Board 8 > Stock Topic 30

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masterplum
06/16/21 7:46:49 PM
#451:


red sox 777 posted...
Just look at the long term chart for SQQQ. This is one of the worst investments ever dreamed up.

I was like, but I bet it made money in March 2020 though!

Not really then either. This is horrific stock to ever touch

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red sox 777
06/16/21 7:54:12 PM
#452:


masterplum posted...
I was like, but I bet it made money in March 2020 though!

Not really then either. This is horrific stock to ever touch

Looks like it made money in February 2020 and actually lost a bit in March 2020. I guess that's because of the extreme volatility that month. A -14% day followed by a +10% day for QQQ loses money for SQQQ. And there were quite a few big green days in March 2020, in addition to the big red days.

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Zachnorn
06/16/21 8:16:32 PM
#453:


red sox 777 posted...
Shorts tend to lose money on average, but the thing about levered ETFs like SQQQ is that there's an additional problem generated by the goal of matching daily percentage returns and the mathematics of multiplying percentages. Like, if QQQ drops 10% today and rises 10% tomorrow, it doesn't get back to even - it'll still be down 1%. But, SQQQ would have fallen 30% the first day and risen 30% the second day - and it's still down 9%. Much worse than the 3% you'd expect! Over time, these losses are brutal.

How hedge funds use shorts is typically to increase their leverage. Like, if they have $100, they'll invest $300 long and $200 short. This is 5x leverage, but they'll argue that there are only really exposed 100% on the long side because the shorts act to hedge the longs. Of course the hedges don't always work because they aren't in the actual same stocks - they might, say, buy Ford and short GM. In January this strategy blew up on a lot of funds when their short stocks mostly soared and their long stocks fell.
Makes sense. But again for SQQQ specifically, isn't the best strategy for using it, if you're really confident that QQQ will fall, is to buy it early (in the premarket, let's say) and then sell it a few hours later? At least, I wouldn't hold SQQQ past a market close, personally.

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greengravy294
06/16/21 8:59:31 PM
#454:


SQQQ (or any equivalent) isn't an investment. It dies over time. Long interest always beats short interest, in general. And an interest measures that "general".

I mentioned SQQQ simply because inflation concerns are correlated to tech stocks. Shrug.


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red sox 777
06/16/21 9:39:01 PM
#455:


Zachnorn posted...
Makes sense. But again for SQQQ specifically, isn't the best strategy for using it, if you're really confident that QQQ will fall, is to buy it early (in the premarket, let's say) and then sell it a few hours later? At least, I wouldn't hold SQQQ past a market close, personally.

The best strategy for SQQQ is to not buy it at all. Or short it potentially, depending on the interest rates for doing that (but my guess is they'll be pretty darn high). If you're confident that QQQ will fall I'd rather buy QQQ puts.

But honestly, there are thousands of stocks on the market, and it should be possible to find some to bet on going up. Betting on stocks going down is a really hard game. You need a tremendous amount of skill just to break even. While anyone can buy SPY and do much better than breaking even with more or less no skill at all.

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Zachnorn
06/17/21 10:18:19 AM
#456:


Shorting is definitely not a game I'd want to play. Especially with the anti-shorting sentiment. I can see why the likes of AMC and GME were shorted heavily and why it was seen as such a sure thing; that is, until WSB changed things.

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greengravy294
06/17/21 10:32:45 AM
#457:


Looks like it's tech rotation time

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Sunroof
06/17/21 11:04:08 AM
#458:


greengravy294 posted...
Looks like it's tech rotation time

Could be. Financial and retail stocks are down big.
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Menji
06/17/21 11:14:05 AM
#459:


Menji posted...
Might only stock up today is NET, so close to breaking $100

Nice

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CoolCly
06/17/21 11:31:39 AM
#460:


CoolCly posted...
Last time NET made it to $87, i considered selling but didn't and it plummeted to $66. It made it back to $89 now and I sold

So lets see how hindsight treats me - will it plummet again and vindicate me or will it keep running and I'll feel like a sucker?


selling was such a blunder!!

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Sunroof
06/17/21 12:31:52 PM
#461:


Juneteenth just got passed as a federal holiday. Market might be closed?
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red sox 777
06/17/21 12:41:10 PM
#462:


VGAC changed into ME today. Nice to see a nice 9% bump with the ticker change.

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Lopen
06/17/21 1:12:40 PM
#463:


Sunroof posted...
Juneteenth just got passed as a federal holiday. Market might be closed?

Doubt it. Too many options expiring tomorrow.

Maybe next year.

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Zachnorn
06/17/21 1:14:33 PM
#464:


I don't think they can close the markets that quickly. It's my understanding that the NYSE sets the holidays pretty far in advance. They have holidays announced through 2023.
https://www.nyse.com/markets/hours-calendars

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Lopen
06/17/21 1:27:19 PM
#465:


Zachnorn posted...
I don't think they can close the markets that quickly. It's my understanding that the NYSE sets the holidays pretty far in advance. They have holidays announced through 2023.
https://www.nyse.com/markets/hours-calendars

Right and that's all based on options right now, since options can currently be purchased through 2023

An option having even one less day of active market on it means people are losing value for their options so no one would allow that

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Zachnorn
06/17/21 1:29:42 PM
#466:


So we probably won't see Juneteenth being a holiday in the market until 2024 at least, I'd assume.

