Interim Update Dec 19, 2022

[chippermon]

Almost like they are waiting on some big event to happen and take advantage of it. Also, for the big players, they can get around reporting requirements if they are out at the end of the day.

Yeh, there's some weird stuff always going on in the options market.

I'm not really sure how to use this type of information consistently effectively.

Small example: I had sold some tmf 0217123-12calls previously ... yesterday, they went up 40%+ even though tmf dropped 3.3% to 7.62.

Kinda weird, tmf has low options volume/liquidity, so there's that ... or the options market could be pricing in higher long U.S. bond prices in the near future ... maybe a bit of both.

Hmm. That is weird. Not sure about that. I do prefer the more liquid stocks, ETFs, etc. Sometimes I'll take a trade in a strike price I didn't really want just to have the liquidity and OI it offers.

[SOL]

SOL,

But yet, you are not a fan of shorting the markets? I did well with my shorts this year. If one had purchased SQQQ on Jan 1 2022 and rode it out to yesterday....In at around 29 out at around 54....close to100% gain. Now, if one had bought TQQQ in at 83, out at 17. 17. People have been talking about buying TQQQ here. If the PTB are that greedy, they can certainly make plenty of money shorting the market and be patient while the average 401k investor loses their shirt, with no options inside most plans to invest in shorting, gold, bitcoin, or REITs. In my journal, I have reflected on the possibilities of "bad news" vs "good news", and it seems like 2023 could be a potent bad news year, especially with America's obsession with Ukraine and what appears to be a belief my the madness in the west that a nuclear conflict is a possible winning scenario. I will be shorting in 2023, probably even more than in 2022. Yes, I can miss the "explosive move up", but there were 5 devastating explosive moves down in 2023, and applying the 50% loss requires a 100% gain model, it makes sense to short. Convince us otherwise, especially since you have said that recent movements make a bigger decline more likely.

Shorting the markets works for brief periods over the long run; bulls that have mastered the art of patience and discipline will always slay the bears.

However, when you start playing the bearish side, there is a mental shift, and your mind stops processing the case for a bullish pop. It alters the story to match the new path you have taken. I am not interested in morsels; I want the whole steak, and shorting the markets prevents you from seeing the new bull, and you risk a pound to make a penny. Now that we have the new format in play, we will move mostly into cash and issue unofficial short plays if we run into a similar situation.

Hindsight is wonderful. You can pull up charts and state what you could, would or should have done, but when most try that in real time the outcome is a lot different. I can pull up a chart and see that being a bull works, but no long-term chart supports a bearish outlook. What kills most people during a bear market is that they did not follow simple rules. Do not over-allocate funds to a position. Keep some cash on hand. Ascertain your risk profile and so on. And as Yodean and others have noted, low-risk investors grow balls of steel when the markets are in a bullish phase but turn to sardines when the bear rears its head.

[chippermon]

Almost like they are waiting on some big event to happen and take advantage of it. Also, for the big players, they can get around reporting requirements if they are out at the end of the day.

Yeh, there's some weird stuff always going on in the options market.

I'm not really sure how to use this type of information consistently effectively.

Small example: I had sold some tmf 0217123-12calls previously ... yesterday, they went up 40%+ even though tmf dropped 3.3% to 7.62.

Kinda weird, tmf has low options volume/liquidity, so there's that ... or the options market could be pricing in higher long U.S. bond prices in the near future ... maybe a bit of both.

So, I have had some fun over the past year and a bit with soon expiring option trades. When I say soon I mean I am playing the regular monthly expiry options one to two weeks ahead of expiry. You might be shocked at the liquidity that is offered. I use TA with a very precise set up required using daily and 60 minute charts. I only hold for one to five days. Super fun. Here is a list of the 50 most liquid option markets for stocks. I compiled this list last year so some securities may have changed. Just for shits and giggles, if you have the time.

[jonnyfrank]

SOL,

But yet, you are not a fan of shorting the markets? I did well with my shorts this year. If one had purchased SQQQ on Jan 1 2022 and rode it out to yesterday....In at around 29 out at around 54....close to100% gain. Now, if one had bought TQQQ in at 83, out at 17. 17. People have been talking about buying TQQQ here. If the PTB are that greedy, they can certainly make plenty of money shorting the market and be patient while the average 401k investor loses their shirt, with no options inside most plans to invest in shorting, gold, bitcoin, or REITs. In my journal, I have reflected on the possibilities of "bad news" vs "good news", and it seems like 2023 could be a potent bad news year, especially with America's obsession with Ukraine and what appears to be a belief my the madness in the west that a nuclear conflict is a possible winning scenario. I will be shorting in 2023, probably even more than in 2022. Yes, I can miss the "explosive move up", but there were 5 devastating explosive moves down in 2023, and applying the 50% loss requires a 100% gain model, it makes sense to short. Convince us otherwise, especially since you have said that recent movements make a bigger decline more likely.

Shorting the markets works for brief periods over the long run; bulls that have mastered the art of patience and discipline will always slay the bears.

