Buying deep OTM lottery tickets and sitting back to dream, hope and pray is not a viable strategy.
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Will the Fed pause on Tuesday?
- Thread starter Rearden Metal
- Start date
Buying deep OTM lottery tickets and sitting back to dream, hope and pray is not a viable strategy.
Quote from BrandNewTrader:
So far so good. I've made my first entry, plan on adding twice more. Once right before the Fed decision, hopefully they pause, the market ralies and I can make my final and largest entry when all of the puts are cheapest.
At that point it will be a waiting game. I'm long SPY puts expiring in 12/06, 03/07, 06/07, and 12/07. Strikes range from 105 down to 85...
Not interested in put spreads since I think SPY may fall as low as 65. Nothing to do after this but sit back and wait...
As a percentage of net worth how much do you have invested now?
How much do you plan on laying on the line?
Quote from Rearden Metal:
Your trading account is on a collision course with disaster.
No way. The market has nowhere to go but down. Any rallies will be on weak volume and unsustainable. Even in the miracle scenario that energy prices fall by 50% over the next 6 months, housing recovers magically, and inflation somehow "disappears", then I may only lose a % of my investment. But since I am long puts, the mkt would have to rise from its current levels and sustain itself at those higher valuations throughout 2007 for me to LOSE money. That's not happening.
The market has nowhere to go but down. I take it you think otherwise?
Quote from BrandNewTrader:
No way. The market has nowhere to go but down. Any rallies will be on weak volume and unsustainable. Even in the miracle scenario that energy prices fall by 50% over the next 6 months, housing recovers magically, and inflation somehow "disappears", then I may only lose a % of my investment. But since I am long puts, the mkt would have to rise from its current levels and sustain itself at those higher valuations throughout 2007 for me to LOSE money. That's not happening.
The market has nowhere to go but down. I take it you think otherwise?
when u are dead sure about somethin'....u know what happens, innit.
Quote from hans37:
As a percentage of net worth how much do you have invested now?
How much do you plan on laying on the line?
I've definitely invested a signficant portion of my net worth - I'd say 50%, and I plan on possibly investing more.
I would put down up to a 100k on this trade if I could. Unfortunately I'm young and haven't had the chance to amass savings... but I have good credit though ; )
Quote from BrandNewTrader:
I've definitely invested a signficant portion of my net worth - I'd say 50%, and I plan on possibly investing more.
I would put down up to a 100k on this trade if I could. Unfortunately I'm young and haven't had the chance to amass savings... but I have good credit though ; )
I think you would be better off spending the money on women of ill repute.
Quote from BrandNewTrader:
I've definitely invested a signficant portion of my net worth - I'd say 50%, and I plan on possibly investing more.
I would put down up to a 100k on this trade if I could. Unfortunately I'm young and haven't had the chance to amass savings... but I have good credit though ; )
me thinks u havent been tradin' for long; u are not after real odds but chasin' massive standard deviation one-in-a-lifetime-events. on a note, all these kinda trades that have been taken on this board have ended up disasterously.
Quote from Rearden Metal:
Buying deep OTM lottery tickets and sitting back to dream, hope and pray is not a viable strategy.
Agreed. But what if you knew which store was selling the lottery tickets. Wouldn't that improve your odds? If so, would you be willing to spend thousands of dollars to purchase all of the lottery tickets in that store? This is what I'm doing. Unless someone can show evidence that we are in fact in a bull market correction and not coming off a bull market top (in May), then I will continue to maintain that the ebar mrket has already started and we are heading into a recession that will be signaled by depressed equity markets, with strong possibility of a large sigma event.
Buying long-dated OTM puts based on 6 months of fundamental and technical research can be considered a viable strategy. The amount I choose to invest in this trade is a function of the probability I associate with my market view and my tolerance for risk. Is it not up to each of us how we choose to risk/money manage? Aren't there situatins in which mechanical traders choose to "override" their system with their own judgement? The fact is, any money I DON'T put into this trade is potential profitability that I'm leaving on the table.
Trading is an individual endeavour is it not? I'm willing to bet the farm on this. If I lose, I'll still be an over-educated middle class trader with no lack of employment and income opportunities.
If I'm right I make over a half million dollars. Possibly much more in the event the recession is as deep and protracted as it looks to be shaping up to be.
Every trader dreams of the trade that he sees coming before everyone else. I'm surprised that no one else can see this coming, even the fundamental arguments I have presented in other forums have failed to even sway.
Oh well? I chalk it up to Panglossian optimisim. That's why it's a market...
Quote from Bitstream:
me thinks u havent been tradin' for long; u are not after real odds but chasin' massive standard deviation one-in-a-lifetime-events. on a note, all these kinda trades that have been taken on this board have ended up disasterously.
What tipped you off?
His screen name or his panglossian optimism for a long shot to win.