Kudos to MMs

nitro · Mar 2, 2009

Buffet may be understating loses from selling SPX puts.

http://www.dailyspeculations.com/wordpress/?p=3612

GTS · Mar 2, 2009

Quote from nitro:

Buffet may be understating loses from selling SPX puts.

http://www.dailyspeculations.com/wordpress/?p=3612

"Apparently Warren Buffett only took a 200 million writedown on the puts he sold betting that the price of the S&P would be above, whereas he pays off if below."

Versus:

http://online.wsj.com/article/SB123575572935295811.html
"Separately, Berkshire took a loss of $5.1 billion in the fourth quarter on several derivatives contracts entered into in recent years."

shortie · Mar 2, 2009

Quote from nitro:

I have stated elsewhere that imo the market's version of the conservation of energy can be violated for extended periods of time. [I mean analogous to the Quantum theory version in the link below]

http://en.wikipedia.org/wiki/Conservation_of_energy

Another possibility is that I am in a similar position to that of Antoine Lavoisier when he was trying to prove that matter is neither created nor destroyed, but his early theory did not take into account all forms that matter could take. Analogously, I may be missing a variable that added to the FV/ES system, would show a complete conservation relation. "Market energy" is escaping somewhere I do not take into account. For example, maybe the equation is 0 = "FV" - ES + VIX^(FractalDimension(SPX)), in which case "fear" is the missing variable.

http://en.wikipedia.org/wiki/Antoine_Lavoisier

That is proprietary.

could this situation be analogous to a chemical reaction when the activation energy is high? so, even though the reaction is favorable by the energy differentials between point A and point B (your FV diff), the activation energy is too high at the moment for the reaction to take place.

http://en.wikipedia.org/wiki/Activation_energy

kinggyppo · Mar 2, 2009

Quote from nitro:

682 ish SPX next support. ES trading well below "FV", but you don't buy new breaks of bear market lows at anything but the most disciplined price.

if you input the model without the financials what do you get ballpark? I hope its more than 650, looks like C may go to .50 a share!

riskfreetrading · Mar 3, 2009

Quote from nitro:

I have stated elsewhere that imo the market's version of the conservation of energy can be violated for extended periods of time. [I mean analogous to the Quantum theory version in the link below]

http://en.wikipedia.org/wiki/Conservation_of_energy

Another possibility is that I am in a similar position to that of Antoine Lavoisier when he was trying to prove that matter is neither created nor destroyed, but his early theory did not take into account all forms that matter could take. Analogously, I may be missing a variable that added to the FV/ES system, would show a complete conservation relation. "Market energy" is escaping somewhere I do not take into account. For example, maybe the equation is 0 = "FV" - ES + VIX^(FractalDimension(SPX)), in which case "fear" is the missing variable.

http://en.wikipedia.org/wiki/Antoine_Lavoisier

That is proprietary.

You are missing gravity and its effects, and also the solid ground, which can create discontinuities in speed when the ball hits it. In other words you are missing shock waves among other things. Do not reason in a continous and closed world. As for the energy that disappears: it does not. It takes the form of energy swallowing shares from men holding bags to men with deep pockets, intellect or both. The former are known as bagholders. The latter are smart money.

riskfreetrading · Mar 3, 2009

Quote from kinggyppo:

if you input the model without the financials what do you get ballpark? I hope its more than 650, looks like C may go to .50 a share!

If you are shorting financials, get out while you can. Smart money with canes is in town. They are looking for shares.

kinggyppo · Mar 3, 2009

Quote from riskfreetrading:

If you are shorting financials, get out while you can. Smart money with canes is in town. They are looking for shares.

What are you basing this on? current price action is giving a new low every day, I am scaling in but am I gonna be buying the SP @ 450 first?

nitro · Mar 4, 2009

I am sorry I cannot answer the interesting questions above. I will later.

Looks like people have moved past GE cratering and going to $5. I don't know if they have moved past it going to $2.50 though. The APR $2.50 puts are .13 bid with a ~ 210 vol.

In any case, at least for now, GE getting whacked and market decent up is encouraging.

richardm · Mar 4, 2009

hey kinggyppo, read the posts carefully, if you notice, most of these are automated bullcrap posts. Just fragmented sentences and one of the reasons I do not mess with these forums unless I have to. They will fill up your inbox with reply notices also. There is probably some idiot monitoring for when he gets a response so he can jump in with manually typed responses saying no that is not true, but watch long enough and you will see it turns to babble again and that the so-called technical analysis is crap statistics rehashed.

riskfreetrading · Mar 4, 2009

Quote from kinggyppo:

What are you basing this on? current price action is giving a new low every day, I am scaling in but am I gonna be buying the SP @ 450 first?

Do you still need an answer from me after today's market action?