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Post by theMist on Jan 11, 2017 22:42:00 GMT -5
Watching futures. Im looking for that swan dive. Lol.
The move will come, just have to be patient. Like Jack said, they're sucking in all the peeps then pull plug. Lol
Probably waiting for that very "special" inauguration day. Lmao
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Post by walnut on Jan 11, 2017 22:50:58 GMT -5
Maybe but that's kind of far away. Wouldn't want to be long the scams for that long if it came to it
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Post by walnut on Jan 11, 2017 22:53:41 GMT -5
Man I wish we could find a way to hedge a short position in the scams that worked.
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Post by theMist on Jan 11, 2017 22:57:16 GMT -5
Maybe but that's kind of far away. Wouldn't want to be long the scams for that long if it came to it Agree. VXX could still hit 20-21. But I want selloff now in S&P because I want this to be short term selloff and then look to reshort scams just above gap fill (averaging in slowly). If market keeps pressing higher and doesn't pullback now then will be very difficult to retime short entry as scams could press back up against upper BBS and triple spike hard. I like shooting fish in a barrel.
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Post by theMist on Jan 11, 2017 23:01:07 GMT -5
Man I wish we could find a way to hedge a short position in the scams that worked. That would solve all our problems
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Post by theMist on Jan 11, 2017 23:06:45 GMT -5
Liking the move in futures so far. How about a black swan dive courtesy of China?! lol
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Post by walnut on Jan 11, 2017 23:28:13 GMT -5
What if you bought the VXX, and sold the at the money 1 week calls. sell the VXX for 21.5 and sell the 21.5 call for .54 cents. Do that every week. Then after a bounce you will still be ahead for a few days due to delta being less than 1.0 until expiration so you could get out with a little profit. After a VIX spike you can just re-short the scams and ride back down.
The question is, will the scams drop more than the 9% income in a month? lately, maybe so. Ordinarily, not quite. about 5% on average.
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Post by theMist on Jan 11, 2017 23:35:55 GMT -5
Looking for a way to let short vix scam ride all the time and have hedged. If you don't time the spike right I think we have a problem. How much time do you think would have to flip trade ?
Sounds like a good hedge for me now. Lol
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Post by walnut on Jan 11, 2017 23:38:08 GMT -5
Well this sure won't work right now, contango loss is 84 cents over that period haha What if you bought the VXX, and sold the at the money 1 week calls. sell the VXX for 21.5 and sell the 21.5 call for .54 cents. Do that every week. Then after a bounce you will still be ahead for a few days due to delta being less than 1.0 until expiration so you could get out with a little profit. After a VIX spike you can just re-short the scams and ride back down. The question is, will the scams drop more than the 9% income in a month? lately, maybe so. Ordinarily, not quite. about 5% on average.
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Post by theMist on Jan 11, 2017 23:41:02 GMT -5
Talk to you tomorrow. Very tired
I'll leave it up to you regarding hedging. I'm a newbie compared to you.
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Post by theMist on Jan 11, 2017 23:57:15 GMT -5
Posting real quick then going to bed - response from our friend - not sure if he is on right track
I don't disagree with much of anything your friend is saying, he did misinterpret a couple things and that is my fault. When I said 2 x the price, I meant a strike price 2 x the price that the ETF is currently trading at. When I said in the money, what I mean is roughly one strike price in the money from where the ETF is trading at. So lets say It is Friday, UVXY is trading at $7.00, I own a March $15 call (which cost $0.5) and I had a $7.5 call I sold last week which is currently trading at $0.01. I buy back that call and sell a $6.5 call for next week, which would be trading for roughly $0.65.
This can be repeated week to week since UVXY continually heads down, other than temporary spikes. Since I own a call and and short a call, the margin required is the difference between the strike prices. Even on a spike I can roll the short call week to week (with a premium each week) until March. At that time I need to do something else. If I took the trade off and decided to lick my wounds it would cost me roughly $8.5, since I would be short a March $6.5 call and long a $15 call. The Greek wouldn't matter on that day.
