cawacko
Well-known member
You’re describing a hypothetical. I’m asking about reality. What are the actual results from the trades you already made? You still have not listed the performance. If the strategy works, the numbers should be easy to show.
I predict that the S&P 500 will be well under 5,000 by September 30th
- Thread starter Walt
- Start date
I am describing what almost every professional trader of options does. It is not a hypothetical, it is one of the primary strategies.
I am up a bit. A lot of buying at $4.50 and selling at $7.50. I have some SPY 11/14/2025 $645 Puts that look like they may expire out of the money, which would put me back to zero. They are at $2.74, and I bought them at an average of $4.68. They have three weeks to come back in value, but I will not cry if they do not.
The point is not to make drips and drabs of money, but to be in the market when the big move happens. I am not turning down the drips and drabs, but that is not the thing I am looking for.
The working part of the strategy is in the future. If in the next 15 months there is a 10+% drop in the S&P 500, the strategy worked. Again, the point is not to make money all the time, but to be in the market when the big money is made.
Freddy Figbottom
Was it me?
that would mean building or creating.
parasitic soulless morons don't understand that.
cawacko
Well-known member
You still haven’t shown a net track record. Being “up a bit” for the moment doesn’t prove anything, especially when you also admit one expiration takes you right back to zero. A strategy that only works if a crash bails it out is not a strategy. It is waiting and hoping.
A strategy that only works if there is a drop in the market is a valid strategy.
cawacko
Well-known member
You just confirmed there is no current track record and the strategy only works if the market crashes. That was my entire point. Thank you for acknowledging it.
The word crash is a little vague. A 10+% drop in a 15 month rises would be what I would need to make money. Is a 10% drop a crash or a correction?
The basic strategy has worked. Derivatives traders have paid money for months to be in the market for the big win. Sometimes it works out, and sometimes it does not, but it is a valid strategy that has worked in the past. In fact, it is working right now in some part of the market.
Ever seen the Big Short, or read the book? Michael Burry was paying into Credit Default Swaps for two years before his big payday. I would argue he started too early, and could have made a much better return had he started later. Having said that, he did make a good return off a strategy that you claim never works.
cawacko
Well-known member
You still haven’t shown a verifiable track record, and that was the entire issue. If the future proves you right, great. Until then, I’ll stick with strategies that can be measured in the present.
OK, Michael Burry has a verified track record. He paid into a derivatives investment for two years, and then made a big win in the end.
I am not saying it will absolutely work, but it does work a reasonable amount of the time, and I think it will work for me. I believe the odds are in my favor.
Future returns cannot be measured in the present.
gfm7175
Mega MAGA
.... andddddddd now DOW is back up near its record high. So?
IBDaMann
Well-known member
You don't have to be so specific.
How big is "big", Nostradamus?
Doesn't that make you stupid? Only someone who is addicted to gambling would go all in on a gamble he believes he is going to lose.
Why don't you buy AFTER the correction? ... unless you don't actually believe any correction is forthcoming ...
I would definitely turn a profit by 10%.
I am not Nostradamus. What I look for is situations where the market misestimates the chances of something happening. I have no ability to find sure things. It does seem like the market will drop by 10% or more in the next 15 months.
No, there are two types of investments that I am making. I am making long term broad market investments, and short term investments. The long term investments can go up and down, but there is a very good chance that overall they will go up. Investing the short term investments into the market going down makes a good hedge against the long term investments, and also I believe will deliver some very nice short term gains.
It is a strategy that has made me a lot of money, and it is also a strategy that I do not see as being able to go wrong in an obvious way. The 90/10 split of my standard, long term investments would lose 50% even in the worst crashes in history. Even assuming I lose all my short term investments at the same time(not likely given they are hedging investments), I would still have over a quarter of my nest egg. That is more than enough to have a great retirement.
I am not all in on anything.
I do not like trying timing my long term investments. I time my short term investments, so if I try timing my long term investments that puts all my eggs in one basket. I do dollar averaging over a year, but other than that try to invest as early as possible with long term, standard investments. With my long term investments my strategy is best summed up by the advice, "it is not timing the market, but time in the market."
That being said, my system automatically has me investing after the correction. In a correction, my short term investments would make a lot of money. I would take half the short term profits and put them in the long term investments, after the correction.
With long term, standard investments, it should be all about removing emotion, intuition, and even thinking. Come up with standard rules that work, and stick with them.
I have been through so many corrections now, it is hard to even remember them all. And I know there are more coming.
And yet somehow, I have created a nice nest egg... Odd how that works.
IBDaMann
Well-known member
You are speculating that you will. You don't have a crystal ball. There is risk involved.
If it looks like a Nostradamus, walks like a Nostradamus, quacks like a Nostradamus, it's probably a Nostradamus.
Your predictions are all so vague and broad.
... and we have seen how good your judgement is in selecting those situations.
Why have you been referring to that as a "crash"? Why aren't you selling until that correction occurs? Your holding onto those stocks appears identically to you not believing the market is going to drop.
Nope. You aren't making any investments. I don't think you know what an investment is.
You are trading in the market. You are speculating, not investing. You are a speculator, not an investor.
The term of the speculation is irrelevant to it being speculation.
This makes no sense. If you believe that a large-scale market correction is coming, you would naturally sell everything, hold the cash that you have, and buy 100% after the correction.
No, I am calculating where my profit point would be. I believe I have better odds of hitting that then the market rates set.