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You're right. I would stake a large amount of money on it, though, if there were a good way to.
by _-___________-_ 7y ago
You're right. I would stake a large amount of money on it, though, if there were a good way to.
- khuey 7y agoGiven the reaction of equity markets that seems like one option for you to "put your money where your mouth is" so to speak.
- _-___________-_ 7y agoThe problem is determining for how long people will continue to overreact. We're still at the point where a single confirmed case in a country that didn't have any before is international news and triggers more panic, as if the virus somehow cared about political constructs like country borders. You could easily have a long tail of these that can easily be spun into news about the continuing spread of the virus.
- smallgovt 7y agoIf you really believe what you're saying, don't worry about timing the bottom. You're arguing that the current state of the markets is already a huge overreaction. Just buy into an index tracking one of the hard-hit sectors, and hold through the panic. If this is an overreaction, there's no way the panic's going to last many years, so you won't risk insolvency.
- _-___________-_ 7y agoWell said, thanks for the perspective.
- _jal 7y ago> as if the virus somehow cared about political constructs like country borders The virus may not care, but it doesn't fly planes, control customs, coordinate response or a bunch of other things. Borders and other political constructs have large effects on contagion.
- _-___________-_ 7y agoI haven't looked recently, but when the first wave of travel restrictions was being implemented, WHO, CDC and other public health authorities were saying that travel restrictions were unnecessary and ineffective.
- 411111111111111 7y agoWhich remains true. The only thing that would work is forced quarantine for all travelers for the hole incubation time so you could be absolutely certain they're not carrying that virus before letting them back into society. That wasn't going to happen, and anything else doesn't stop the virus from entering in some way. And even this could potentially be unsafe as the virus could potentially mutate. Honestly, anything but herd immunity with vaccine isn't going to cut it with an easily spread virus such as this. (Still not a guarantee, just highly likely to work)
- aylee 7y agoBuy a bunch of $SPY puts.
- wcoenen 7y agoWrong side of the trade, buying puts is like buying insurance; it's a bet that the price will go down further, while OP wants to bet that an overreaction has happened. You'd have to write puts (thereby earning the premium) or buy calls to bet in the other direction. (Incidentally, it's not just about direction. Option bets require you to be also right about magnitude and timing.)
- quickthrowman 7y agoYou could even sell puts or put spreads to pay for the calls. The volatility lately makes the timing and magnitude a lot less crucial for option trades.
- deleted 7y ago[deleted]
- smallgovt 7y agoThe travel sector has been hit the hardest, so you should buy into ETF's like XTN that track the consumer travel industry.
- quickthrowman 7y agoThere are good ways to do so. 4/17 2650 SPX puts are trading for around $6,000 in premium, 4/17 265 SPY puts are around $600 each if you want a more manageable sized contract. Check out the option chains to shop around for different strikes and expirations to find options that suit your risk tolerance and time horizon.
- quickthrowman 7y agoThe 4/17 2650 SPX puts are now worth about $26,500, up from $6,000 10 days ago. Did you put your money where your mouth was? I hope so!