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I'm just a little confused about this though. If everyone thinks the market will decline due to Trump, then doesn't the market actually decline? What I'm saying
by tgb 10y ago
I'm just a little confused about this though. If everyone thinks the market will decline due to Trump, then doesn't the market actually decline? What I'm saying is that apparently there were even more people making the opposite guess.
- celticninja 10y agoIrrational market.
- DrPhish 10y agoWithout trying to be snarky, this sounds like a post-hoc rationalization. How do you differentiate between an irrational market and a bad prediction? I'm honestly at a loss
- celticninja 10y agoI don't have an answer to that but I bet no one does regardless of whether you are an expert, trader, president or man on the street.
- jackmott 10y agothe prediction is still bad. if the prediction can't predict that the market is irrational.
- jakeogh 10y agononsense. The people making the predictions were just wrong.
- cderwin 10y agoOr a Trump victory was already priced into the market -- it doesn't necessarily mean people weren't bearish on Trump.
- mattnewton 10y agoMy theory is if you have real tradeable info/models that is worth more than ads on a blog you keep your mouth shut until the trade is done.
- jjawssd 10y agoThe invisible hand supports Trump
- elastic_church 10y agoIt is so so so much more nuanced than that. In one way, the more people that bought put protection on their stock portfolio created the bullish pressure that took weeks to unwind. (When you buy puts, the market maker is going long the stock as their own hedge. most akin to a bookie)
- tinytim69 10y agoIf you buy puts, MM sold puts and will sell shares against since he is holding a deltaLong position from selling his puts (he makes money if the underlying goes up and lose money if the underlying goes down (which is why you bought the put). To hedge that risk he would sell shares against the sold put so that the risk of the underlying move would be covered.
- elastic_church 10y agoyou're right, but yes the concept I'm referring to was staying delta neutral. When people close their put options before expiration, the MM's create buying pressure.
- crusso 10y agoI would differ with your use of the word "guess". The underlying dynamics of the market have supported the people who have been long on it.