4 ms·
I think this is an emotional reaction, I have 60k of liquid cash ready to invest tomorrow, where would be the best place to put it? My first thought is a lever
by swalsh 10y ago
I think this is an emotional reaction, I have 60k of liquid cash ready to invest tomorrow, where would be the best place to put it? My first thought is a leveraged ETF... which I think for a short term trade is okay, but the leveraged nature might magnify my losses more than I can tolerate if I'm wrong. What are you guys looking at?
- shostack 10y agoDon't and dollar cost average. If you have to ask this question here, you are not investing, you are gambling. Well, actually you're gambling period if you try to time the market.
- mrleinad 10y agoDon't do anything unless you're thinking intraday. Better wait for the dust to settle.
- swalsh 10y agoI'm thinking the timeframe will be 2 or 3 days.
- tedunangst 10y agoSelling out of the money puts means you don't have to time the bounce.
- rplnt 10y agoDepending on when the new president gets to a microphone.
- refurb 10y agoIf you're looking for something leveraged, your risk tolerance is higher than mine. Nothing wrong with that. I dumped a bunch of cash into the market right after the Brexit vote. Wasn't planned, the timing just worked out. Not bad getting a 3-4% return in the matter of a couple weeks. Will that happen this time? Not sure! But the market probably did over react.
- deleted 10y ago[deleted]
- devbug 10y agoGo back in time and buy call options? Now... you're trying to time the market. Good luck.
- MoOmer 10y agoAh, ye olde time inverted option
- deleted 10y ago[deleted]
- hristov 10y agoDon't use a leveraged ETF. You really get screwed on the leverage. You lose much more when it goes against you win when it goes in your favor. If you think the markets will recover just buy an index following ETF. If you want high leverage, find an index following ETF that trades in very high volumes (e.g. -- voo) and buy options deriving from it.
- wocram 10y agoHow are you losing more on leveraged ETFs than options? I can't imagine options are always the correct choice for taking a long delta position.
- lisper 10y agoBecause win or lose you have to pay the loan shark.
- csomar 10y agoIf you are trading futures, you'll pay premium (though you can play the market sometimes and earn premium if you open/close early). However, for a long term position, and assuming efficient market the premium loss will be equal to the interest rate. A large difference will mean a SWAP arbitrage opportunity. So no, there is no loan shark. You are getting a privilege (margin liquidity) and it has some real risks (default on the base loan, and the loan shark kissing his money good bye)
- lisper 10y agoYou're right, I misread the question. Leveraged ETFs are better than options. However (and this is really the point I was hoping to convey) they only help you if you guess right. If you don't, they hurt more than they help. This is because, win or lose, you have to pay the interest on the leverage, and that can cost you a point or two in alpha. So you have to be able to guess right >50% of the time just to break even, and very few people are able to do that consistently. The problem with options and futures is that they tend to be thinly traded and so you lose on the spread. The net result is the same: unless you guess right with odds better than chance, your net alpha will be negative.
- cjjuice 10y agoWarning: I am not an expert, do your own research. I would sell around 32 delta out of the money put on SPY. You have around a 68% chance to make a profit. This is a naked position so you need to understand that it has undefined risk. You could cover yourself by buying a further out the money put. My investment philosophy pretty much coincides with the tastytrade.com guys. If you want to learn more, I would checkout dough.com and do the free course on there.
- m3kw9 10y agoI would just buy a good value stock that gets whacked and 2 days after trump wins, and hold for long.