The Trump Tariffs thread

[SteveGrabowski]

I still don't fully understand puts or how they work. (options confuse the hell out of me)

So you enter into a contract for say QQQ to sell it at today's price within 90 days? And it's still your call whether you finally sell or not?

Like say QQQ today is 440.. but if it tanks to 330.. you can still sell it at 440?

Is that it?

A European put (it's the simplest put option) would be I buy the option to sell you N number of shares of some stock at price P at a time T from now, called the expiry time. I'm not obliged to sell it, I just have the option to do so. I pay you some amount today for the right to force you to buy at time T if I want. So if the stock drops to a price less than P at time T then I buy N shares at the current price and sell them to you at price P.

It's not like short selling which is where I'm so sure the stock goes down in price that I enter a contract to sell you N shares at time T for price P so no matter what happens to the stock price I'm selling you N shares at time T for price P even if the stock price at time T goes to say 2*P and I have to buy those N shares at twice the price I'm selling. So way more dangerous than a put option.

What's wild is if you make an incorrect assumption about markets which is approximately true when volatility isn't crazy you can hack options into risk-free* growth.

*risk-free until volatility gets high, then it's easy to go under from using that hedging strategy (see Long Term Capital Management after Russia's default)

 

[Abwx]

I still don't fully understand puts or how they work. (options confuse the hell out of me)

So you enter into a contract for say QQQ to sell it at today's price within 90 days? And it's still your call whether you finally sell or not?

Like say QQQ today is 440.. but if it tanks to 330.. you can still sell it at 440?

Is that it?

Basicaly puts are extremely leveraged short sells with a time limit, i wouldnt advise people buying puts or calls because there s no open market to re sell them, the only buyer of such options is the bank that sold them and they will never pay you the theorical intrinsical value, hence the risk is asymmetrical and on average it s the bank that make the profit while the buyer hold much of the risk.

 

[repoman0]

Basicaly puts are extremely leveraged short sells with a time limit, i wouldnt advise people buying puts or calls because there s no open market to re sell them, the only buyer of such options is the bank that sold them and they will never pay you the theorical intrinsical value, hence the risk is asymmetrical and on average it s the bank that make the profit while the buyer hold much of the risk.

There is absolutely a secondary market for options, and this is how most people trade them.

It sounds like most people here shouldn’t be messing with options. If you don’t have a deep understanding of how they work you are more likely to get burned than anything. Certainly shouldn’t be having friends trade them for you with no idea about the strike price or expiry date, JFC. That’s a huge tax nightmare too. Frankly they’re a tax nightmare even trading them properly in your own brokerage account.

 

[MomentsofSanity]

There is absolutely a secondary market for options, and this is how most people trade them.

It sounds like most people here shouldn’t be messing with options. If you don’t have a deep understanding of how they work you are more likely to get burned than anything. Certainly shouldn’t be having friends trade them for you with no idea about the strike price or expiry date, JFC. That’s a huge tax nightmare too. Frankly they’re a tax nightmare even trading them properly in your own brokerage account.

When I was dealing with US accounts/clients we had the ability to strip options from them if it was clear they had no idea what they were doing with them. I had someone fully approved for level 4 naked options who was asking me what a call and put was. Others yelling at me telling me covered calls were the riskiest trade they could do.....

If you have to ask anyone anything about options, you shouldn't be trading them. Period end of story. If you're approved above a level you fully understand, have them reduce it to one you do.

 

[QueBert]

Still seeing endless "this is exactly what I voted for!" posts from MAGAts. I'm utterly baffled at the undying support, how the fuck can this be what they voted for? Many are saying "he's doing exactly what he said he would"

I don't recall him ever saying he was gonna send this country into the shitter during his rally speeches. And the general MAGA consensus seems to be the stock market thing doesn't matter to them because stocks are a rich person's thing. So this doesn't affect the common man.

The MAGAs are dumb, but I see now they're dumb on a much deeper level than I could have ever imagined.

 

[nOOky]

Still seeing endless "this is exactly what I voted for!" posts from MAGAts. I'm utterly baffled at the undying support, how the fuck can this be what they voted for? Many are saying "he's doing exactly what he said he would"

I don't recall him ever saying he was gonna send this country into the shitter during his rally speeches. And the general MAGA consensus seems to be the stock market thing doesn't matter to them because stocks are a rich person's thing. So this doesn't affect the common man.

The MAGAs are dumb, but I see now they're dumb on a much deeper level than I could have ever imagined.

You don't understand, just trust the process and soon you'll have more money than you know what to do with. Everyone will literally have thousands of dollars just flooding into their bank accounts, and gas will be 49 cents a gallon, and everything will be made in America and the world will respect us again and clamor to be a part of the success.

 

[K1052]

Still seeing endless "this is exactly what I voted for!" posts from MAGAts. I'm utterly baffled at the undying support, how the fuck can this be what they voted for? Many are saying "he's doing exactly what he said he would"

I don't recall him ever saying he was gonna send this country into the shitter during his rally speeches. And the general MAGA consensus seems to be the stock market thing doesn't matter to them because stocks are a rich person's thing. So this doesn't affect the common man.

