do it at this level without complely negating any chance my orignial position has of delivering some profit.
Wish I had a margin account to grab some puts at these levels, certainly some volitility ahead and at all time highs would be great to have some protection
you only need a few hundred bucks to pick up some puts???
I trade with robinhood as I dont have much equity. Have a TD account but dont have anything in it anymore so alas no options for me
A single SPX dec2018 1800 put costs $13,500! Biggie-sized to keep dummy retail investors out, but not me LOL!
I often filter out the abrasive delivery of your arguments because I find value in considering an iconoclastic point of view. However, you can be a bit of an a-hole, yes? I would like to stick up for those who successful trade their own money for a living. It’s freaking hard! I really don’t think you meant to imply that retail investors don’t have the potential to be smarter that the “smart money”. I’m sure you would agree that the unencombered nature of the independant trader could house the creativity needed to spot what the big money cannot. I believe you mentioned something along the lines of the academics and pros don’t always have the flexibility of mind to make the best calls… with all due respect, I’m sure you just forgot that for a minute
I’ve noticed that! I disguise smart stuff in a translucent bag of stupidity, to see who is paying attention. 
It was a bit of a joke, since I am a retail investor!
Up late modeling scenarios in Excel like a nerd. Hmm I still like these 2018 puts. Recessions, bear markets, they eventually happen. Can’t put them off forever, not even with the central bankers working overtime. Laying this trap now, this late in the bull run, with Brexit talks taking 2 years, possible Trump presidency and declarations of war/default/whatever – makes sense to me.
^my bad… misunderstanding! Thanks for the clairity.
So I took a look at those SPX 2018 puts (1800 strike). Quoting the ask price you would pay $14,310 (of course probably would get a more like a mid bid/ask price). Here is my concern… Look at the December 2017 prices for the same strike. The ask is $8,310. I take this as a warning that your could lose about half your investment/ year while waiting for the world to fall apart. Am I reading into that right? Careful, man!
EDIT I just remembered you said something about writing puts against the position… ok, potentially that could recollect the premium you would be leaking. It would take up a lot more capital to do that…but ok.
Thank you pumpkin.
Boring or not but a 20% return to give someone the right to own my position for 15% higher price than maket 5 months from now is much sexier.
Oh and it is a contrarian trade.
You can spin it however you want. The bottom line is you have net long exposure in an underlying that is trending up. If you are a contrarian on gold mining, your short call isn’t going to save you from the trend reversal you would be betting on. If gold miners crash, you are going down with them.
But… since you called me Pumpkin, I’ll let you call it whatever you want
Right, I looked at both 2017 and 2018. I always assume I will lose my FULL investment the moment the trade button is pressed, option payments are instant 100% loss in my mind. Anyhow, I’m now protected against any downturn out to 2018! It’s an asset, and trades can be made against it, so the full loss of premium won’t ever actually happen. Either partial loss, or a gain (a single “buy the dip” over the next 2.5yrs at S&P=1950, and a sell at 2150 is a $21K gain ($7.5K net of option cost), without having to worry about a crash below 1800).
Update: holy cow, this might be called a “diagonal bear put spread”, LOL that makes it sound so smart!
yall still good?
Yea… I’m REALLY glad I defined my risk/ reward up front. This was an ill timed trade and will probably lose. (although, if we do retace to 2090 in the next few weeks, I could still make a 71% return ) I’m at the point in my trading education that I’m learning it is always better to be late to a party than early for one that might not even happen. Next time I want to fade nonsense I’m going to wait for others to show up first to confirm the party is happening. (I’m going trust the charts!)