Is the stock market going to tank?

[jacob_dbu]

Already been 2 days for TLRY which is far outpacing its merger partner APHA. I'm long APHA. Short TLRY via calls. Anticipate adding more tomorrow short. Will likely cover my 50P TLRY to take a profit

What is overall short interest in TLRY? Do you have any worry that it might get squeezed again? I saw it got squeezed right after IPO, but I have no idea on what fundamentals/context that all happened.

[Brock Landers]

Sorry, are we supposed to still be discussing whether the market will tank or not?


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It’s just a nuanced and fairly deep part of a general market thread. I know how we got there, just crazy seeing how the discussion worked it’s way to the greeks and their practical, actual use.

[retirwntm]

It’s just a nuanced and fairly deep part of a general market thread. I know how we got there, just crazy seeing how the discussion worked it’s way to the greeks and their practical, actual use.

This^^^.

I’m not even closely involved anymore and when I was in was in CDS and explaining valuation loss or gains over time with the Greeks.

I never spent anytime in the equity derivatives markets - so genuinely curious about theta and what it can be used for financially. Theta calcs is or were pure math. Straight line of time to expiration with it “decaying” every day on its way to expiration. So what am I missing here?


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[CovertM]

It’s just a nuanced and fairly deep part of a general market thread. I know how we got there, just crazy seeing how the discussion worked it’s way to the greeks and their practical, actual use.

So you're saying that we are evolving? Proud

Should we start our own Options specific thread and leave the doomsayers to pontificate here? Oh and Bunny to humble brag his outperformance with the "secret fund".

[Hopeless Sinner]

Bought some NVO on news of a successful trial of a weight loss drug. You guys got me off the sidelines!

[CovertM]

Sold RIOT CC Mar. 5th $50, pretty sure I'm ok getting assigned there and taking profit, but we'll see. Tempted to sell some Puts on TLRY and get in light, but uncertain on their overall longevity.
Closed Feb 26 CSP on GME at 80% profit, on to the next one.

[LeeLau]

This^^^.

I’m not even closely involved anymore and when I was in was in CDS and explaining valuation loss or gains over time with the Greeks.

I never spent anytime in the equity derivatives markets - so genuinely curious about theta and what it can be used for financially. Theta calcs is or were pure math. Straight line of time to expiration with it “decaying” every day on its way to expiration. So what am I missing here?


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In WSB they buy weekly otm call options. They don't care or don't know about the greeks. For them options are lottery tickets for pure leverage.

Eg yesterday I wrote TLRY 65c from 8 to 12 with 2dte. The underlying was from 55 to 61. The call buyers are almost certainly WSB.

Today with 1dte I am writing TLRY 50p from 8 to 12. The underlying is 43 to 48. The put buyers are also almost certainly WSB.

[LeeLau]

Sold RIOT CC Mar. 5th $50, pretty sure I'm ok getting assigned there and taking profit, but we'll see. Tempted to sell some Puts on TLRY and get in light, but uncertain on their overall longevity.
Closed Feb 26 CSP on GME at 80% profit, on to the next one.

I think I'm done selling CCs on Riot as it keeps mooning and I lose the premium anyway as I have to buy back the calls usually at a loss. Eg today I repurchased my RIOT 44C. Instead I'll sell CSPs

[LeeLau]

Covered TLRY 65C. Covered SNDL 4C to take profits on both. Also covered TLRY 50P as I don't want to be long that pile of crap.

[Stu Gotz]

This certainly will make merger arbitrage an interesting investment theme moving forward. Everything is now a moving target.

[LeeLau]

This certainly will make merger arbitrage an interesting investment theme moving forward. Everything is now a moving target.

I feel strongly that small accounts such as ours should take advantage of limited-time market opportunities. The advent of retail dumb money is one such market opportunity. When the counterparty weaponizes options for leverage, doesn't understand or doesn't care about fundamentals, and is fed by un-ending stimulus via helicopter there will be illogical moves.

[4matic]

Gold vulnerable to big decline.

[jacob_dbu]

Lee are you still long APHA tho?

[LeeLau]

Lee are you still long APHA tho?

I was long only for the merger arbitrage. I dumped APHA when TLRY dumped. My profit was the discount I paid for APHA vs TLRY and the delta between the amount APHA dropped and the amount TLRY dropped. It works out to mid 30% based on when I closed out

[LeeLau]

Sold Tlry 35C on dead cat bounce.

Sold Feb19 RIOT 55C and 65C. Decided I will take profits and let them get assigned if it happens. RIOT has gone up way too much compared to other BTC proxies. If it happens I'll look for other vehicles

[CovertM]

Sold Tlry 35C on dead cat bounce.

Sold Feb19 RIOT 55C and 65C. Decided I will take profits and let them get assigned if it happens. RIOT has gone up way too much compared to other BTC proxies. If it happens I'll look for other vehicles

Yeah, my RIOT 50Cs for March are getting crushed today! Sold more PLTR CC for no other reason then this position has no rhyme or reason and collecting premiums for now is worthwhile.

Was interesting to see RIOT and MARA up while BTC is down/flat. Are you still long QS? Good bump yesterday and today. I looked at it yesterday morning and didn't jump on it.

[jacob_dbu]

Yeah, my RIOT 50Cs for March are getting crushed today! Sold more PLTR CC for no other reason then this position has no rhyme or reason and collecting premiums for now is worthwhile.

Was interesting to see RIOT and MARA up while BTC is down/flat. Are you still long QS? Good bump yesterday and today. I looked at it yesterday morning and didn't jump on it.

When you sell a CC how do you choose what strike price to use? Seems like a lot of these OTM calls are easy money if you've got the cash to hold the cover.

