Exactly, that's why I want to start tracking it. I'm sure it'll be useful for me in a year or so, not today.
SPY going to $260?
- Thread starter nooby_mcnoob
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Exactly, that's why I want to start tracking it. I'm sure it'll be useful for me in a year or so, not today.
I have been getting lazy.... but if you want to expand your 'sentiment portfolio'.... I'd look into farming social media...
at some point I want to look into that more extensively..
Great idea, will probably do this at some point.
Why would you want to sell puts if you are bearish ?
Because I want to go long at $260. I realized this is a dumb way to do it though I have a couple of similar trades open right now using this idea so I will wait to see how those turn out.
Buffet is in the insurance business. You have enough insurance to meet claims until you don't.
For example, if I was assigned on my positions, I would need $X. I have 2*$X in cash. So why is this a problem. I wouldn't try this AND make it harder on myself for now.
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IF it cant stay aboVe 50 dma; look out BELOW. I think it will retest 52 week lows + 52 week highs, but dont have an opinion when that will happen, this year. Pre---------lelection years tend to be super strong.
. I wouldn't go so far as to say it's a problem... if you're holding way more than enough in cash. It's just not optimal. In a binary comparison of selling $260 puts vs. a resting order of the same size at $260.. you are right that the former scenario will be superior in PnL at the end of it all.
However, we aren't limited to those two choices. If your thesis is any good, you would want to gain on the rise in vol and the drop in spot price. Or instead of selling puts today, just wait until spot is $260 and sell the same expiration & strike you were going to. You'll make more that way.
Most people are just commenting that your stated thesis doesn't synchronize with your proposed position. Traders are always on a quest for efficient use of capital.. in this case if you're right you will eat a lot of unrealized losses over the trade duration, and forfeit the gains you could have had from waiting to sell the same puts later. If you're wrong it's a marginal gain from selling far OTM. Different positions would give a much better trade profile for this thesis.
However, we aren't limited to those two choices. If your thesis is any good, you would want to gain on the rise in vol and the drop in spot price. Or instead of selling puts today, just wait until spot is $260 and sell the same expiration & strike you were going to. You'll make more that way.
Most people are just commenting that your stated thesis doesn't synchronize with your proposed position. Traders are always on a quest for efficient use of capital.. in this case if you're right you will eat a lot of unrealized losses over the trade duration, and forfeit the gains you could have had from waiting to sell the same puts later. If you're wrong it's a marginal gain from selling far OTM. Different positions would give a much better trade profile for this thesis.
Very clear explanation, thanks! You make a good point about waiting until spot is $260, very good point.