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Inevitably, whenever The Economist (or the press in general) latches onto a markets story, it's because everything is already in the price. Shorts should be tak
by vegabook 11y ago
Inevitably, whenever The Economist (or the press in general) latches onto a markets story, it's because everything is already in the price. Shorts should be taking profit here, because the journos are usually the last to know. Recall, this is the paper which wanted to sell gold at 300, and wanted to sell oil at 11.
- leoc 11y agoBet you $5.
- vegabook 11y agoBet me what? That SHANCOMP will go lower from here? And I assume you already know that your payout will be skewed: options price in a higher chance of downside than upside already so you should probably pay me $7 if it rallies against my $5 liability if it falls. Point is: this "China is tanking" idea is on everybody's lips and the surprise risk is now a rally.
- leoc 11y ago> our payout will be skewed: options price in a higher chance of downside than upside already so you should probably pay me $7 if it rallies against my $5 liability if it falls No doubt, but the market in Hacker News Shanghai Composite side-bets is not big and liquid so you may not be able to find someone to offer you $7, and if you're that confident in your thesis you should be willing to accept $5 in that case. ;) It's OK though, I'll go to $7. (I didn't downvote you btw.)
- vegabook 11y agoLooks like I owe you five bucks (as of 8am London time) ;-) Assuming $2.50 market in upvotes, duly upvoted you twice! ;(I'll wear two downvotes if you want to be strict about it).
- RachelF 11y agoIndeed - The Economist is a great contrarian signal. A month ago they ran a story about how well the Chinese market was doing. In my experience, they either latch on too late, or way too early.