It stops trading for lunch (11:30 to 13:00 local time).
I want to put a bit into Pacific shares to rebalance. But I'm sticking this out until things settle.
I don't understand the logic behind that play. If the index drops below 1500 by more than what you got on the option premium, you're kinda screwed. Selling a put option if you're short makes sense since you'd be hedged. But selling a naked put is pretty dangerous - even if it means a drop of 25% in the index.Then sell the January 20, 2017 150 puts. for every 15,000 dollars to secure the purchase of 100 shares of SPY you get 510 dollars (minus 10.75 in commission)
Your yield on that cash if you never get put stock = 3.4% which is better than a 1 year CD for the year
and if you do get stock put to your account, you outperformed every hedge fund in america & the S&P 500 for the next 12 months.
I don't understand the logic behind that play. If the index drops below 1500 by more than what you got on the option premium, you're kinda screwed. Selling a put option if you're short makes sense since you'd be hedged. But selling a naked put is pretty dangerous - even if it means a drop of 25% in the index.
Did you not read what the guy said. He is waiting till the S&P hits 1500 before he buys in.
So #1 you can wait and watch your money lose 2% of its purchasing power for it to hit 1500 before buying.
or #2 if you are willing to buy in at 1500 then sell 1 put and make sure you have 15,000 dollars to pay for 100 shares of stock put to your account at the price you wanted to buy anyways. but you pay less since your cost basis is lower due to the premium collected.
So why not at least collect a premium while you wait for the price of SPY to reach the price you are willing to buy in at?
And if you want you can go long a put farther down to create a Collar by using some of the premium to buy some insurance.
It's all a function of time. If he's solid it will get there anytime soon, he'd be a fool to sell the lower implied volatility and smaller out of the money premium right now, as decay for an option a year out is slow and falling markets in the meantime would increase implied volatility. He'd also be limiting his upside to $500 per option should he sell the put now and possibly not be able to sell more later, which would be a disaster for someone predicting such a market decline and only be able to reap maximum $500 out of it when it happens (and minus any 'protection' you're suggesting as well, such as buying a lower put, which would be more popular and pricey, should it be more in play at that time.)
(Not that I'm suggesting buying puts now either, to bet on a move to 1500. )
He is not solid it will get there,he does not think it will get there but if it did he would buy.
So the choice is never buy stock, sit on cash and take the 2% erosion in purchasing power or at least sell the put one year out. He obviously cannot predict the price tommorrow or next week.
So his choice is to wait and have the cash sit there, or at least get paid to wait. Either he gets stock or he does not get stock.
EIA said 8 million crude inventory build, gasoline build too but distillates down. Let's rally.
And Russia said they'd be willing to talk to OPEC. What did the Saudis and Iranians say? No idea, but let's rally.
So your remedy to avoid sitting on cash is to sell puts? lol
The biggest reason people don't buy after a crash is because they bought before one or only slightly into it. Either case, I'd never suggest to someone to sell puts as a source of income to potentially beat the expected return of a cd at historically low rates unless you are someone who can actively manage an option portfolio and who knows how to value them, hedge them, create spreads, and simply know the p&l graphs of positions at given strikes and with changing conditions. If you meet that criteria, then rock it out, and in general you'll probably make lots of money (due to selling their high implied volatility and that betting on a crash is usually the wrong thing to do, since the market usually spends more time going up than down and that crashes are few and far between.)
Rally? After the Fed minutes it dropped.
I was talking about oil prices that somehow managed to go up today. They are insanely low already but somehow not dropping lower despite a massive oversupply that hasn't changed for..... over a year now.
Actually for every buyer there is a seller. Lol.Actually most people buy at tops and sell at bottoms.
So what would be your advice to the Person who would like to buy SPY only if it gets to 150 but does not really think it will get there. They have the cash to do so in the brokerage account to buy 100 shares and they are willing to wait 12 months. They are not a day trader or active trader.
Actually most people buy at tops and sell at bottoms.
So what would be your advice to the Person who would like to buy SPY only if it gets to 150 but does not really think it will get there. They have the cash to do so in the brokerage account to buy 100 shares and they are willing to wait 12 months. They are not a day trader or active trader.
What is a good fund (low cost of ownership) fund which tracks the price of oil?
I hear a lot of people mention QQQ. Is it a good (low cost of ownership) to have?
qqq tracks tech.
don't know of any low cost oil funds.
I use dwti if i want to short oil
All the short/long oil tracking ETFs I know are leveraged 2 or 3 times. Shame because the decay risk is big. If there were a true straight crude oil long, I'd buy.