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And here is what Mr. Buffet thinks of the airline business: At the recent Berkshire Hathaway annual meeting, Buffett responded negatively when asked a question about airline investing. “Investors have poured their money into airlines and airline manufacturers for 100 years with terrible...

I would have to agree with this. I believe Carl Icahn said owning an airline was the easiest way for one to rid themselves of their wealth (he bought TWA in the mid 1980's).

This is true to a point. I think a lot of travelers don't realize that you pay a tax every time you touch down at an airport. For example, if you don't fly round trip and you have a connecting flight at Ohara from JFK on to San Diego. You will pay a tax to land in Chicago and San Diego. And...

You are a smart guy so I don't need to tell you this. But there are a lot of moving parts here and you are skipping over a lot of them to over simplify this. Why don't you start here...

Are we looking at the same thing? I've attached the open interest for both and the SPX looks to be about 10 times as liquid. This is for this week's expiry.

Are you sure they were there before? When products are not liquid and this is certainly one, you want to have fewer strikes to concentrate liquidity. The reason the 1/4's have strikes is because historically that is where the liquidity is. To be honest, I don't know why they even list 10...

https://fred.stlouisfed.org/ The first two charts were just from google. Not always the best thing to do so I went straight to the real data at the St. Louis Fed.

And here is the CPI data for airfare data from 2011 to the present. Looks like a downtrend to me.

Don't make the mistake of confusing oil prices with jet fuel prices. Jet fuel is only marginally cheaper then in 2007. I've attached the price chart of gulf coast jet fuel from jan 2007. In 2007 it was about 1.60 and most recently 1.49 on 10/9 in the chart.

Prices are not much higher then 2007 and in some cases lower. Flying is route dependent. Some flights are cheaper, some are more expensive.

Airfares have been steadily declining for the last 40 years.

Sorry guys...the convexity commentary will have to wait for next weekend. I'm knee deep in re-building some models for the coming week. Thanks i960 for posting the above chart.

It's traded out to a 1.50 to 1.75. I would say at these prices the expected spike would be .50 to .75 at an extreme. Don't look at it like a trading range. The spread is an option with slow decay. It's value will eventually trade to the marginal cost of storage in march which will be...

Yeah dude, I've been posting for 14 years. I'm just buying time waiting to make my first constructive post. I'll be sure to post a "Breaking News" thread the second I do. Let me ask you an honest question. Do you feel your "thread title" was appropriate given this "new" information you have...

I'm going to quote your EXACT words in quotes. My comments will be below unquoted. "Exciting times if you were waiting for a correction." So you are implying this is a correction. Yet we are flat on the day. "The sharp move that was to come after the 5 week triangle has confirmed to the...

So explain this to me Einstein, why would you cover your short market position if a support level breaks? That is complete nonsense. You even titled the thread: BREAKING NEWS: First the triangle broke, now the support broke

Dude, you were short the market and you "covered". Bear ETF's are short the mkt last time I checked or so it says in my Market 101 book.

Dammit! There goes my football viewing schedule. :)

No. Term structure itself is rather binary.

Wait. So you started a thread saying the selloff is now just beginning because support broke and you "covered" your shorts? LOL. Seriously? Only on ET.