S&P Limit Down Within 5 Minutes of Open

[Zhong Lu + 845]

Futures closed now.  

0 trust among market participants.  God knows how many leveraged funds are about to blow up.

I don't think we're stopping at 2000. Next target is 1800, then 1500s.  I can't f-ing believe my prediction came true this early.  

Edited March 22, 2020 by Zhong Lu

[Zhong Lu + 845]

Might short the VIX after markets open.  Still thinking.  Probably not a good idea.  Currently all cash. Should have held onto short, but not trading well.  

Edited March 22, 2020 by Zhong Lu

[TooSteep + 142]

Hello. What's your take on the VLCC market right now. It seems that old boats being taken offline to be used as floating storage to play the contango, shrinking the fleet. Current fixings are more than $150,000/day. How long can that strong VLCC demand last with oil demand collapsing? These guys appear to be printing money for now, but any idea how it will play out over say 2-3 months of collapsed oil demand?

[Barney2210 + 2]

16 minutes ago, TooSteep said:

Hello. What's your take on the VLCC market right now. It seems that old boats being taken offline to be used as floating storage to play the contango, shrinking the fleet. Current fixings are more than $150,000/day. How long can that strong VLCC demand last with oil demand collapsing? These guys appear to be printing money for now, but any idea how it will play out over say 2-3 months of collapsed oil demand?

 

[Barney2210 + 2]

The demand will explode. If everything is full and nowhere to sell it, rates will go up if current contract expires. 

[Zhong Lu + 845]

No idea.  I trade ETFs.

[George8944 + 128]

5 hours ago, Zhong Lu said:

Might short the VIX after markets open.

My suggestion is trade the VXX, not the VIX.  The VXX is more liquid (more shares traded) so you will have a smaller spread between bid and ask.  Another fine point is the VXX is an ETN and not a ETF.  This means it only tracks the underlying issue.  The VIXY actually has to buy the underlying futures so the VXX is slighly more true in its market tracking.  Liquidity is the bigger thing as I'm learning.

With that said,  I'm short 300 shares of the VIXY  (do as I say, not as I do) because I got busy in my day job and didn't catch the markets move against my option position.  Someone exercised the option I sold.  Still scratching my balls trying to decide a good damage limiting move. I thought I would be out on Friday.  The market came within 5 cents of my limit price and then suddenly changed directions.  @#$@#$@#   I would have gladly conceded the $15 ( 300 x .05 ) to have been out.  Again, I have a day job and can't be ever watchful.

[0R0 + 6,251]

1 hour ago, George8944 said:

My suggestion is trade the VXX, not the VIX.  The VXX is more liquid (more shares traded) so you will have a smaller spread between bid and ask.  Another fine point is the VXX is an ETN and not a ETF.  This means it only tracks the underlying issue.  The VIXY actually has to buy the underlying futures so the VXX is slighly more true in its market tracking.  Liquidity is the bigger thing as I'm learning.

With that said,  I'm short 300 shares of the VIXY  (do as I say, not as I do) because I got busy in my day job and didn't catch the markets move against my option position.  Someone exercised the option I sold.  Still scratching my balls trying to decide a good damage limiting move. I thought I would be out on Friday.  The market came within 5 cents of my limit price and then suddenly changed directions.  @#$@#$@#   I would have gladly conceded the $15 ( 300 x .05 ) to have been out.  Again, I have a day job and can't be ever watchful.

Perhaps you should be trading things that have longer trades than a matchstick timeframe.

[surrept33 + 609]

1 hour ago, George8944 said:

My suggestion is trade the VXX, not the VIX.  The VXX is more liquid (more shares traded) so you will have a smaller spread between bid and ask.  Another fine point is the VXX is an ETN and not a ETF.  This means it only tracks the underlying issue.  The VIXY actually has to buy the underlying futures so the VXX is slighly more true in its market tracking.  Liquidity is the bigger thing as I'm learning.

With that said,  I'm short 300 shares of the VIXY  (do as I say, not as I do) because I got busy in my day job and didn't catch the markets move against my option position.  Someone exercised the option I sold.  Still scratching my balls trying to decide a good damage limiting move. I thought I would be out on Friday.  The market came within 5 cents of my limit price and then suddenly changed directions.  @#$@#$@#   I would have gladly conceded the $15 ( 300 x .05 ) to have been out.  Again, I have a day job and can't be ever watchful.

 

Just be careful about ETNs, especially volatility ETNs:

https://www.rcmalternatives.com/2018/02/why-did-xiv-implode/

[TooSteep + 142]

I believe the data tells us that peak virus happens in about 3 weeks, with a clear R0<1 within 5 weeks. 

https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56

There should be some confidence in this prediction, with awareness starting to slowly build up this week, as people watch Italy's chart unfold:

https://www.worldometers.info/coronavirus/country/italy/

The market is a forward looking beast, and it has just been injected with hundreds of billions of dollars of play money. I am expecting the bear market rally to be violent to the upside.

The Russell 2000 saw the worst of it on the way down. Hence, I bought a large position in URTY this morning.

Highly, highly risky, and all bets are off if Italy's death count climbs. This is not a trade for the faint of heart.