The MAGAs are dumb, but I see now they're dumb on a much deeper level than I could have ever imagined.

The stock crash is like when a volcano does a little eruption before the real one blows one entire face of the mountain off like St. Helens.

 

[Indus]

The stock crash is like when a volcano does a little eruption before the real one blows one entire face of the mountain off like St. Helens.

Funny and morbidly accurate how things went SIDEWAYS there too!

 

[Abwx]

There is absolutely a secondary market for options, and this is how most people trade them.

It sounds like most people here shouldn’t be messing with options. If you don’t have a deep understanding of how they work you are more likely to get burned than anything. Certainly shouldn’t be having friends trade them for you with no idea about the strike price or expiry date, JFC. That’s a huge tax nightmare too. Frankly they’re a tax nightmare even trading them properly in your own brokerage account.

The so called secondary market is still under control of the banks that sold the option because ultimately they are the ones who will close the deal at expiration, and the bank will undercut you anyway if they think that the price is good.

When in the money price wont increase by much and when out of the money it will decrease dramaticaly, that s the asymmetrical risk i was talking about, FI for a put that is neutral for the money if the subjacent price decrease by say 10% the put value will increase by 20% but if the subjacent increase by the same 10% the put value will collapse by 40%.

Anyway the few people i know who entered this scam market ended being burned to the bone, because you re playing cards with a banker who has aces in the sleeves.

 

[Muse]

Today's range is huge (~482 to ~523 on SPY). ~497 now. Where it ends (@4PM EDT) nobody knows. I sure don't.

 

[Exterous]

Yep and in the current environment he probably would not have made the order in the first place.

Right. And this kinda matches what I said in another thread about enterprise IT purchases. There's going to be a rush to complete a lot of orders now but after that a whole lotta people/companies are just not going to be spending $ anywhere

 

[misuspita]

Still seeing endless "this is exactly what I voted for!" posts from MAGAts. I'm utterly baffled at the undying support, how the fuck can this be what they voted for?

Are these real people? Because, I bet the bot farms are in full swing. There was a post somewhere these 2 days where Tweeter was found to be 80% bots or something. So those posts might not be real at all. Second option is, people are that level of stupid that until it hits them directly, they will eat the poison happily and completely oblivious

 

[K1052]

Right. And this kinda matches what I said in another thread about enterprise IT purchases. There's going to be a rush to complete a lot of orders now but after that a whole lotta people/companies are just not going to be spending $ anywhere

My husband trying to put together a capex budget illustrated:

 

[Indus]

Suuuuuuuuuuuurrrrrrrrrrrrrrrreeeeeeeeeeeeeeee...



When the time comes to make a choice.. MAGA will not abandon their fascism, their religious conservatism and their hate of others.. they will abandon democracy, they will abandon capitalism, they will abandon America, but never their beliefs.

 

[IronWing]

This is wild. Dow went from -1100 to +400 in less than 10 minutes. Total fucking chaos, lol.

Just another day ending in Trump.

 

[MrSquished]

The EU is sounding wishy washy, like a punch of wusses, probably giving the markets a little boost.

 

[K1052]

The EU is sounding wishy washy, like a punch of wusses, probably giving the markets a little boost.

It always takes them a bit to figure out their response. Retaliation for the metals tariffs just coming out today.

 

[K1052]

Or I guess they have now decided.

 

[misuspita]

It always takes them a bit to figure out their response. Retaliation for the metals tariffs just coming out today.

It's because we're 27 countries trying to give a unanimous response. While having Hungary and Slovakia on our sides... It sure takes a while, we're not a orange dictator dreaming at night what we will do the next day

 

[Wreckem]

Or I guess they have now decided.

View attachment 121601

That’s their response to the original auto/steel/aluminum tariffs…

They have also offered a zero tariff for zero tariff deal to the US but the Trump Admin shot it down so while the EU has said they are ready to negotiate it’s clear Trump isnt.

They only started meeting today to discuss how to handle the tariffs from last week. I’m not expecting them to agree to terms with the US unless the US moves of its ideal of reciprocal tariffs being based on trade imbalances and not tariffs.

 

[SteveGrabowski]

When the time comes to make a choice.. MAGA will not abandon their fascism, their religious conservatism and their hate of others.. they will abandon democracy, they will abandon capitalism, they will abandon America, but never their beliefs.

MAGA abandoning capitalism? So they're going to tell the billionaire ruling class fuck you, the workers own the factories now? Not holding my breath on that one.

 

[Indus]

MAGA abandoning capitalism? So they're going to tell the billionaire ruling class fuck you, the workers own the factories now? Not holding my breath on that one.

They already threw Elonia under the MAGA truck.. they just haven't gotten to the rest yet.

 

[cytg111]

MAGA abandoning capitalism? So they're going to tell the billionaire ruling class fuck you, the workers own the factories now? Not holding my breath on that one.

It would seem that they are in on it

 

[HomerJS]

Proof Trump intelligence is closer to 0 vs normal

 

[nakedfrog]

MAGA abandoning capitalism? So they're going to tell the billionaire ruling class fuck you, the workers own the factories now? Not holding my breath on that one.

I think more in the "let's do feudalism again!" way was the message, not switching to communism.