Markets are now crashing lower in a most heinous manner. Early this morning, I bowed out of my position and bid them a good day. Even though the losses were upsetting and ruined my breakfast, I now feel better, seeing my ERY climb higher.
Listen to me: these are dark days. The President is quite literally insane. War and clown punches are just around the bend.
Be you diving into today’s ‘dip’, running fast down the block. You pivot and angle yourself sideways readying to turn the corner, but run into a fucking clown who punches you out and slaps the shit out of your face as you lay there stupefied by the blow.
Both GLD and TLT are safe havens. See to it that you have some and say your prayers for tomorrow will bring a great doom and apocalypse to your poorly constructed portfolios.
Top picks: cash, TLT, GLD, ERY
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The mad king? I haven’t watched the last season of Game of Thrones but there must be some parallels.
trump is diverting the news to a stock market crash, and away from his abject failures and scandals. Impressive “3D” chess…….. LOL
TRUMP DOES THE BEST TREASON
Whoever hates Trump is, frankly, unpatriotic… and shit.
Turns out that red pill was cyanide.
Didn’t we know all along that his supporters would drink it all up? Jim Jones would be quite proud of what Trump accomplished:
https://www.usatoday.com/story/life/books/2017/04/10/the-road-to-jonestown-jim-jones-and-peoples-temple-jeff-guinn-book-review/100143272/
all your fault Fly
Word is an invading force is marching north with the great state of Texas in its sights- that’s what’s spooked the markets. CPB needs looser ROE to enforce the Monroe Doctrine.
My apologies for repeating some of Fly’s previous post.
I was busy trading the eminis with lofty acumen.
Love how cranky everyone is.
We may see a bounce and have some good weeks here and there, but overall it is going to be a tough year for stocks. No one should be willing to put their balls out there with this unstable imbecile in office. He somewhat controlled himself during the 1st year in office, but now has become unhinged as evidenced by his firing of virtually all of the adults that were in his administration. I still wouldn’t short though, as there are just enough checks-and-balances to keep his stupidity from completely wrecking things.
Oh f u
Then how the hell was vix, 10 and 9, for many months into and beginning pres. 45.
It never was the case that uncertainty wasn’t present. Throughout, and throughout.
Vix and indexes had massive manipulations put on them, is what makes the most sense.
AS I SAID
AT THE BEGINNING
OF 2016
None of the post election increases were… authentic. Gimme a break. Now becoming more clear?
Huh?
Hello?
2017.
Not 16.
Fuck.
Insane Trump doing his own thing is preferable to Krooked Klinton taking marching orders from deepstate apparatchiks.
We bounce hard tomorrow, you know it. Tempted to drop my hedges right here.
We go lower
Told ya boss, here we go up into the bell!
Long/short hedging is working out phenomenally in this market.
You mean “trading”?
Sorry, I’m new here.
I don’t think there are hard defintions of “trading” vs “investing, ” but the difference is holding period. Persoanlly, if you are holding psotions for less than 1 week (buying a stock one day and then selling it 2 days later), then I would rate that as “trading.”
Hedging is completely different, and independant of time frames. It is a more advanced technique, although ironically it is also more conservative. It involves two (or more) investments (held simultaneosly) that you expect to go in opposite direction.
Historically, US Treasury bonds and US stocks move in opposite directions: when stocks fall in price, people buy less risky investemtns such as bonds so they rise in price. So a common hedging strategy is to buy SPY (a basket of stocks) and TLT (a basket of bonds). In a bull market, SPY woudl gain and TL woudl lose moeny. In a bear market, SPY would lsoe money and TL would gain.
Hedgeing reduces you potential gains, but – more importantly – it also reduces your potential losses.
“Shorting” stock measn that you amke moeny when the price goes down. So you actaully borrow shares (transparently through your broker) and sell them, hoping you can buy them back cheaper.
So let’s say last Friday you bought $10,000 of AAPL stock “long” and “shorted” $10,000 of NFLX stock, creating a short/long hedge.
Currenlt ,AAPL is down 0.66% and NFLX is down 5.1%. So a “trader” may close out both, and they woudl have lost $66 on their AAPL position, but gained $510 on their NFLX position, for a profit (before fees and taxes) of $440. An “investor” may hold both positons for further potential profit (but more risk).
Now most people know that NFLX is more volatile (larger percentage price changes) than AAPL, so the postion above is overall bearish on the market.
For example, let’s say that typical when AAPL move +1%, then NFLX moves 2.5%, and when AAPLy moves -1%, NFLX typically moves -2.5%.
In that case a Neutral positon would be long $10k AAPL, short $4k NFLX. You’d make $0 in most cases:
AAPL +1%, NFLX -2.5% = $100 – $100 = $0 total gain
AAPL -1%, NFLX +2.5% = -$100 + $100 = $0 total gain
In this case, you be counting on APPL doing better than NFLX relative to their hsitoric performance ratio (Ie, you expect APPL to jump up or NFLX to plunge).
Numbers, thanks for taking the time for the explanations, but I was tongue-in-cheek when I said I was new here. I started on the CME floor in 1989, and have watched roughly a few hundred-million ticks since. (When I said a few comments up that I was trading the eminis with lofty acumen, I was.)
Seems like most retail “hedging” is taking some hopefully inversely related position because the guy doesn’t want to sell his initial position, which has gone to shit.
Last 5 posts were um-amazing. Thank you.