What I would probably do in march is send both to April. At that time the premium on the $15 call that I buy would be higher than the premium on the $6.5. I need to live through one of these experiences in order to see how damaging that premium would be. Which is why I am just experimenting right now.
I also own put calendars in UVXY which are deep in the money (lets say $15). During a spike the near term put (I am short) is wiped out, and all I have left is the long dated put. Once the short put is wiped out I let UVXY ride down to where it was before the price spike and then spread it by selling an at the money put with the same expiration as the long put. If the spike never happens, I roll the put week to week. It's biggest weakness is a prolonged period of no volatility spikes, this is where my call strategy comes in, since that is where the call strategy performs the best. It's a lot of fun and is still mostly an experiment at this time. It costs hardly anything to put on these put calendars. It would cost about $1.5 to put on a June one right now. You can roll at a premium every 2 weeks or so. And you just wait for the spike.
One thing I forgot to mention is that the only reason I am experimenting with the call strategy is just to counteract the losses from the put strategy. As long as I can make this not lose money in between Volatility spikes, I will have achieved my goal
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Post by huh on Jan 12, 2017 0:12:03 GMT -5
The real threat to S&P futures bulls here is the potential double-top forming, downside ~2180, confirms <2228. If that happens, then expect a bounce from 2180 to 2212-2215 to form the RS of a much larger H&S, its downside target ~2080. And all of that would be only the prelude to a bear market.
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Post by walnut on Jan 12, 2017 8:29:14 GMT -5
I will look this over probably over the weekend and see if I can figure out exactly what he is trying to do. In fairness I have never yet quite been sure I knew what his strategy really was, I just saw those two fundamental options mistakes that I mentioned. Let me look it over again, if I can be sure what he is doing I will know whether I think it might work or not. Posting real quick then going to bed - response from our friend - not sure if he is on right track I don't disagree with much of anything your friend is saying, he did misinterpret a couple things and that is my fault. When I said 2 x the price, I meant a strike price 2 x the price that the ETF is currently trading at. When I said in the money, what I mean is roughly one strike price in the money from where the ETF is trading at. So lets say It is Friday, UVXY is trading at $7.00, I own a March $15 call (which cost $0.5) and I had a $7.5 call I sold last week which is currently trading at $0.01. I buy back that call and sell a $6.5 call for next week, which would be trading for roughly $0.65. This can be repeated week to week since UVXY continually heads down, other than temporary spikes. Since I own a call and and short a call, the margin required is the difference between the strike prices. Even on a spike I can roll the short call week to week (with a premium each week) until March. At that time I need to do something else. If I took the trade off and decided to lick my wounds it would cost me roughly $8.5, since I would be short a March $6.5 call and long a $15 call. The Greek wouldn't matter on that day. What I would probably do in march is send both to April. At that time the premium on the $15 call that I buy would be higher than the premium on the $6.5. I need to live through one of these experiences in order to see how damaging that premium would be. Which is why I am just experimenting right now. I also own put calendars in UVXY which are deep in the money (lets say $15). During a spike the near term put (I am short) is wiped out, and all I have left is the long dated put. Once the short put is wiped out I let UVXY ride down to where it was before the price spike and then spread it by selling an at the money put with the same expiration as the long put. If the spike never happens, I roll the put week to week. It's biggest weakness is a prolonged period of no volatility spikes, this is where my call strategy comes in, since that is where the call strategy performs the best. It's a lot of fun and is still mostly an experiment at this time. It costs hardly anything to put on these put calendars. It would cost about $1.5 to put on a June one right now. You can roll at a premium every 2 weeks or so. And you just wait for the spike. One thing I forgot to mention is that the only reason I am experimenting with the call strategy is just to counteract the losses from the put strategy. As long as I can make this not lose money in between Volatility spikes, I will have achieved my goal
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