All things STOCKS

[Thunder Good-Oil]

I’m cool with selling at $262.50 and buying at $225.

 

[Velo Vol]

BP ($31)

Is there a specific reason you say BP as opposed to XOM/XLE/other.

I've thought about energy. Despite oil falling from the high, there doesn't seem to be a lot of excess supply in the system.

OTH, if we do have a real recession with Chinese lockdowns, commodities could get slammed again.

 

[Thunder Good-Oil]

Is there a specific reason you say BP as opposed to XOM/XLE/other.

I've thought about energy. Despite oil falling from the high, there doesn't seem to be a lot of excess supply in the system.

OTH, if we do have a real recession with Chinese lockdowns, commodities could get slammed again.

No reason other than $30/share is cheap. And it was down a couple of percent.

 

[Velo Vol]

Interesting conversation here.

He says the economy is quickly heading toward a recession/disinflation (Q1 2023). However, the stock market and commodities have largely already priced it in. The main holdouts left to fall are oil and bond yields. He doesn't see any huge financial distress, so the recession should be a "normal" business cycle one, not a global meltdown.

 

[Thunder Good-Oil]

UAL is another low share price stock, we’ll off the 52-week high, and an IV over 60.

Lost a ton of money (almost $4/share) - but that’s a direct result of COVID.

 

[Thunder Good-Oil]

I think that these single stock ETFs that are slowly rolling out will seriously ramp up the volatility of the stocks they short or leverage.

AAPD
AAPL
AAPU
SARK
TSLL
TSLQ
TSLS

Stocks that will be affected:
AMC
ARKK
BYND
COIN
GME
HOOD
MSTR
NKLA
NVDA
PENN
PTON
PYPL
TLRY
TSLA

And BITI shorts Bitcoin.

AAPL is the only symbol with implied volatility near 30. Most are triple digit.

 

[tbh]

Interesting conversation here.

He says the economy is quickly heading toward a recession/disinflation (Q1 2023). However, the stock market and commodities have largely already priced it in. The main holdouts left to fall are oil and bond yields. He doesn't see any huge financial distress, so the recession should be a "normal" business cycle one, not a global meltdown.

If what he says proves true in the future (w.r.t. the priced-in part and relative smoothness), that'd be swell! That said, if/when the oil and bonds come around, won't that (at least in the short term) drag stocks lower, if for no other reason than people seeing red arrows pointing downwards and freaking out?

 

[Thunder Good-Oil]

The stock gods are doing their best to push me onto the options sidelines. The two underlying stocks that I use the most are MSTR and NVDA.

The billionaire MSTR chairman and former CEO is being accused of tax fraud in DC. They are going after the company as a co-conspirator. It really shouldn’t matter. They are only going after him for low 8 figures (a multiple or 2 of $10 million). But it is a bad look and the shares are getting blasted. Don’t get me started on municipal and state income taxes on individuals.

Now NVDA news just breaks that they have some sort of downward guidance / licensing issue. So that stock is getting blasted as well. At least my MSTR covered call (262.5) is safe - little consolation.

I can write covered calls, but that’s not attractive with the stocks crashing. I guess I still have some cash in the account to write a few more puts. More likely, I’m slowing my roll for a good while.

Remember - depressed regular IRA balances create a better opportunity to convert them to Roth IRAs. You can do partial conversions as well. The entire account does not have to convert. Specific investments can be selected.

 

[tbh]

The stock gods are doing their best to push me onto the options sidelines. The two underlying stocks that I use the most are MSTR and NVDA.

The billionaire MSTR chairman and former CEO is being accused of tax fraud in DC. They are going after the company as a co-conspirator. It really shouldn’t matter. They are only going after him for low 8 figures (a multiple or 2 of $10 million). But it is a bad look and the shares are getting blasted. Don’t get me started on municipal and state income taxes on individuals.

Now NVDA news just breaks that they have some sort of downward guidance / licensing issue. So that stock is getting blasted as well. At least my MSTR covered call (262.5) is safe - little consolation.

I can write covered calls, but that’s not attractive with the stocks crashing. I guess I still have some cash in the account to write a few more puts. More likely, I’m slowing my roll for a good whole.

Remember - depressed regular IRA balances create a better opportunity to convert them to Roth IRAs. You can do partial conversions as well. The entire account does not have to convert. Specific investments can be selected.

That is great info to know...I may need to put a call in to my adviser about that in the next day or two for some details on how to make that happen. Thanks, TG-O!

 

[Thunder Good-Oil]

That is great info to know...I may need to put a call in to my adviser about that in the next day or two for some details on how to make that happen. Thanks, TG-O!

