iBankCoin
18 years in Wall Street, left after finding out it was all horseshit. Founder/ Master and Commander: iBankCoin, finance news and commentary from the future.
Joined Nov 10, 2007
19,846 Blog Posts

IS IT WISE TO SHORT INTO THE HOLE?

All we have are weapons and the stock market. Without them, we are nothing — meaningless fat slothful nation of racists and weirdos living in overpriced hellscapes. So the question I pose before you is simple, if not philosophic.

Is it wise to short or hold shorts into the hole?

Just a simple academic question from a deep thinker.

I closed out my TZA short today for a 4.7% overnight success and now hold a fuckload of cash, a few defensive positions, and one or two longs. If forced to make a move, I mean absolutely forced, I’d close my eyes and go long into the final hour of trade — with the intent to sell tomorrow.

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10 comments

  1. teslawasright

    Possibly a strangle LeLe Fly, no?

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    • numbersgame

      Personally I don’t think so. There’s been a few times I’ve thought about it and usually decided the options were too expensive (check out the VIX…). On SPY, your break-even is a 1.5-2% move. Even when I profited, it really wasn’t that much. Remember, options are priced based on the expected move of the underlying stock/ETF.

      The current two-day move is still not big enough to expect either a V-recovery or further downside for a third straight day. Maybe an intraday plunge+recovery, but I don’t see a 2% up day without a catalyst.

      Here are the Oct 04 SPY prices near the money:
      287P 1.82
      288P 2.28
      288C 1.63
      289C 1.16

      I’ll update it at the close tomorrow and again on Friday

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      • alty

        Save yourself the trouble

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      • numbersgame

        Here are the Oct 04 SPY prices near the money:
        287P 0.39
        288P 0.57
        288C 3.04
        289C 2.27

        So the 287P/289C strangle lost 11%
        and the 288 straddle lost 7.6%.

        Now if you managed to nail the intra-day plunge and recovery that I successfully predicted, you would have made money. Question is would you/did you sell at the right time or would you have expected a bigger move/follow through?

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    • spaceman

      I couldn’t agree more! tesla and numbers and their numbo-jumbo (get it?!?!) Dusty coins lying in a vault cost 0.5% per year. Capital appreciation over the next 5+ years gold 15+% per year silver 30+% per year!

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  2. ferd

    President about to speak. Maybe he’ll announce the best, most perfect, trade deal ever – – or offer to buy Lapland.

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  3. WrongView

    At this point, I don’t think POTUS wants to stop a stock market drop.

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    • omfgitsjd

      My all time favorite response to a market decline was Reagan’s during the 87 crash, “Maybe some people seeing a chance to grab a profit, I don’t know.”

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  4. flea

    dad’s favorite song …

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  5. soupbone

    Far from over here. Not a pro ‘business as usual’ atmosphere at all. Tra-La-La-La.

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