Is the stock market going to tank?

**LeeLau** · 03-03-2021, 05:53 PM

Originally Posted by Toadman

Crazy moves with RKT. Opens at 37ish and closes at 28. This is definitely not our parents stock market.

Volatility is up. Assume that it reverts to mean so sell volatility

**CovertM** · 03-03-2021, 08:04 PM

Originally Posted by LeeLau

Yes. Pick a plan and stick to it. Until you see other places to use capital. Profit is profit. There'll be another memestock to target

Shorted RKT premarket in low 40s. IB ran out of borrows so sold 40C on open. Let it tank then sold 30P to close out the short.

Then RKT kept tanking so I closed out the short and the 30P and the 40C. Covert that wasn't part of the plan but the short commons was down 10, the 40C was down 78%. The 30P I sold was flat even thought RKT underlying was up slightly over what I sold (vega and theta worked for me). So I changed my plan to take a decent daily gain.

Sold 27P on open. Plan is to leg into a small long and hold past ex div date. People may screw.it up and not hold long enough for div (you have to be long by March 6). I feel RKT may get a bounce and I'm ok with holding a bag at 27. Adjusted for premium and div that will be 23.5 approx

Edit just looked at calendar and if the 27P assigns it won't be till March 8th so that changes the plan. I'll probably try to cover the put flat tomorrow

Thanks for feedback. I hadn’t played anything short expiry before, now I know IV can remain high even a couple days out with price swings that wild.

Contemplating taking a long position tomorrow morning (maybe premarket) and playing it out with CC through dividend action. Trying to figure out how the autists are going to fuck up the pricing thinking there’s arbitrage opportunity pre/post dividend.

Assuming you’re level 5 or whatever IB uses for top option approval, so when you sold $40 C this morning that was naked? And your original short was naked as well?

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**stuckathuntermtn** · 03-03-2021, 08:21 PM

Originally Posted by Toadman

FIFY.

That's what I meant.

**LeeLau** · 03-03-2021, 08:29 PM

Originally Posted by CovertM

Thanks for feedback.
Assuming you’re level 5 or whatever IB uses for top option approval, so when you sold $40 C this morning that was naked? And your original short was naked as well?

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Yes to both. My IB is unrestricted. They've changed it now but used to require asset and knowledge attestation.

I was going to buy longer dated calls to hedge the short but when markets opened RKT tanked so quickly that I didn't feel it was necessary

**LeeLau** · 03-04-2021, 09:48 AM

In RKT 28.20. Sold 35C to get average down to 26.70. Hope to hold for at least a month to get premium + special dividend. Let's see how this goes

**CovertM** · 03-04-2021, 10:32 AM

Originally Posted by LeeLau

In RKT 28.20. Sold 35C to get average down to 26.70. Hope to hold for at least a month to get premium + special dividend. Let's see how this goes

I took a small long position on the dip to 25ish this morning. Was going to sell CC but still trying to figure out how having CC out with a dividend coming affects possible assignment? Or does special dividend not have same impacts? As long as CC is way OTM then no issue?

**LeeLau** · 03-04-2021, 11:09 AM

Originally Posted by CovertM

I took a small long position on the dip to 25ish this morning. Was going to sell CC but still trying to figure out how having CC out with a dividend coming affects possible assignment? Or does special dividend not have same impacts? As long as CC is way OTM then no issue?

Options get split into two series ex div. There'll be a special illiquid series that get repriced taking the special dividend into account which will reflect that it was sold on RKT pre ex div. A new series will be issued next week that will reflect price post ex div.

You'll want to sell calls on the new series issued next week reflecting post ex div that will be more liquid. If one has options pre ex div iirc you can only close them out and not otherwise conduct trades eg STO or BTO

This isn't the case for regular dividends fwiw

**Stu Gotz** · 03-04-2021, 01:01 PM

Originally Posted by Stu Gotz

Ark Asset is going to be the story to watch over the next 12 months.

The Ark wrecking ball swinging heavy today.

**Brock Landers** · 03-04-2021, 01:09 PM

Long term the ark companies have different revenue drivers. Short term they trade together. All of them. Buckle up (if not already buckled)

**CovertM** · 03-04-2021, 01:48 PM

Originally Posted by LeeLau

Options get split into two series ex div. There'll be a special illiquid series that get repriced taking the special dividend into account which will reflect that it was sold on RKT pre ex div. A new series will be issued next week that will reflect price post ex div.

You'll want to sell calls on the new series issued next week reflecting post ex div that will be more liquid. If one has options pre ex div iirc you can only close them out and not otherwise conduct trades eg STO or BTO

This isn't the case for regular dividends fwiw

Thanks for explaining. So you just sold the weekly 35C to bring your CB down? Then start selling CC next week when the new option comes out.

Bought $15 puts on SKT as it mooned this morning, see how that one plays out.

**LeeLau** · 03-04-2021, 03:03 PM

Originally Posted by Brock Landers

Long term the ark companies have different revenue drivers. Short term they trade together. All of them. Buckle up (if not already buckled)

Aye. All the etfs are correlated together and all move with technology

**LeeLau** · 03-04-2021, 03:06 PM

Originally Posted by CovertM

Thanks for explaining. So you just sold the weekly 35C to bring your CB down? Then start selling CC next week when the new option comes out.

