You are using an out of date browser. It may not display this or other websites correctly.
You should upgrade or use an alternative browser.
You should upgrade or use an alternative browser.
Forget about S&P 1000
- Thread starter B. Rowshan
- Start date
- Status
- Not open for further replies.
Some comments: I agree with the above poster who partially quoted Keynes--the market can remain irrational longer than you can remain solvent!
The SPX could indeed reach 1000 in January. I checked the option deltas on the SPX and they are running at 11 which means there is about a 1 in 10 chance of reaching 1000. The option deltas for 850 are running at 13 so that probability is slightly better but also unlikely. What is really unlikely is that the market will touch both of those points in the January expiration period-which brings me to my second point.
The normal January expiration is on January 16 at the close for SPY and at the "SET" that morning for SPX. Although there are weekly options which expire next week, there aren't any options listed for Jan 23 at my broker yet.
My last comment is that puts and calls can be both used if your market sentiment is up. Selling puts is bullish just like buying calls is. If your market sentiment is down you can sell calls or buy puts. The profiles and performance will be similar depending on which strikes you choose and whether you use spreads or not.
The SPX could indeed reach 1000 in January. I checked the option deltas on the SPX and they are running at 11 which means there is about a 1 in 10 chance of reaching 1000. The option deltas for 850 are running at 13 so that probability is slightly better but also unlikely. What is really unlikely is that the market will touch both of those points in the January expiration period-which brings me to my second point.
The normal January expiration is on January 16 at the close for SPY and at the "SET" that morning for SPX. Although there are weekly options which expire next week, there aren't any options listed for Jan 23 at my broker yet.
My last comment is that puts and calls can be both used if your market sentiment is up. Selling puts is bullish just like buying calls is. If your market sentiment is down you can sell calls or buy puts. The profiles and performance will be similar depending on which strikes you choose and whether you use spreads or not.
Quote from B. Rowshan:
Well they are so full of premium it's hard to go long puts.
And if you are looking to sell puts you will be put out of business sooner or later.
VIX is at 39, lets not be mirror view like here(to keep looking at the 'old world' to measure value). 30 is the new 20, I think volatility is getting cheap at these levels
I agree that volatility is cheap here. So what is your strategy based on this ?Quote from Daal:
VIX is at 39, lets not be mirror view like here(to keep looking at the 'old world' to measure value). 30 is the new 20, I think volatility is getting cheap at these levels
Going long a straddle could very well be a losing strategy even if volatility expands.
Quote from B. Rowshan:
I agree that volatility is cheap here. So what is your strategy based on this ?
Going long a straddle could very well be a losing strategy even if volatility expands.
I'm inclined to buy SP500 puts here since historical analysis suggests the initial low gets tested the vast majority of the time(86%). The big problem is which month, hard to predict how long the market will remain irrational
I agree that there will be a rollover and that the lows will be tested. Trouble is, if you don't have excellent timing buying puts to capitalize on the retest, there is a good probability you will lose $$. So we agree it's very hard to buy puts and profit.Quote from Daal:
I'm inclined to buy SP500 puts here since historical analysis suggests the initial low gets tested the vast majority of the time(86%). The big problem is which month, hard to predict how long the market will remain irrational
If price drops and volatility expands, that long straddle would return 10%-15% in just a few days, no? If you're wrong and price runs up in the next few days, you still have a chance to make a small profit or at least break even. Sounds like a decent strategy to me.Quote from B. Rowshan:
I agree that volatility is cheap here. So what is your strategy based on this ?
Going long a straddle could very well be a losing strategy even if volatility expands.
I've never gone long a put so i'm wouldn't know.Quote from 4444CJones4444:
If price drops and volatility expands, that long straddle would return 10%-15% in just a few days, no?
If you go long premium, making 10% and 15% is not enough to cover the losses when you don't catch the move exactly.
If we roll over and test the lows, and right now it is still a big if, it will likely come if and when there is a realization that the $1T stimulus had a far smaller impact than expected maybe by late summer or the fall. I would not be shorting in front of the feeding frenzy that Washington is generating.
- Status
- Not open for further replies.