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jbenko_IHB

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There is very good opportunity to make serious cash assuming the volatility is there and there is a good chance that there will be.



The bill is being voted on and that is enough to rock the market either direction.



Strategy? Straddle stocks with high volatility, sit back and enjoy the ride.
 
Straddles are going to be extremely expensive right now, so I doubt that will work. The market trend is clearly down, but stocks are also deeply oversold. IMO the best strategy would be to wait for the bounce and short it off the 10-day moving average.
 
My heart can't take this stock market rollercoaster. I would rather sit on the sidelines and watch. I'll be happy if people can gain in this market, but I don't want to lose (and that's always a huge possibility).
 
Just curious?? Are most of you guys 100% Cash right now, or still heavily invested in the market? Anybody cut their losses in the past two weeks?
 
[quote author="blackvault" date=1223014325][quote author="IrvineRenter" date=1223005348]Straddles are going to be extremely expensive right now, so I doubt that will work. The market trend is clearly down, but stocks are also deeply oversold. IMO the best strategy would be to wait for the bounce and short it off the 10-day moving average.</blockquote>


Your strategy will work as well, but not sure why you think straddles won't work. You need 100% return in puts or calls to break even on a straddle. If they pass the bill, the market will likely shoot up pretty high and continue that trend short term, then come back down. If the bill doesn't pass, then the market will tank and continue that trend probably for a longer period of time. Looking at a 1 year window, stocks will continue to go down overall IMO.



If bill gets passed DOW will rise 800-1200 pts short term and then slowly trickle back down.

If bill gets vetoed DOW will fall 950-1400++ pts short term and then slowly trickle further down from there into a staggnant economy.



Each is enough for a 100%+ return IMO.



However, I think I will also use your strategy on probably AAPL or GE.</blockquote>


With the VIX being so high, the premium you will be paying for those options is going to be astronomical. Getting that 100% return is going to be more difficult than you might think.
 
[quote author="IrvineRenter" date=1223015730][quote author="blackvault" date=1223014325][quote author="IrvineRenter" date=1223005348]Straddles are going to be extremely expensive right now, so I doubt that will work. The market trend is clearly down, but stocks are also deeply oversold. IMO the best strategy would be to wait for the bounce and short it off the 10-day moving average.</blockquote>


Your strategy will work as well, but not sure why you think straddles won't work. You need 100% return in puts or calls to break even on a straddle. If they pass the bill, the market will likely shoot up pretty high and continue that trend short term, then come back down. If the bill doesn't pass, then the market will tank and continue that trend probably for a longer period of time. Looking at a 1 year window, stocks will continue to go down overall IMO.



If bill gets passed DOW will rise 800-1200 pts short term and then slowly trickle back down.

If bill gets vetoed DOW will fall 950-1400++ pts short term and then slowly trickle further down from there into a staggnant economy.



Each is enough for a 100%+ return IMO.



However, I think I will also use your strategy on probably AAPL or GE.</blockquote>


With the VIX being so high, the premium you will be paying for those options is going to be astronomical. Getting that 100% return is going to be more difficult than you might think.</blockquote>


IR - I have watched BV's trades in the Panda Challenge and although I would not recommend anyone else to try his straddle technique, BV seems to be very successful with them.
 
<em>Just curious?? Are most of you guys 100% Cash right now, or still heavily invested in the market?</em>



My CD finally matured and it moved successfully into a WaMu (still) liquid savings account....so all good there.



I just dipped my toes in and put 20K in two mutual funds....both of which are 25% off what they were when I got out of them last year.



I didn't want to risk any more than that, but I just couldn't resist doing something.
 
[quote author="awgee" date=1223016353][quote author="IrvineRenter" date=1223015730][quote author="blackvault" date=1223014325][quote author="IrvineRenter" date=1223005348]Straddles are going to be extremely expensive right now, so I doubt that will work. The market trend is clearly down, but stocks are also deeply oversold. IMO the best strategy would be to wait for the bounce and short it off the 10-day moving average.</blockquote>


Your strategy will work as well, but not sure why you think straddles won't work. You need 100% return in puts or calls to break even on a straddle. If they pass the bill, the market will likely shoot up pretty high and continue that trend short term, then come back down. If the bill doesn't pass, then the market will tank and continue that trend probably for a longer period of time. Looking at a 1 year window, stocks will continue to go down overall IMO.



If bill gets passed DOW will rise 800-1200 pts short term and then slowly trickle back down.

If bill gets vetoed DOW will fall 950-1400++ pts short term and then slowly trickle further down from there into a staggnant economy.



Each is enough for a 100%+ return IMO.



However, I think I will also use your strategy on probably AAPL or GE.</blockquote>


With the VIX being so high, the premium you will be paying for those options is going to be astronomical. Getting that 100% return is going to be more difficult than you might think.</blockquote>


IR - I have watched BV's trades in the Panda Challenge and although I would not recommend anyone else to try his straddle technique, BV seems to be very successful with them.</blockquote>


Meh...I pretty much gave up on that site. Not a very option friendly site. BTW thanks for your remarks.
 
BV, when are you available for lunch? I am a cross between you and IR when it comes to trading. I've done well, but made my mistakes, and I feel it never hurts to learn from another person.



BTW, the pandaless challenge blows. Trades don't go through for days, and even panda has admitted he would be upside down with his trades, which was the point.
 
I'm 90% invested, 10% cash. The 10% is in the last three weeks. Pulled out enough to have a crash pad if the vote goes negative and have taken an ugly beating the last month as oil and media has softened blasting my alternative energy and tech plays like Apple and First Solar.
 
[quote author="graphrix" date=1223044370]BV, when are you available for lunch? I am a cross between you and IR when it comes to trading. I've done well, but made my mistakes, and I feel it never hurts to learn from another person.



BTW, the pandaless challenge blows. Trades don't go through for days, and even panda has admitted he would be upside down with his trades, which was the point.</blockquote>


I'll PM you about it.
 
[quote author="blackacre-seeker" date=1223123088]Blackvault, if it is not a secret, what industries do better with Democrats and Republicans? Thanks!</blockquote>


Well there are industries that are favoroted by each historically. BUt you really just need to listen to their policies and agendas.



Dems = Education, Healthcare, Technology, Communication

Reps = Defense, Aerospace, Oil/Energy, Construction (lol too well causing a crash)
 
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