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Sunroof
06/17/21 1:37:25 PM
#467:


Very interesting behind-the-scenes mechanics.
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Lopen
06/17/21 1:56:06 PM
#468:


Zachnorn posted...
So we probably won't see Juneteenth being a holiday in the market until 2024 at least, I'd assume.

I believe the furthest options we see currently are June 16th 2023 so it's actually possible for June 19th 2023 to be a holiday. But I'm not positive on that. Also not sure if they just make 2023 set in stone once the year is announced or not.

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Jakyl25
06/17/21 6:23:43 PM
#469:


There have been unpredicted off days for the market before though right? Like the days immediately following 9/11. How were things handled then?
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red sox 777
06/17/21 6:29:34 PM
#470:


I don't believe that the market taking an unexpected day off would affect options contracts in a legal sense. You would still be able to exercise the option even if the market is closed.

As the optionholder, you do not have a right to sell the option. You do not have a right to exercise and immediately resell the stock. What you have as a matter of right is just to exercise and get the stock.

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Sunroof
06/18/21 9:41:26 AM
#471:


Wow. Bloody massacre.
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Zachnorn
06/18/21 10:01:52 AM
#472:


ow my portfolio

But maybe a good buying day?

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Sunroof
06/18/21 10:12:53 AM
#473:


I think another recession is here. Everyone should sell everything and sit out for a few weeks/months.
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Zachnorn
06/18/21 10:17:23 AM
#474:


What makes you say that? Isn't the economy supposed to be booming?

The stock market isn't the economy. The stock market has been known to drop after good unemployment numbers come out because more employed people increases inflation.

From what I'm seeing, the market is reacting to increasing inflation and potential interest rate increases, which occur when the economy is improving.

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red sox 777
06/18/21 2:05:46 PM
#475:


Seems like a buying opportunity to me.

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Sunroof
06/18/21 2:07:07 PM
#476:


I dont even know whats good at this point.
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Lopen
06/18/21 2:18:55 PM
#477:


You could always buy some calls in British Petroleum

$28c 8/20 looking pretty good right now.

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Sunroof
06/18/21 2:32:02 PM
#478:


The past few months have shown me they options plays arent worthwhile.
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Lopen
06/18/21 2:34:56 PM
#479:


When you enter the land of options, only the strong survive

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red sox 777
06/18/21 2:38:55 PM
#480:


I still think that options are not good for Moonroof psychologically. He's a short term plunger as is, he doesn't need things that move even faster.

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Lopen
06/18/21 2:40:20 PM
#481:


I think if he sold calls aggressively but vowed to not open his app until they expire he could make a ton of money

Big if though!

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Sunroof
06/18/21 2:40:47 PM
#482:


Options are incredibly slow. So slow that you are forced to wait until Fridays to be ridden from them.
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Sunroof
06/18/21 2:41:35 PM
#483:


Selling calls only nets you approximately 1% of what you put in of premium.
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Sunroof
06/18/21 2:43:23 PM
#484:


What does selling calls aggressively entail? How can you be aggressive when you must wait for them to expire?
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Lopen
06/18/21 2:52:18 PM
#485:


Be aggressive with the price. Sell very close to at the money, 1 week out. Do not buy them back.

1% every week is good if you're putting in 100k. That's $4000 a month for basically doing nothing.

Obviously some of your stocks will go down in that time. That is okay, you hold those. and wait for them to come back up

Diversify between a lot of fairly safe stocks (ones you personally don't think will go down), sell calls on all of them, constantly. They won't unilaterally go down.

You're not going to become a millionaire that way but you'll make a lot of easy money.

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Sunroof
06/18/21 2:54:22 PM
#486:


I was doing that for a bit but was getting aggravated when the stocks I was picking were going up like 5% in one week.
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Lopen
06/18/21 2:57:34 PM
#487:


If they go up you should just take the win and let the option expire.

Every pick isn't going to go up.

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Sunroof
06/18/21 3:00:49 PM
#488:


True. GS is dropping a lot. Maybe that one.
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Lopen
06/18/21 3:04:23 PM
#489:


The key is you buy the shares when it goes down.

If you expect the bounce you don't sell the call then, you wait for it to bounce.

Then sell the call when it's going up. If you just sell the call immediately when it's below the level you think it's at, then it rebounds 5%, you do make less.

This only really applies if you're buying a stock that is dipping though. If you're buying a stock that is kinda flat or going up, selling ASAP is better.

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Forceful_Dragon
06/18/21 3:24:19 PM
#490:


Sunroof posted...
I was doing that

From what I could see in the topics you were picking ONE stock you deemed safe and making that your ONE play for the week.

Pick 10 (or more). Split your money into 10 chunks and sell calls on all 10 of them.

And hey, maybe you were doing that, but that certainly isn't how it came across in the topic. It seemed as though you picked a single horse for the week and then loaded up with as many options of the one stock as you could afford.

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Sunroof
06/18/21 3:26:18 PM
#491:


Yes, I picked only two. I stand by that method.
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Sunroof
06/18/21 3:28:56 PM
#492:


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Forceful_Dragon
06/18/21 3:29:11 PM
#493:


Yeah, that change in approach completely undermines the safety of the strategy.

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