4 ms·

I asked ChatGPT how to profit from the impending AI stock crash. Oh, the irony

10 points by mmarian 2y ago

seadan83 2y ago
You can also: - sell vertical call spreads - sell naked calls - sell calendar spreads - short with a married put (not sure if this is correct name, it's opposite of a covered call. Buy 100 shorts and sell a put) Knowing the risk/reward profile of each is very key. Some of those plays are time sensitive (which makes them gambling). Investopedia is a great resource. Considering it was scraped for LLM traing, I would expect the gippity to do well with this question. I can't emphasize enough how important ig is to not only know the mechanics of a given strategy, but also to really know the risk reward profile and the profit/loss curve as a function of time and underlying price. Those those the REALLY important parts to know. What is more, if a person really is bearish, then if the underlying goes against you - you want to average down. The stop loss advice is bad. Which means instead of a stop loss on shorts, you buy more shorts. Just as when entering a long position, it can be good to only open an initial 25% at first so you have room to average down. If the play is good, you can expand the position still and also then put in stop losses to lock in PROFIT. OTOH, it is important to have an actual exit strategy so you don't just average down indefinitely too. Sigh, then there are yet more strategies that can be employed, not necessarily 100% bearish, and some of these strategies might be neutral or bearish. For example, buying an ITM bull put spread is a neutral strategy, it gains value with time as underlying stock price stays the same. There are also iron condor, where you buy both a bull put spread and a bull call spread. There can be variants of that as well by buying 2x of one compared to the other legs.
- mmarian 2y ago
  Jesus, this is quite a range of options. It's late where I'm at, I'll try to fully understand them tomorrow. But from a first glance they seem...very complex and risky for a beginner trader? Also I didn't mention in the post, but I did ask ChatGPT to come up with strategies that limit my losses.
  - mmarian 2y ago
    Just wanted to add that I appreciate the answer nonetheless. Let me know if there's someplace we can connect, I'm mostly on LinkedIn (see profile).
    - seadan83 2y ago
      I'm glad you found some value. I spent a bit too long on Reddit to really want to give a lot more investment tutorials anymore though. I'll entertain doing so at an hourly rate to teach you all about it though! (slightly tongue in cheek, but it is a legit offer for you, let me know and I could hit you up on linked in) Otherwise, I'll likely check back on this thread every few days, happy to entertain some more convo here for sure.
      - mmarian 2y ago
        To be honest, I'd like to ask you about stuff beyond the tutorials. Do you do this full time? How long did it take until you got to make enough for a decent living? Do you see any opportunities to start a self-funded business in this space, ideally related to software? For context, I'm well aware of the success odds. And I'm quite risk averse. The reason I'm looking into this domain is because I want to start some kind of business. What exactly? I don't know yet. What I do know is that I struggle to stay motivated working on ideas that don't genuinely interest me. Also to be totally transparent - I'd love to continue the conversation over LinkedIn / a call and buy you lunch / a beer (somehow?). But I can't afford paying the rate you're probably entitled to ask.
        seadan83 2y ago
        > Do you do this full time? No, I try to avoid even doing it part time now. When I was younger, I was spending a lot of time learning and researching, from 2009 to 2011 it was perhaps around 20hrs to 40hrs per week. > How long did it take until you got to make enough for a decent living? My biggest trading flaw in hindsight is lack of patience and too high a tolerance for risk. My original investments from 2006 to 2011, holding just about any of that until today would have been _huge_ payouts. In 2011 I learned about options and went all in on them. My life savings of $20k went towards it. It turned out well in the end, by shear super luck. Gambling that went from $60k, back down to $10k, where I then went all in on just AAPL and that position exploded with a 1200% profit - 10k turned into $120k in a week. I cashed that out & put a downpayment on property. That property did really well in terms of valuation (buying at a low price and then long term holding is just king). I didn't have enough money to invest again until about 2021. That did not go well. I lost approx $160k over a couple weeks, the majority of that in one day. IMO, what is the "right" way to do it? In essence, the goal is to put money in and forget about it for a good 10 years. This way you don't spend too much of your own time. You don't micromanage it, you don't sell too early, just forget about it. Though, you want to take advantage of compounding. Initially, amounts are small. Use your income as a constant additive value. That initial and persistent boost of equity, say as little as +$100/ week, will add up very quickly and will initially grow your account the fastest. Eventually, the overall portfolio will be equal to a lot more than just a few paychecks. That is where you when you want things to sit & simply grow for a years. 5, 10 years is really not that long of a period of time. Don't try to get rich quick, try to get rich gradually instead. Why do I recommend this over gambling? (I'll define gambling here as any type of trade that has an intended hold window of less than 3 months) Two reasons: (A) Gambling will be deceitful, you have good odds of winning, but the odds of hitting max profit are less than the odds of hitting max loss, and even then on favorable trades - you need an unreal level of consistency to come out ahead. The losses can sometimes be more rare, but are outsized. Lots of folk do the fun math of what happens when they make 10% on every trade, but they don't take into account that every 5th or 10th trade might be a 90% loss. (B) Your time. Gambling with a few hundred dollars might make you $1000 ~ $3000 without too much trouble. Though, for how much time/effort? To boot, you are more likely to lose everything. Which is to say, if you win - it'll be nice, but not life changing. If it is life changing, then you're gambling a lot (and either have rich parents, or really don't care if you lose a year or two of salary gambling). Regardless, my point is about the time commitment, it is stressful. In 2021, I could have burned $1 every 5 minutes for the entire year, and that still would have been better than what I wound up doing. > Do you see any opportunities to start a self-funded business in this space, ideally related to software? Certainly. Though, it's much better if you can figure out a way to be the person selling shovels compared to the people digging for gold. > Also to be totally transparent - I'd love to continue the conversation over LinkedIn / a call and buy you lunch / a beer (somehow?). But I can't afford paying the rate you're probably entitled to ask. Tempting :) I'll likely hit you up on linked in. Look for that in the next coming days.
hckrzulu 2y ago
Quite an interesting blog. I'd be interested in an rss feed... Does anyone know of any tricks to make/get one? Nothing in source, nothing in /rss or /feed.
- mmarian 2y ago
  Hiya! I'm the creator of the blog, really appreciate the feedback, it's actually made my day (and it's only morning!). I'll look into adding an rss as soon as I have some time. Looks like it should be pretty straightforward with Astro: https://docs.astro.build/en/guides/rss/ https://docs.astro.build/en/guides/rss/ Will post a reply when I have it on. Send me a message on LinkedIn (see profile) if you want me to DM you for an update.
  - mmarian 2y ago
    ...and the RSS is now live! https://learningquant.com/rss.xml https://learningquant.com/rss.xml (need to mention it on the website) Let me know if that works for you, it's my first time I've set up an RSS.
    - dkwr 2y ago
      I subscribed and it worked for me. I like your writing style. Short, concise and informative!
      - mmarian 2y ago
        Cheers, appreciate it!
        hckrzulu 2y ago
        Cool, thanks for adding the feed. Subscribed!

