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I don't think this is true. BS assumes an "upward drift" using the risk free rate in the market. It has to do this because the long stock holder is assumed to have to earn at least the risk free rate of return to want to hold the stock to begin with. The BS formula therefore follows random...

Well Said. It's akin to the broken window fallacy. To a bureaucrat, they think if they break a perfectly good window it will stimulate demand now to fix it when it reality all they are doing is distorting the market for those resources. I would say though that by fixing up the inner cities...

What people like S2007S have a hard time understanding is that there are two ways markets can correct; through price and through TIME. We DID have a correction, but it was a time correction. Those are often more painful as neither the shorts get the lower prices they want and the longs don't...

If we had not traded sideways for 18 months I would definitely have had a harder time believing in the upside. But the technician in me knows that when you start to break out from an 18 month sideways base...that move has legs.

Yes but you can't call that no risk. You would have taken 30% haircuts in your account on those moves. How is that NO risk? No risk is a CD or cash. Taking a 30% hit for most of us is unacceptable. If I take even a 10% hit in my account I rethink what the hell I'm even doing in this...

What are you talking about? The first sign of a downtick everyone panics and talks about the end of the world. You are living on another planet. Here is the issue. This market is now and has been for some time extremely over hedged. The avg person is not even making that much money because...

I don't understand this concept of no risk. There is an uptrend but there is variance around that trend. That variance will wreak havoc if one has excess margin. If one is not using margin then one won't make much. Fyi many of the big techs got slaughtered since the election. How is that no...

The highest open interest on the call side is the Dec 95 calls, the highest strike available.

I definitely think the upside fly is the best way to play it. Also, count on a strong fade after a positive pop.

Top-line data is expected from two of Ophthotech Corp (NASDAQ: OPHT)'s pivotal Phase III trials in the next month. Leading into the catalyst, which could take the stock either way, Stifel analyst Stephen Willey maintains a Buy rating and $75 price target on the stock, representing about 135...

Wow, so there is a $100 to $120 tgt if approval and $7 if no approval. There is your answer. And Steve Cohen is a buyer...hmm.

When is the news coming out? Obviously before these Dec16s expire. The best way to trade these is with flys.

Under a lognormal distribution the call side has a far fatter tail therefore the skew cheapens the call spread. The easy way to back of the napkin price skew is to look at the 1 x 2 ratios. As skews get fatter, the ratio spreads go into credit.

Not ACD related but had to post this. This can't go smoothly. https://www.bloomberg.com/news/articles/2016-12-08/pimco-co-founder-bill-gross-s-wife-files-for-divorce

Inflation? In what? California weed prices? LOL. The 1% we have been seeing in CPI is not going to change those numbers much. LOL.

http://thereformedbroker.com/2016/10/13/when-did-the-bull-market-begin-irl/ The actual starting point of the current secular bull market is the spring of 2013, when we broke above the double-top record highs of 2000 and 2007. This means we’re only into the third year. I also would like to...

That's not how it works Einstein. The definitions of bull and bear markets have been well established in Finance since the days of Jesse Livermore. Don't pull stuff out of your ass.

You are using the wrong metrics. Tell me where earnings where in 1998. We were at 1500 in 1998, that was 18 years ago!!! Today we are at 2242. That means equity prices are only up 50% in 18 years!!!! That's only 2.3% a year compounded for 18 years. I suspect earnings are up a lot more then...

Just recovering back to the highs is not a bull market. The move from the 2008 lows back to 1500 was a "recovery", not a bull market. We didn't make new highs till 2013. That is when the bull market started. Not the crisis lows.

Natty!