It's August 10th 2017 and I am long delta.......

S

STD Deviant

.... and scared.

Anybody else? :confused:

I love this volatility... 2 days ago. Yesterday's dip triggered Bull Puts for me and I felt like a genius coming into the close. Today I found myself putting more on at "better and better prices". Futures look calm. Is she done throwing up for now?

SD
 
Triggered bull puts? How do bull puts get triggered? You mean we dropped through the strike? That's the risk you take as a seller.

If you're scared, why do you put more on?? The risk is still there, likely increasing over the weekend... since most planned events actually tend to happen in the weekend, since markets are closed and there's more time to evaluate...
 
Triggered meaning my trading system told me to go long. I don't pay a lot of attention to news, I'm mostly mechanical. I think my position size is okay, but another 1%+ drop on Friday is gonna sting. Minimizing your losses during tail events is what separates the men from the boys does it not? *fingers crossed*
 
Historically, multi-year bull markets don't just turn on a dime one day into bear markets - there is usually a topping process that takes several months.

I wouldn't be shocked to see a quick 5-10% correction over next few weeks/month but if you are afraid that the market is about to drop 40%, I think those fears are way overblown (assuming no nuclear war)...I think that 2500 round number on the s&p is still in play - just might take a bit longer to get there. Just my opinion, not investment advice.
 
Mother of pearl. It was only one day. What happens, not if, but when the 1% turns into 5%, 10%, 20%? Can you stomach that? If not, you have to re-evaluate your size.

I'm not saying this is the top. But there will be a correction of a large magnitude some time in the future and you have to be comfortable with that possibility.
 
This drop doesn't have much to do with TA. Further escalation doesn't mean -40% but a 5% drop is definitely a possibility. If you're scared of just another 1 or 2% (which is nothing really)... that means you're not comfortable with your position and should exit or at least reduce it...
 
Good day so far. Market seems to be digesting yesterday's bad burrito. Good point about uncomfortability and position size. All my trades have defined risk and while I would be very unhappy to suffer complete losses (very unlikely), I would certainly live to trade another day down maybe 10% overall.

This morning I closed out an Aug 18 BP that had moved into the money yesterday and was hovering around my mental stop of -2x credit received. I still have two Aug 18 BP's on with short strikes at 2425 and 2415. If everything stays calm and we don't start puking again within the next couple of days, I'll close out my bullish position, which was put on before and during the "Big Crash of Aug 2017" with a decent profit.

I'm no Warren Buffet groupie, but his mantra of "Be fearful when others are greedy, and be greedy when others are fearful." was helpful here.
 
STD Deviant said:
I'm no Warren Buffet groupie, but his mantra of "Be fearful when others are greedy, and be greedy when others are fearful." was helpful here.
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But isn't everyone still greedy? Sure it dropped on NK news, but everyone keeps saying we are in a long term bull market still. Everyone is expecting the buy the dip to work one more time.

I think its very difficult to gauge who is greedy and fearful.
 
Gotcha said:
But isn't everyone still greedy? Sure it dropped on NK news, but everyone keeps saying we are in a long term bull market still. Everyone is expecting the buy the dip to work one more time.

I think its very difficult to gauge who is greedy and fearful.
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I heard a guy once say something along the lines of, "when your plumbers and electricians are talking like they are stock market geniuses, we are in a bubble". Being in a bubble is also a time of "greed". 2008 would be a time of fear.

Warren was heavily invested after 2008-09 and has probably been lightening his load every year since then. It's pretty much how pawn shops work; they buy from people who are hurting obtaining a huge discount. If you have a massive load of cash and balls the size of grapefruits, this strategy works extremely well in the stock market.
 
Except if you're buying Enron, or Snapchat, or Blue Apron, or.....

Perhaps before Lehman Brothers was liquidated they could have seen if anyone wants to get in at a really good price???

The point I'm making is that I think its very difficult to gauge what is a good buy and what isn't. Buffet made lots of his money in insurance companies. Not only are they hurting with low interest rates, they also say the autonomous cars will required people to have much less insurance. So when insurance companies are cheap, do you buy, will they recover?

Its never so easy except in hindsight.
 
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