Is the stock market going to tank?

[Cono Este]

Guys, guys, guys. This is not just any bank. Calm down, we are never doing it for anyone else.

[LeeLau]

Bailing out failed businesses with tax payers money is called socializing the losses

SIVB didn't get bailed out. Equity and bondholders got wiped out.

[BobMc]

I was curious what happens…

https://investorplace.com/2023/03/so...tock-now-what/

Edit.

I’m kinda regretting my Mar 17 put I have out there. Reading that it appears everything is halted, options won’t be assigned. You get the premium from the option immediately, can’t lose that. I’m thinking a longer term option would be a better play in a situation where the underlying could be halted. I’ll own 100 shares on Friday if it doesn’t go above $35. Longer term option I’d get the premium and not have the risk of holding the possible worthless shares. If my put goes positive tomorrow I’m going to buy it back and sell another for a longer term.

Not that I think they’re going tits up, but can’t be too careful.

[LeeLau]

I was curious what happens…

https://investorplace.com/2023/03/so...tock-now-what/

Edit.

I’m kinda regretting my Mar 17 put I have out there. Reading that it appears everything is halted, options won’t be assigned. You get the premium from the option immediately, can’t lose that. I’m thinking a longer term option would be a better play in a situation where the underlying could be halted. I’ll own 100 shares on Friday if it doesn’t go above $35. Longer term option I’d get the premium and not have the risk of holding the possible worthless shares. If my put goes positive tomorrow I’m going to buy it back and sell another for a longer term.

Not that I think they’re going tits up, but can’t be too careful.

You sold that March 17 put right?

[Brock Landers]

You sold that March 17 put right?

He wrote it.

Bob I think you’re fucked?

[BobMc]

Yup, I sold it. $35 strike, got $4.40. I’m to the plus down to $31.60. It really doesn’t matter anyways as I don’t think they’re going under. I don’t think the stock gets back to $120 for quite a while but at $35 I’m way below book value.

Getting assigned will give me another tranche to sell calls on, premiums are pretty high right now.

[JimmyCarter]

Rumors that FRC is exploring sale opportunities, which might help you out

[4matic]

Pretty sure Bob sold a put in FRC not SIVB.

[4matic]

10y yield is the same as it was 10 months ago and same as it was 6 months ago.

[LeeLau]

Pretty sure Bob sold a put in FRC not SIVB.

Bob if you sold a FRC put and it gets assigned then that's fine.

If you sold a SiVB put then that's not good. Options can be assigned independently of the underlying stock trading

[LeeLau]

Credit Suisse gets a bailout. What a surprise

https://finance.yahoo.com/news/credi...012622362.html

[altacoup]

They’ll only be realized if they’re forced to sell, and they’ll only sell if it makes financial sense to do so OR if they have to liquidate investments prior to maturity, and they’ll only have to liquidate investments if they have an issue with liquidity, and they’ll only have an issue with liquidity if their ample cash reserves and other sources of liquidity are inadequate to cover operations and deposit outflows. Except the BTFP will make that unnecessary anyways.

Unrealized losses in the system are off the charts, and are no longer the easy or attractive source of liquidity they were always considered. That’s what a sustained record low rate environment plus rapid rate hikes does.

I’m a dumbass electrician but aren’t you describing exactly what happened with svb? And the general public only sees rich fucks getting a free ride, where as they’re fucked and homeless if they miss a payment. I understand the underlying complexities. But optics are everything.

[Kevo]

Credit Suisse gets a bailout. What a surprise

https://finance.yahoo.com/news/credi...012622362.html

Of course they did.

I have a generally positive view of the Swiss, but I've also met several Swiss people with a massive superiority complex about their financial institutions and their perceived elevated worldview on and international relations.

I kinda have some schadenfreude going watching them have a banking failure.

[BobMc]

Bob if you sold a FRC put and it gets assigned then that's fine.

If you sold a SiVB put then that's not good. Options can be assigned independently of the underlying stock trading

Give me a little credit, lol. That is what I was wondering about, whether an option could be assigned even with a halt on trading? If so then I’m not going to change my strategy.

[LeeLau]

Give me a little credit, lol. That is what I was wondering about, whether an option could be assigned even with a halt on trading? If so then I’m not going to change my strategy.

Heh. Figured it was FRC.