Bought $15 puts on SKT as it mooned this morning, see how that one plays out.

Yup. Rkt ( pre meme) was a solid theta generator so I'm not averse to having some. I'm not crazy about the alarming massive potential class B to Class A conversion but otherwise it isn't a terrible long.

**californiagrown** · 03-04-2021, 05:36 PM

Ive gotten smoked over the last 7 trading days. Damn. COST, VIST, SLV all long term (months long so far) holds for me have just gotten pummeled.

**4matic** · 03-04-2021, 07:38 PM

Powell could have deflected better on inflation.

**4matic** · 03-04-2021, 07:42 PM

The growth sell off can easily accelerate. I know a few newbies been pitching ARKK to my gf. A lot of weak hands in tech growth.

**CovertM** · 03-04-2021, 07:53 PM

Originally Posted by 4matic

The growth sell off can easily accelerate. I know a few newbies been pitching ARKK to my gf. A lot of weak hands in tech growth.

It’s been an interesting fund, I was in a small position last year but exited early this year. Over 10% of the fund is Tesla and the other top holdings have potential for wild swings. Auntie Cathie is definitely BTFD throughout this whole thing.

Seems to be a strange correlation with increased mainstream air time and her funds tanking. Granted they are all correlated heavily and the holdings are getting pummeled individually, but definitely seems like the overhype is getting called out.

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**4matic** · 03-04-2021, 08:28 PM

Originally Posted by CovertM

Auntie Cathie is definitely BTFD throughout this whole thing.

I’m guessing her fund has to be invested so if she has new cash she buys. It’s not like Berkshire at all. She will be sell the dip if shareholders exit.

**BobMc** · 03-04-2021, 08:36 PM

I’ve been in a holding pattern, any tech losses (and renewables) has been offset by oil. MRO and XOM have been leading the charge for me, while NEE and BEP have been disappointments. I’m pretty confident the latter two will turn it around eventually. Never would’ve thought I’d be down $90 on 6 shares of AAPL this quickly, heh.

If I had waited till today I could’ve bought 5 shares of ACCD instead of the 4 yesterday. Mama Cathie BTFD on it again today.

**Toadman** · 03-04-2021, 10:35 PM

Originally Posted by 4matic

Powell could have deflected better on inflation.

Missed it. Did he not do a good job lying about the threat of inflation being non-existent? He needs to work on that because if people find out that inflation has been here for a few months now, and ramping up, they may panic sell. We can't have people trading on fundamentals or the whole pyramid scheme will come crashing down.

**4matic** · 03-04-2021, 11:05 PM

He said there was risk of temporary inflation due to stimulus and re-open. Maybe true but fed has previously stated they were going to let the economy run hot so just say that inflation is not a worry like they have been suggesting.

**Brock Landers** · 03-05-2021, 07:52 AM

They haven’t been close to 2% in 13 years nevermind prolonged time over 2. Which would be good. Plenty of tools to temper it down too. Not worried about crushing inflation anytime soon. Especially with full employment so far off- and most of this underemployment is in service businesses which had been the only businesses actually pushing any type of inflation pre covid. Amazon, Walmart and price transparency/discovery is a big headwind to inflation

**californiagrown** · 03-05-2021, 09:05 AM

Originally Posted by Toadman

Missed it. Did he not do a good job lying about the threat of inflation being non-existent? He needs to work on that because if people find out that inflation has been here for a few months now, and ramping up, they may panic sell. We can't have people trading on fundamentals or the whole pyramid scheme will come crashing down.

my silver stonks (which i bought mostly last summer) have been falling with increased fears of inflation, because....? Oh well, i have $1.36 cash in my portfolio now and unless a massive dip comes along im just gonna be playing with the money i have in that account and i really hate selling at a loss.

**4matic** · 03-05-2021, 09:10 AM

Originally Posted by californiagrown

my silver stonks (which i bought mostly last summer) have been falling with increased fears of inflation, because....? Oh well, i have $1.36 cash in my portfolio now and unless a massive dip comes along im just gonna be playing with the money i have in that account and i really hate selling at a loss.

Silver hasn't been an inflation hedge since the 70's. Gold, in fact, has been a better deflation hedge since the 70's.

**Hopeless Sinner** · 03-05-2021, 09:12 AM

Is the next 2T stimulus all ready accounted for in stock prices?

Or will the market pop when it's passed?

**4matic** · 03-05-2021, 09:32 AM

Originally Posted by Hopeless Sinner

Is the next 2T stimulus all ready accounted for in stock prices?

Or will the market pop when it's passed?

If it passes and the market goes up it will be due to stimulus. If the market goes down it will be due to stimulus. It's a place your bet trade not an investable macro event. If my interaction with a handful of new pandemic traders is any indication I suspect a big decline in the ARKK names will paralyze a lot of new traders. The ones I've spoken to only have a plan for when stocks go up. They have no plan how to exit a losing position other than hope they come back.