Investments Trade Log

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jacob
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Re: Investments Trade Log

Post by jacob »

I have a bunch of short calls expiring OTM on Friday, but I'm not touching the options market as long as I'm not getting real/realistic market quotes. I don't have my own pricing calculator(*) and I'm sure as shit not going to use Black-Scholes in this environment which requires a full scale special "panic"-edition of the ivol surface.

(*) I usually just send limit orders to the midprice. There's often a hidden order sitting there already.

PS: Even if the means are the same, our ends are likely not. I don't use options for income. I use them for insurance and so consider the profit made coverage (or what the word is) for being long in the high-risk (overvalued) market of a couple of months ago.

Seppia
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Re: Investments Trade Log

Post by Seppia »

@jacob: Europe, in contrast, is back to valuations not seen since 2012.

Frugalchicos
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Re: Investments Trade Log

Post by Frugalchicos »

Can't decide if keeping the cash or investing another 15K in the coming month or 2...Will wait to see how the US deals with the COV19

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@Frugalchicos

That is enough to sell 1 cash-covered put on any blue-chip stock that is trading between $0 - $150. Take your pick and set a price at a 20-25% discount :) Can make money while you're waiting and potentially get yourself into a long position on something you might want to hold for a while. Consider Boeing....I'd sell the $100 put myself when I get the chance.

@Jacob

Mid-point is where I learned to set my limits as well. Maybe it helps that I'm not buying or selling that many contracts so its easier and quicker to get in / get out. I'd imagine if one was trying to trade hundreds or thousands of contracts, they would have to play this a little differently.


Digging through my notes...decided to write down what I'm going to do about my gain on INDA. Remembered that some backtesting shows that theta decay on long options increases exponentially after 21 days. Subtracted my expiry date from 21 and decided to bail out March 27. Because I think INDA can drop further, I'll just wait until March 27 anyhow and as long as I'm still below the $26 strike price, I'm profiting regardless. Or if implied volatility somehow falls? But in this environment...I don't think that is gonna happen. It might not even matter because I've intrinsic value built in from the underlying below my strike price.

As well.....if my thesis is still the same [INDA must go down] I could always buy another put at a later date (concept called 'rolling options').

Its good to write down the strategy...I've a paper held up on a bulletin board. Need to remove emotion whenever possible.

Edit: Second thoughts are telling me to take the 80% or so gain....Maybe I just need to play this by day but I definitely need to discover a profit taking strategy.

classical_Liberal
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Re: Investments Trade Log

Post by classical_Liberal »

jacob wrote:
Mon Mar 16, 2020 3:27 pm
Weirdly, we (the US) has only just about touched the bottom of the December 2018 dip.
For another perspective, adjusted for inflation, the US is back to early 2015. Heck, the S&P isn't that far from 2000 level prices during the dot-com bubble high when earnings were half. So measuring points matter.

I agree we have a ways to go though. A friend of mine who works at an old school small town brokaged is telling me everyone's wanting to buy. This seems the same in the FIRE boards and bogleheads. When I start seeing these people changing their tune we might be getting close. I still doubt we will see CAPE stay below the 20 mark for too long though, at least until we have some new, sustained (multiple quarters) low earnings to justify it.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Discussion here has shifted from wanting to buy in to get a good deal around the -20% point, to talk of shorting and how this could go on for a while longer. Meanwhile we set another new "worst since 1987" day yesterday and market pessimism is back to extremes after the nice ending Friday. That all sounds (at least short-term) bullish to me! Maybe this time we will actually have two or more days in a row of gains.

bigato
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Re: Investments Trade Log

Post by bigato »

As the markets try to climb a bit, I sold all my etfs, believing that we will see further drops and that Brazil’s in particular will be steep

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Sold my INDA put and took a 37% gain. With the market popping up this morning the gains I was looking at were cut in half. Decided to roll down into the next strike:

INDA 05/01/2020 P $25.00. 10 Contracts @ $2.70. Breakeven is $22.3 at expiry.

ertyu
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Re: Investments Trade Log

Post by ertyu »

@bigato: I tend to agree. The USA isn't at the "blood on the streets" / piles of grannies in body bags stage yet. Give it a month, we should see at least another 10% drop - though the QE that's starting might throw a spanner in the -50% drop I need (waiting for SPY 170 here as I solemnly swore that at SPY around 170 and around 25 JAFI I'm pulling the plug)

bigato
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Re: Investments Trade Log

Post by bigato »

Yeah, good luck to us. Boots on the ground, I share your view on the impact on third world countries, mine in particular.

thedollar
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Re: Investments Trade Log

Post by thedollar »

Boeing went from 440 to 113. Pretty interesting but I guess customers will be hard to come around the next few months...