However, when you start playing the bearish side, there is a mental shift, and your mind stops processing the case for a bullish pop. It alters the story to match the new path you have taken. I am not interested in morsels; I want the whole steak, and shorting the markets prevents you from seeing the new bull, and you risk a pound to make a penny. Now that we have the new format in play, we will move mostly into cash and issue unofficial short plays if we run into a similar situation.

SOL,

Thank you for the reply. It is excellent, and your points are absolutely valid.

My post was simply a way to stir the pot and get everyone to think out of the box a little. I did well shorting some positions this past year, and did so fleet of foot. With all the talk around here about the PTBs, one thing to consider is that they can make money shorting, while the vast majority cling to their 401k plans with limited options and fall into learned helplessness. I will be shorting again this year simply because I think the black swan will involve the Ukraine and it will be more like the Black Swan of Death. One nuclear bomb and it will allow Biden to institute and emergency order that will shut down the economy and make COVID look like a day in the park.

I also posted to address some of those who outright mock shorting on these boards. Sorry guys, but even when the market shoots up and you want to say "how is the shorting going" simply look at the 1 year chart on SQQQ and realize that even with the up days and mini rallies a close to 100% gain is nothing to sneeze at. Again, as I look toward 2023 I see more possible negatives than positives, and if the PTBs really want to move forward on their great reset, the pieces are all in play.

Right now, I am in a good cash position but most of that is reserved for a land purchase as prices continue to drop and probably a second passport. I am no longer in love with America and I am simply thankful for the run I have had here, because it was truly a great place to experience life. Now, my eyes are on the future and I am optimistic about what lies ahead for me but I do worry about the younger generation coming up, because they are not very bright. The school district I live in is rated tops at 5 stars. Of course, they allow the students to re-test 3x on every exam. They hand out A's like candy, and when you talk to most of these kids they can't even tell you what the ice age was or what the moon does to our planet, not to mention any knowledge of the Constitution or the idea of God or a higher power. They seek all of their answers via Google and they are allergic to books.



Hindsight is wonderful. You can pull up charts and state what you could, would or should have done, but when most try that in real time the outcome is a lot different. I can pull up a chart and see that being a bull works, but no long-term chart supports a bearish outlook. What kills most people during a bear market is that they did not follow simple rules. Do not over-allocate funds to a position. Keep some cash on hand. Ascertain your risk profile and so on. And as Yodean and others have noted, low-risk investors grow balls of steel when the markets are in a bullish phase but turn to sardines when the bear rears its head.

[Yodean]

So, I have had some fun over the past year and a bit with soon expiring option trades. When I say soon I mean I am playing the regular monthly expiry options one to two weeks ahead of expiry. You might be shocked at the liquidity that is offered. I use TA with a very precise set up required using daily and 60 minute charts. I only hold for one to five days. Super fun. Here is a list of the 50 most liquid option markets for stocks. I compiled this list last year so some securities may have changed. Just for shits and giggles, if you have the time.

@SlickChip: thanks for sharing - this looks potentially super useful in a variety of ways ...excerpt going into the TIJ (trading-investing journal), 1st entry of '23, in fact.

[LoriPrecisely]

So, I have had some fun over the past year and a bit with soon expiring option trades. When I say soon I mean I am playing the regular monthly expiry options one to two weeks ahead of expiry. You might be shocked at the liquidity that is offered. I use TA with a very precise set up required using daily and 60 minute charts. I only hold for one to five days. Super fun. Here is a list of the 50 most liquid option markets for stocks. I compiled this list last year so some securities may have changed. Just for shits and giggles, if you have the time.

Thank you, Chippermon. That is very helpful. I agree with you, I have also been trading options on a lot of these stocks. Do you mind sharing exactly what tactic you choose? Buying/Selling Calls and/or Puts, or doing credit/debit spreads, or butterflies or Iron Condors, etc?

[chippermon]

[

Thank you, Chippermon. That is very helpful. I agree with you, I have also been trading options on a lot of these stocks. Do you mind sharing exactly what tactic you choose? Buying/Selling Calls and/or Puts, or doing credit/debit spreads, or butterflies or Iron Condors, etc?


I'm just keeping it simple. Buying puts.

[SOL]

So, I have had some fun over the past year and a bit with soon expiring option trades. When I say soon I mean I am playing the regular monthly expiry options one to two weeks ahead of expiry. You might be shocked at the liquidity that is offered. I use TA with a very precise set up required using daily and 60 minute charts. I only hold for one to five days. Super fun. Here is a list of the 50 most liquid option markets for stocks. I compiled this list last year so some securities may have changed. Just for shits and giggles, if you have the time.

Ironically, stocks such as CPB, K, HBMD, GIS, HSY, etc., that held up well so far are now trading in the very to extremely overbought ranges, akin to what TSLA and many other high-tech companies were doing in 2022. These plays might be worth taking a closer look at for those familiar with shorting,

FYI HBMD seems to have a very cyclical pattern. When it starts to roll down, it does so nicely and vice versa

[Yodean]

*****

My best guess is we're somewhere near the left of the chart atm ... so banks, tech should be gtg ... my base case, anyways.

Banksters always win ...