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I agree with that but do you know you’re going to take a 20% hair cut? What if you get out of the market after it drops 6% at the bell tomorrow and then it goes
by empath75 7y ago
I agree with that but do you know you’re going to take a 20% hair cut? What if you get out of the market after it drops 6% at the bell tomorrow and then it goes up 1% the day after and 3% the day after that? Do you panic buy back in? What happens if someone finds out that a cheap readily available drug cures it and this whole thing is over in three weeks?
I’m extremely pessimistic about the market right now, but I’m more pessimistic that if I traded that I wouldn’t lose more money.
I’ve had a big chunk of my 401k sitting on the sidelines for months now. I’m going to wait to see how this virus thing shakes out then use it to buy back in after it looks like the worst is over.
Until then, there’s way too much uncertainty to try and trade this. I’m not retiring for twenty years. Whatever happens it should bounce back in 2-3 years or so.
- tempsy 7y agoWell of course I can’t predict the future but we kept hitting all time highs even well into the coronavirus outbreak in early Feb and it didn’t make sense to me. I didn’t think the rally had any more legs to it and bought puts to hedge. As the market kept going down I kept or trimmed the options. The point of using options is that I’m still holding a lot of my stock, so if it bounces back up then it’s just my options that lose value.
- dmoy 7y agoThe market is (or at least has been, cue zombie apocalypse or Japan) almost always hitting or near all time highs. Literally over 5% of days are all time highs. A full third of days are within 5% of the as-of-yet all time high.
- everybodyknows 7y agoRay Dalio gave an interview a couple of days ago in which he predicted insolvency for some sellers of just such far-out-of-the-money puts. Any ideas who these might be, beside hedge funds? In particular, anyone systemically important e.g. shadow banks ...
- deleted 7y ago[deleted]