10 points by mmarian 2y ago

You can also: - sell vertical call spreads - sell naked calls - sell calendar spreads - short with a married put (not sure if this is correct name, it's opposite of a covered call. Buy 100 shorts and sell a put) Knowing the risk/reward profile of each is very key. Some of those plays are time sensitive (which makes them gambling). Investopedia is a great resource. Considering it was scraped for LLM traing, I would expect the gippity to do well with this question. I can't emphasize enough how important ig is to not only know the mechanics of a given strategy, but also to really know the risk reward profile and the profit/loss curve as a function of time and underlying price. Those those the REALLY important parts to know. What is more, if a person really is bearish, then if the underlying goes against you - you want to average down. The stop loss advice is bad. Which means instead of a stop loss on shorts, you buy more shorts. Just as when entering a long position, it can be good to only open an initial 25% at first so you have room to average down. If the play is good, you can expand the position still and also then put in stop losses to lock in PROFIT. OTOH, it is important to have an actual exit strategy so you don't just average down indefinitely too. Sigh, then there are yet more strategies that can be employed, not necessarily 100% bearish, and some of these strategies might be neutral or bearish. For example, buying an ITM bull put spread is a neutral strategy, it gains value with time as underlying stock price stays the same. There are also iron condor, where you buy both a bull put spread and a bull call spread. There can be variants of that as well by buying 2x of one compared to the other legs.

