fairity

35 ms·

331.
by fairity 6y ago
No idea how time value will trend, but I’m comfortable holding these contracts til expiration at which point I think the price will be sub 60. Could definitely be wrong - I just don’t see how! Investing isn’t my profession.
332.
by fairity 6y ago
Sounds like you're looking at the right contract. Option contracts are written to give the buyer the right to buy/sell 100 shares. So, the minimum investment for the $320 PUT is ~$24K. Contracts with lower exercise prices will
333.
by fairity 6y ago
There are long-dated puts that expire 1-3 years from now. In what world would this not calm down before then?
334.
by fairity 6y ago
You can avoid the borrowing fee and margin call risk by purchasing PUT options. The $320 PUT expiring in 1 year costs $240. I purchased 2 contracts on Wednesday bc I don't see a scenario where the price doesn't crash back down
335.
by fairity 6y ago
Assuming the index is priced correctly, the fact that SPY is up 20% means the net present value of future cash flows for the largest companies on the exchange have increased through covid. In and of itself, there’s nothing unethical about
336.
by fairity 6y ago
Well, it's definitely a reward. But as I mentioned in my last reply, it's rewarding the wrong behavior if our goal is efficient price discovery.
337.
by fairity 6y ago
The process of shorting involves selling shares now with the intent of buying shares later. Price will drop in the near term bc you're increasing supply. In theory, without short selling, the market would still eventually arrive at t
338.
by fairity 6y ago
> Maybe I think Company G is worth $20 but not $40, but if you are selling it short at $5, and I'm prepared to be illiquid for a while, don't I send the correct market signal by squeezing you out of your short? In this example,
339.
by fairity 6y ago
RH and all brokerages should be held accountable for the losses their clients sustained due to these trade restrictions. But, I don't RH deserves to be singled out & vilified when many other brokerages ran into the exact same probl
340.
by fairity 6y ago
Shorting stocks, in general, is a beneficial action for the market because it helps prevent shares from becoming overvalued. I think this situation has actually highlighted the fact that shorting stocks needs to be easier. Currently, it&#x2
341.
by fairity 6y ago
Yea, it's objective in the sense that it's the net present value of all future cash flow. Many unknowns in that formula, of course.
342.
by fairity 6y ago
I don't understand the current lessons being drawn by the public from this situation. I don't think shorting stocks (even to 140% of its float) is a bad thing. And, the hedge fund managers that shorted GME don't deserve to b
343.
by fairity 6y ago
Greed is really only a problem when your actions ultimately hurt someone else. In general, shorting stocks is a beneficial action because it helps prevent shares from becoming overvalued. So, yea, the fact that GME had 143% of its shares sh
344.
by fairity 6y ago
Why is Robinhood getting singled out when six brokerages implemented the exact same trade restrictions?
345.
by fairity 6y ago
Well, the far-dated PUT options for GME have almost fully priced in the impending crash at this point. The $320 Jan 2022 PUT price is at $265. I imagine there's still +10% EV at that price, but it's not as compelling as yesterda
346.
by fairity 6y ago
It seems obvious that the claimed damages for the class action lawsuit would be much larger if sell orders were blocked. Since we know with certainty price will crash, claimed damages would increase by the share value of shareholders at ti
347.
by fairity 6y ago
And these "influential investors" also coerced Bank of America/Merrill Edge/the other 5 brokerages into implementing the same trading restrictions? Or, could it possibly be that these institutions implemented trading res
348.
by fairity 6y ago
Most people claiming that Citadel is pulling the strings seems to be missing the following facts: - Robinhood was one of many brokerages to implement trading restrictions. e.g. Bank of America/Merrill Edge also shut down buy orders fo
349.
by fairity 6y ago
Is there a source for the 40% figure? It seems to allude that the fund in question is Citadel.
350.
by fairity 6y ago
> It is for sure GME will hit 30 May I suggest you look into purchasing long-dated GME puts then? The price for the $320 GME PUT expiring in 1 year is $240.
351.
by fairity 6y ago
How is Robinhood in danger through all of this? My understanding is they make money by selling order flow. If anything, they're losing money by halting trades?
352.
by fairity 6y ago
I agree there are some retail traders who are going in with eyes wide open. However, due to the power of greed, a significant portion is not. And, the end result will be people losing their retirement income. So, the difference between yo
353.
by fairity 6y ago
Yes, it's different insofar as the money you're losing in this protest is going directly into the pockets of the group of people you're protesting against. Very illogical way to protest.
354.
by fairity 6y ago
Slight miscommunication -- what's happening is they're preventing any new positions from being opened. You can close positions, whether short or long.
355.
by fairity 6y ago
My guess is they are staying silent to avoid legal liability in the case that the run-up continues onwards in a significant manner.
356.
by fairity 6y ago
> They are blocking buying, and only allowing selling GME, BB and others. How is this not evidence of a corrupted free market system? I can almost guarantee you that this decision was made to protect retail clients -- not as part of som
357.
by fairity 6y ago
I'm really confused why the general public is enraged at the brokerages' decision to stop new buy orders for GME. It's very clear that retail is going to lose their shirts in the end of all of this. By blocking new buy order
358.
by fairity 6y ago
>The expectation that GME will drop back down to Earth over that timeframe remains priced in. Yea, it does seem largely priced in, but perhaps not completely. If share price is $60 in 1 year, the ROI on that contract would be 9% -- so s
359.
by fairity 6y ago
Yea, it's definitely not a small amount, but at the same time, it seems like a very safe bet given the fundamentals of the underlying company. You're basically betting that the volatility will subside within 1 year. If you'r
360.
by fairity 6y ago
Agree 100%. I think the smartest bet here is buying put options that expire far out. Currently, the price of the $320 GME PUT expiring in Jan 2022 is $240. That's free money...

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