Yup...the options market can operate independently of the stock market

[J. Barron DeJong]

This seems like a reasonable and insightful summation of the SVB situation:

https://jabberwocking.com/silicon-va...-thats-broken/

[Kevo]

GDP of Switzerland is 800 billion. They spent 1/16th of their GDP on bailing out a shitty bank.

[4matic]

Give me a little credit, lol. That is what I was wondering about, whether an option could be assigned even with a halt on trading? If so then I’m not going to change my strategy.

I don't think it can be assigned while halted. Eventually SIVB will trade even if it's for fractions of a penny. Enron traded for many years as a fractional penny stock. Someone owns the rights to that put.

/\This is wrong and of course Lee was right:

Yes, put writers who have open short positions have an obligation to buy the underlying at the strike price, regardless of whether the stock is trading. When a stock exchange halts trading in a stock, the options likewise won't trade. This lack of trading typically does not affect the ability of put or call holders to exercise (and a writer subsequently to be assigned) unless the put holder's firm imposes restrictions on those who do not have long stock. Although option writers still carry the obligations associated with their short position, option holders may have to enter explicit instructions with their firm to either exercise or not exercise any expiring option. Depending on when the trading halt occurred.

Heres the full memo search: OCC Infomemo #30049

The question I have on that memo is what would be the "declared price." It doesn't sound like there is a clear definition

[Kevo]

I had a no penalty CD at 4% that I closed today.

I was initially going to put the proceeds directly into another no penalty CD at 4.75%, but instead decided to consolidate cash into VUSXX within my Vanguard brokerage.

I like the idea of having quicker access to the money directly in my brokerage account. If shit really falls apart and markets go lower, it'll be easier to start making moves into indexes instead of needing to wait a few days for money to clear out of the CD and into a brokerage.

[RoooR]

Credit Suisse feels like it's been constantly failing my entire career.

[LeeLau]

I don't think it can be assigned while halted. Eventually SIVB will trade even if it's for fractions of a penny. Enron traded for many years as a fractional penny stock. Someone owns the rights to that put.

/\This is wrong and of course Lee was right:

Yes, put writers who have open short positions have an obligation to buy the underlying at the strike price, regardless of whether the stock is trading. When a stock exchange halts trading in a stock, the options likewise won't trade. This lack of trading typically does not affect the ability of put or call holders to exercise (and a writer subsequently to be assigned) unless the put holder's firm imposes restrictions on those who do not have long stock. Although option writers still carry the obligations associated with their short position, option holders may have to enter explicit instructions with their firm to either exercise or not exercise any expiring option. Depending on when the trading halt occurred.

Heres the full memo search: OCC Infomemo #30049

The question I have on that memo is what would be the "declared price." It doesn't sound like there is a clear definition

I was short RSX calls and short puts when RSX was halted. It was a basket of Russian ADRs thats not traded for a year.

The calls assigned so I was short stock. The puts didn't assign even though they had been in the money at halt. Their owners quite logically didn't want to be long a halted stock.

IB ( my broker) wrote RSXs value down to $.89 from the $ 7 short proceeds (call + premium) so it's in accounting and tax limbo for now.

Declared price is indeed a strange beast

[JimmyCarter]

FRC- buy back in at 20 or avoid like the plague?

[Cono Este]

Heh. Figured it was FRC.

Yup...the options market can operate independently of the stock market

Generally when a stock halts so do the options. No one is going to make a mkt when they do t know where it’s trading. You can be assigned though the occ, as you stated.

I did that in Pegasus gold and Enron when they never re opened.

[Cono Este]

FRC- buy back in at 20 or avoid like the plague?

I’ve lost zillions buying too soon. I’d need a 10-1 potential return.

[LeeLau]

Generally when a stock halts so do the options. No one is going to make a mkt when they do t know where it’s trading. You can be assigned though the occ, as you stated.

Correct but I was surprised and one leg of my hedge failed but to my profit!

Jimmy. I'm still in my original FRC and WAL bag and holding. Added some this morning via FRX puts i wrote on that oh so sweet 750% IV (sarcasm)

If FRC sells all of substantially all its business it probably won't be good for equity though. Their wealth management division is superb but selling under pressure usually means deep discount. This popular delusion and madness of crowds is deeper than I anticipated