mmarian 2y ago
Jesus, this is quite a range of options. It's late where I'm at, I'll try to fully understand them tomorrow. But from a first glance they seem...very complex and risky for a beginner trader? Also I didn't mention in the post, but I did ask ChatGPT to come up with strategies that limit my losses.
- mmarian 2y ago
  Just wanted to add that I appreciate the answer nonetheless. Let me know if there's someplace we can connect, I'm mostly on LinkedIn (see profile).
  - seadan83 2y ago
    I'm glad you found some value. I spent a bit too long on Reddit to really want to give a lot more investment tutorials anymore though. I'll entertain doing so at an hourly rate to teach you all about it though! (slightly tongue in cheek, but it is a legit offer for you, let me know and I could hit you up on linked in) Otherwise, I'll likely check back on this thread every few days, happy to entertain some more convo here for sure.
    - mmarian 2y ago
      To be honest, I'd like to ask you about stuff beyond the tutorials. Do you do this full time? How long did it take until you got to make enough for a decent living? Do you see any opportunities to start a self-funded business in this space, ideally related to software? For context, I'm well aware of the success odds. And I'm quite risk averse. The reason I'm looking into this domain is because I want to start some kind of business. What exactly? I don't know yet. What I do know is that I struggle to stay motivated working on ideas that don't genuinely interest me. Also to be totally transparent - I'd love to continue the conversation over LinkedIn / a call and buy you lunch / a beer (somehow?). But I can't afford paying the rate you're probably entitled to ask.
      - seadan83 2y ago
        > Do you do this full time? No, I try to avoid even doing it part time now. When I was younger, I was spending a lot of time learning and researching, from 2009 to 2011 it was perhaps around 20hrs to 40hrs per week. > How long did it take until you got to make enough for a decent living? My biggest trading flaw in hindsight is lack of patience and too high a tolerance for risk. My original investments from 2006 to 2011, holding just about any of that until today would have been _huge_ payouts. In 2011 I learned about options and went all in on them. My life savings of $20k went towards it. It turned out well in the end, by shear super luck. Gambling that went from $60k, back down to $10k, where I then went all in on just AAPL and that position exploded with a 1200% profit - 10k turned into $120k in a week. I cashed that out & put a downpayment on property. That property did really well in terms of valuation (buying at a low price and then long term holding is just king). I didn't have enough money to invest again until about 2021. That did not go well. I lost approx $160k over a couple weeks, the majority of that in one day. IMO, what is the "right" way to do it? In essence, the goal is to put money in and forget about it for a good 10 years. This way you don't spend too much of your own time. You don't micromanage it, you don't sell too early, just forget about it. Though, you want to take advantage of compounding. Initially, amounts are small. Use your income as a constant additive value. That initial and persistent boost of equity, say as little as +$100/ week, will add up very quickly and will initially grow your account the fastest. Eventually, the overall portfolio will be equal to a lot more than just a few paychecks. That is where you when you want things to sit & simply grow for a years. 5, 10 years is really not that long of a period of time. Don't try to get rich quick, try to get rich gradually instead. Why do I recommend this over gambling? (I'll define gambling here as any type of trade that has an intended hold window of less than 3 months) Two reasons: (A) Gambling will be deceitful, you have good odds of winning, but the odds of hitting max profit are less than the odds of hitting max loss, and even then on favorable trades - you need an unreal level of consistency to come out ahead. The losses can sometimes be more rare, but are outsized. Lots of folk do the fun math of what happens when they make 10% on every trade, but they don't take into account that every 5th or 10th trade might be a 90% loss. (B) Your time. Gambling with a few hundred dollars might make you $1000 ~ $3000 without too much trouble. Though, for how much time/effort? To boot, you are more likely to lose everything. Which is to say, if you win - it'll be nice, but not life changing. If it is life changing, then you're gambling a lot (and either have rich parents, or really don't care if you lose a year or two of salary gambling). Regardless, my point is about the time commitment, it is stressful. In 2021, I could have burned $1 every 5 minutes for the entire year, and that still would have been better than what I wound up doing. > Do you see any opportunities to start a self-funded business in this space, ideally related to software? Certainly. Though, it's much better if you can figure out a way to be the person selling shovels compared to the people digging for gold. > Also to be totally transparent - I'd love to continue the conversation over LinkedIn / a call and buy you lunch / a beer (somehow?). But I can't afford paying the rate you're probably entitled to ask. Tempting :) I'll likely hit you up on linked in. Look for that in the next coming days.

hckrzulu 2y ago

Quite an interesting blog. I'd be interested in an rss feed... Does anyone know of any tricks to make/get one? Nothing in source, nothing in /rss or /feed.

mmarian 2y ago
Hiya! I'm the creator of the blog, really appreciate the feedback, it's actually made my day (and it's only morning!). I'll look into adding an rss as soon as I have some time. Looks like it should be pretty straightforward with Astro: https://docs.astro.build/en/guides/rss/ https://docs.astro.build/en/guides/rss/ Will post a reply when I have it on. Send me a message on LinkedIn (see profile) if you want me to DM you for an update.
- mmarian 2y ago
  ...and the RSS is now live! https://learningquant.com/rss.xml https://learningquant.com/rss.xml (need to mention it on the website) Let me know if that works for you, it's my first time I've set up an RSS.
  - dkwr 2y ago
    I subscribed and it worked for me. I like your writing style. Short, concise and informative!
    - mmarian 2y ago
      Cheers, appreciate it!
      - hckrzulu 2y ago
        Cool, thanks for adding the feed. Subscribed!