IlliniDave
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Re: Investments Trade Log

Post by IlliniDave »

I didn't take action Monday, the first down 7-8% or more day I stayed idle. No reason other than I checked in the morning and much of the opening losses had been pared, then didn't get a chance to check again in the afternoon so I missed it.

For the first time since 2016 some of my new contributions/savings (half) is going to stocks (sorry if I already mentioned that above). Overall I'm holding. What I've decided to do is use SP500 down > 45% YTD to trigger a significant rebalance to bring me up to par with my desired AA. As long as it doesn't get there I'll continue with small incremental bond->stock shifts so my AA doesn't drift too far off target. I don't feel like we've seen the bottom of this.

ETA We're pretty close to where the SP500 was when I began incrementally selling stock exposure. If I can buy most of what I sold back for less than the late 2016 price and we don't see a permanent worldwide tanking, I'll consider it a small victory and it will be easier to wait years for my total balances to recover, if it takes that long.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Due to the melt-up before this crash & the extreme speed of the crash, we're still not even close to having a 200-day moving average & 50-day moving average Death Cross.

I imagine this crash will cause many rules-based trend-followers to abandon their discipline if they didn't exit in time, or at least try and modify their rules to react more quickly in the future. This could lead to them underperforming in the future, for example if there are a lot of whipsaws during bull markets. On the other hand, because we may never see this extremely fast melt-up to bear market crash again, other trend-following systems (which have performed poorly here) may outperform in the future, especially if their popularity wanes.

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Bankai
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Re: Investments Trade Log

Post by Bankai »

The trend-following will be fantastic again once the new bull market starts. This meltdown is also a great reminder of why stop loss (or some kind of exit strategy) is so important - something the buy and hold forever/buy quality and never sell etc. group constantly argues against.

thedollar
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Re: Investments Trade Log

Post by thedollar »

thedollar wrote:
Fri Mar 13, 2020 5:47 am
For the log: Did a similar thing today.
S&P500 at around 2,400 now. Bought $26k worth of global equities today. 25 x BA at around $100. Around $3,000 worth of FLSmidth.

Should S&P500 reach 2,000 I'll be mobilizing a large amount of cash. Time horisont: I'm never selling anything.

Lucky C
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Re: Investments Trade Log

Post by Lucky C »

Lucky C wrote:
Tue Mar 17, 2020 4:08 am
Maybe this time we will actually have two or more days in a row of gains.
Nope!

Looks like we just hit another -7% limit down.

DJIA now negative over Trump's presidency.

At this rate, next month you'll be able to pick up a barrel of oil at Dollar Tree.

black_son_of_gray
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Re: Investments Trade Log

Post by black_son_of_gray »

black_son_of_gray wrote:
Fri Mar 06, 2020 12:48 pm
Woke up to see that TLT had popped up 5% overnight :shock: , so I sold half of my shares to lock that in.
I stopped out of the rest of my TLT early this morning before it tanked precipitously. These bond/treasury moves are frankly scary. I'm glad I'm out and I'm staying out.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

Sold my INDA Put again. Started with $2k...now at $3.5k. Made $1.5k since last Friday on just put options. Psychologically, as soon as I see a gain north of 20% , I end up selling and bailing.

Betting tomorrow will be a bump....considering SPY Put if I see that.

slowtraveler
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Re: Investments Trade Log

Post by slowtraveler »

Sold my gold today. Kept some Wellesley. Buying indexes mostly and some of the good stuff that's on sale-GOOG, DEO, DIS.

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Lemur
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Re: Investments Trade Log

Post by Lemur »

@slowtraveler

Starting to see some bullish sentiment...so many great deals right now on blue chips. Think i will quit the long put game right now and start hoarding cash for a potential turnaround. Not 100% sure but I definitely wanna keep selling puts while IV is so high.

Who m I kidding though...if I see a pump tomorrow, then Ford puts it is.

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