But I love asymmetrical trades. I'm expecting to sell it in the $50's in the coming weeks, but prepared to be stopped out at $10 (or worse!) in the next day or two if I am wrong.

 

 

[0R0 + 6,251]

4 hours ago, TooSteep said:

I believe the data tells us that peak virus happens in about 3 weeks, with a clear R0<1 within 5 weeks. 

https://medium.com/@tomaspueyo/coronavirus-the-hammer-and-the-dance-be9337092b56

There should be some confidence in this prediction, with awareness starting to slowly build up this week, as people watch Italy's chart unfold:

https://www.worldometers.info/coronavirus/country/italy/

The market is a forward looking beast, and it has just been injected with hundreds of billions of dollars of play money. I am expecting the bear market rally to be violent to the upside.

The Russell 2000 saw the worst of it on the way down. Hence, I bought a large position in URTY this morning.

Highly, highly risky, and all bets are off if Italy's death count climbs. This is not a trade for the faint of heart.

But I love asymmetrical trades. I'm expecting to sell it in the $50's in the coming weeks, but prepared to be stopped out at $10 (or worse!) in the next day or two if I am wrong.

 

 

Italy new cases are down for a third day.

Italy has under reporting due to deaths at home not being tested, and over reporting because of deaths from other causes being reported as CV19 deaths. The reporting procedure asks whether the deceased tested positive for CV19 rather than if they died from it. 

[George8944 + 128]

20 hours ago, surrept33 said:

ust be careful about ETNs, especially volatility ETNs:

https://www.rcmalternatives.com/2018/02/why-did-xiv-implode/

Thanks for posting.  That's an excellent article.   There is a big difference between the XIV and the VXX, besides the direction it wil move relative to the VIX.   As I mentioned, an ETF like the XIV actually holds positions needed to meet it's stated objective.  The VXX is an ETN and works more like a bond.  The ETN provider promises a certain return based on an investment if held until maturity, just like a bond.  And just like a bond, the value goes up and down to match market expectations until expiration.   The VXX trades on the markets expectation of where the VIX will be in 30 days.   The XIV, besides being an inverse ETF, MUST match reality every single day by buying or selling more of the underlying shares.   The article explains what can happen.

I very much liked the article.  I will read it again before I have two classes of Merlot.   Your sage advice, to "be careful" is very applicable in playing the futures or their derivatives.   To limit my risk, my option contracts rarely exceed 2% of my portfolio.  No stock is more than 5%.

BTW - I managed to clear my short VIXY (an ETF)  position today.   After including all the option positions and fees, I exited plus $24.  Definately, not my intention but I'm very pleased over all.  I wasn't caught by market volatility.  I took my eye off the difference between my strike price and the underlying VIXY price.  The option got exerciesed.  Stupid is as stupid does!

[George8944 + 128]

21 hours ago, 0R0 said:

Perhaps you should be trading things that have longer trades than a matchstick timeframe.

In normal times I have a diversified portfolio across the spectrum of expected hold times. Given my real age, not my baby looks, Most I what I had was very long holds, so your comment is right on the money.  Right now I am mostly in cash.  I started seriously playing options last April when I simply couldn't find any more stocks that got me excited.  I got bored and wanted to spice up my life. I begam wondering about how to increase my income beyond dividends during retirement.  I began by hedging what I owned and like all drug addicts, I graduated to more lethal and exciting forms of pleasure.

The option contracts I buy usually expire in 30-60 days, however once I hit my dollar target I sell.  My average hold time so far this month is 9.1 calendar days.  Including my VIXY fiasco which I closed out completely today for a whopping $24,  I am up $3400. 

Until I start seeing a bottom in this market,  options are my only play.  I'm a math nerd and options is mostly statistics, probabiliy and the grace of God.  I screen for the options with the highest volatility rank (not percent), most open interest and a very specific spread (it's a probability thing).   No option play is more than 2% of my portfolio and most are well under 1%.   

Hold a matchstick long enough and you will get burned!

[TooSteep + 142]

22 hours ago, TooSteep said:

There should be some confidence in this prediction, with awareness starting to slowly build up this week, as people watch Italy's chart unfold:

https://www.worldometers.info/coronavirus/country/italy/

The market is a forward looking beast, and it has just been injected with hundreds of billions of dollars of play money. I am expecting the bear market rally to be violent to the upside.

The Russell 2000 saw the worst of it on the way down. Hence, I bought a large position in URTY this morning.

Got lucky with my timing. Have a 36% buffer now, can move the stop up and wait.

When a GP treats 300 patients with hydroychloroquine + z-PAC + zinc, and 0 of them require hospitalization, intubation or a pine box, that is no longer a statistically insignificant sample. I am betting the worst of this is over.

[J.mo + 165]

Anyone have an explanation for the massive move up today?

[TooSteep + 142]

Massive move up? Stimulus

I closed out my URTY speculation this morning. Can't get greedy, 55% in 3 days is solid. Original plan was to ride it to $50, but in the current virus panic, I can't see that happening just yet. Not enough good news, and the Italy death toll rose yesterday. I suspect it is due to an increase in southern cases, I cannot find the Lombardy numbers by themselves. I feel like this is going to be a big problem with tracking the curve across countries, unless the whole country locks down together. The US looks like it is going to be a rolling nightmare of hotspots for a while.