Yep. Even if $10,000 is converted to a Roth and the taxes are a couple thousand dollars, if the $10k doubles 7x it becomes $1,280,000 and none of the gain is taxable (under the current tax code). At 12%, it doubles every 6 years. 42 years to reach $1.28M. 15% doubles 7x in 34 years.

 

[Velo Vol]

I think that these single stock ETFs that are slowly rolling out will seriously ramp up the volatility of the stocks they short or leverage.

I hadn't heard of these until your post. Read a little about it and took a brief trip down the rabbit hole of leveraged ETFs. Nice idea if you could avoid holding during the bear markets.

 

[Velo Vol]

Something strange going on here.

 

[Velo Vol]

 

[Thunder Good-Oil]

I hadn't heard of these until your post. Read a little about it and took a brief trip down the rabbit hole of leveraged ETFs. Nice idea if you could avoid holding during the bear markets.

There are 3 types.

1). Leveraging the underlying stock.

2). Shorting the underlying stock. The advantage with this is that any loss is capped at the cost of buying the ETF. If shorting a stock directly the potential liability is theoretically unlimited.

3). There is a 3rd type that I need to research to see what it is. There are 3x single stock ETFs for AAPL and TSLA. The 3rd is either a different level of leveraging (2x or 3x) or it is just the same as one of the other two but offered by a different ETF company.

There are also ETFs that track the typical indexes but you can customize your investment in the ETFs by excluding specific company’s stock. I haven’t checked them out.
===============
You can also invest in the companies that package ETFs:

BlackRock (BLK): iShares
~~~~~
State Street (STT): SPDRs (“Spiders”), DIA (“DJIA Diamonds”), SPY (“S&P 500 Spider”), Select Sector S&P 500 ETFs
~~~~~
Invesco (IVZ): PowerShares, QQQ
~~~~~
Schwab (SCHW)
~~~~~
Vanguard is a mutual company. It is a not-for-profit that is owned by and for the benefit of its clients.

 

[Velo Vol]

Several months ago someone posted about that plan that has a 60/40 portfolio of leveraged stock/bond funds.

I read about it and backtested over the last 20 years it looked very good--well outperforming the market.

Well, this year would have a disaster, as both stocks and bonds declined at the same time. Ouch.

 

[mrorange211]

Edit: That being said, I'm super bullish for the remainder of the week and have 0DTE calls on SPY at $405 expiry 9/2.

 

[mrorange211]

Literally millions pouring into puts right now. This level for the market is massive. God next week is going to be epic.

EDIT: Something you guys also need to be aware of is that the week of Sept 12-16 will bring CPI, the restriction of buybacks until 2023, and real QT happening.

 

[Thunder Good-Oil]

Got to love Septembers.

 

[walkenvol]

Literally millions pouring into puts right now. This level for the market is massive. God next week is going to be epic.

EDIT: Something you guys also need to be aware of is that the week of Sept 12-16 will bring CPI, the restriction of buybacks until 2023, and real QT happening.

Epicly up or down?

 

[mrorange211]

Epicly up or down?

I think we turn majorly down by Sept 15-16. Im in calls for tomorrow.

EDIT: By second week of SEPT

 

[Velo Vol]

Is this another day when a better than expected jobs report is "bad" news on the street?

 

[Velo Vol]

Is this another day when a better than expected jobs report is "bad" news on the street?

Never mind, pretty close to expectations.

 

[mrorange211]

Looks like we are gonna rip today based on ?

 

[Velo Vol]

Looks like we are gonna rip today based on ?

I don't know about ripping, but decent, non-inflationary jobs report is evidence of a softer landing.

 

[Firebirdparts]

Several months ago someone posted about that plan that has a 60/40 portfolio of leveraged stock/bond funds.

I read about it and backtested over the last 20 years it looked very good--well outperforming the market.

Well, this year would have a disaster, as both stocks and bonds declined at the same time. Ouch.

Please understand here that there one obvious thing that everybody knows causes stocks and bonds to be correlated with each other: And that is the cost of money. When interest rates are going up, and the Fed is tightening, you'd expect both to go down. Long term bonds go down a lot more than short term. That's exactly what is happening this summer. One thing you could do is to look at right now as a good time to "start," but it's a very volatile strategy, and the truth is, we don't really know what is going to happen to inflation and interest rates. We think we know. Another thing you could do is avoid using long term bonds, and you could even use cash, but I think the time to do that was already. But again, we don't really know the long term destination for interest rates. We think we know.

The traditional way to run this strategy is with UPRO and TMF as they are liquid and the volatility "decay" seems to actually be pretty harmless in a long term hold. The performance of these two in a long term hold was truly about 3X their benchmarks until 2020. That was a bit of a surprise after the invention of 3X ETF's. They were very heavily labeled with warnings about decay. UPRO has decayed some in the 2020-2022 period.