[CovertM]

When you sell a CC how do you choose what strike price to use? Seems like a lot of these OTM calls are easy money if you've got the cash to hold the cover.

Total Options Noob:

It depends if I mind letting the shares go. If I don't mind letting a portion go at a certain price and the premium is right then I chose that, likely not WAY OTM strike. If I don't want to get assigned then I try and choose a strike that is IMO out of reach and collect the premium.

Sometimes it doesn't work, EG: I sold $50CC Mar. 5 for RIOT earlier in the week and now those are close to or ITM, would cost me double my premium already collected to buy to cover. I'm not convinced I want to let a portion of RIOT go for $50 right now, but don't want to saddle up the cash to cover and eat into profit. I let it ride at EOD today and will see what happens next week.

Now trying to figure out what to do with my PLTR positions next week is really giving me grief...

[Brock Landers]

Buy calls further out the strike chain, and/or maybe even closer in expiry to offset some of that risk.

The value of those otm calls (if same expiry) will increase more (% wise) than your cc strike. So you don’t need to buy a lot.

[LeeLau]

Yeah, my RIOT 50Cs for March are getting crushed today! Sold more PLTR CC for no other reason then this position has no rhyme or reason and collecting premiums for now is worthwhile.

Was interesting to see RIOT and MARA up while BTC is down/flat. Are you still long QS? Good bump yesterday and today. I looked at it yesterday morning and didn't jump on it.

I was short QS when the PIPE investors unlocked. There'll be another unlock mid year so I'll look for that then. I'd be interested also in being long warrants and short stock but feel that's a crowded trade. Overall I feel QS is fairly to over valued as a hope and dreams company.

I sold RIOT 55C Feb 19 hoping they'd get assigned fyi. Sold 65Cs expecting to keep them. The option chain for RIOT isn't far out enough for me to feel comfortable selling too far out. I did sell 41 and 43P earlier in the week hoping to get more long but they expired worthless

[LeeLau]

Jongiest. What Brock said.

My rule of thumb for stock I want to protect is based around MSFT. I sell 20 delta monthlies. Premium is 1% or so. I subscribe to the companies IR calendar so I know if there's events like earnings, conferences etc which may spike volatility. Because MSFT paid 3% dividend that equates to 15% pa. MSFT is my prototypical boomer stock though with IV of 20%.

Another one I hold is CCL which pays no dividends. IV is 50%. I sell delta of about 20 also but that returns 22% pa. Of course unlike MSFT a cruise line can lose half its value so I'm compensated for the risk.

High IV stocks like RIOT etc are a whole different ballgame. Tbh I find them challenging to trade. I just lost 2 months premium on RIOT for eg as I had to buy back calls when the underlying stock went from high 20s to the high 30s (didn't want to lose the underlying). I'm then taking the risk that the capital gain will hold. So as with all things ymmv

[schuss]

Bitcoin is just so fucking stupid with the transaction cost in electricity. So wasteful.

[CovertM]

Buy calls further out the strike chain, and/or maybe even closer in expiry to offset some of that risk.

The value of those otm calls (if same expiry) will increase more (% wise) than your cc strike. So you don’t need to buy a lot.

Thanks, that makes sense.

Sure it depends on specifics and price movement, but then sell higher strike calls to recoup the loss of buying your CC back, or exercise higher strike call and start over with selling CC?

I’m also learning the hard way that jumping too early on a CC that is ITM but still 15-20 DTE can lead to jumping the gun on covering. Patience can be your friend.

How likely are early assignments if you’re still a week or so out from expiry?


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[Vise]

Bitcoin is just so fucking stupid with the transaction cost in electricity. So wasteful.

What do you think other transaction processing systems use? An abacus?

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[pureantigravity]

What do you think other transaction processing systems use? An abacus?

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Bitcoin does 4 to 5 transactions per second with their blockchain. Others prefer an abacus. Yes, an abacus.

Visa (just Visa) can do 50,000+ transactions per second with their abacus.
Tencent (WechatPay) does 1,000,000,000 transactions per day with their abacus (Chinese abacus).
My debit card works well too - probably also an abacus.
I recommend the credit card abacus system though - comes with ponzi-free* points and insurance and other nifty features.

Also, none of these abacus systems are complaining of too high fees (Bitcoin fees are ridiculous). None of the abacus systems have 'double spend' or massive volatility or require tons of electricity. None of them have interoperability problems or security problems requiring you to hide your USB Wallet Stick such as a Ledger under a birdbath for safety and remember a passphrase of 14 words. None of them are vulnerable to 51% attack.

Abacus systems also allow for 'abacksies' (somewhat like backsies). So if someone moves your abacus beads unintentionally or fraudulently, the credit card or bank will revert it and restore your abacus to the previous state!

Abacksies. You heard it on TGR first!

More importantly, to snow freaks, none of the abacus systems incentivize wasting of electricity. Because extra electricity can be used for snowmaking to make the season longer! Bitcoin incentivizes wasting electricity. The electricity (hashpower) of the network isn't related to the security of the network - nor is it needed to 'mine**' the Bitcoins generated. Bitcoins enter the system by means of a line of code.

Hashpower is directly related to the profitability of mining. Whether the price is up or down, $1 or $10000, the same number of Bitcoins are generated each day, regardless of the amount of hashpower in the network. In essence, this so called "store of value" has actually created an incentive to destroy value by creating an economic incentive to maximize the amount of mining that happens for the reward at a given price.

Those are some compelling reasons to go the abacus route. For those that wonder what one still looks like:



So easy, even kids can use it.



Proper technique saves getting Carpel Abacus Finger Syndrome.

*ponzi-free points ensure the user that current valuations do not depend on the continual intake of monies from new abacus purchasers to support the abacus system.
**It is called 'mining' but it is really just a fancy way of saying voting + guessing.