Let's assume price of a stock equals 100 at a certain date.
Now I short this stock, meaning, I have a contract that says that I will sell this stock for 90, and the counterparty just has the right to buy it at 90, by betting that the price will go to 90 within 90 days.
After 90 days it turns out the price is 89. Hoorah! By contract is worth -$1, being the difference of 90-89. My counterparty can obtain the stock at 89, but has a right to buy at 90. Anyone can see that is a rather non-productive proposition. So, the contract is dissolved.
However, the counterparty paid me $0.2 for that contract. Per put-option I am now 20 cents in the plus, and I can keep my stock.
The other situation is when the stockprice fails to go below 90. Say the price is 95. Then the counterparty, having paid me 20 cents, has the right to buy my stock for 90. So, in such a scenario, I stand to loose $5 per share.
It is even worse if you use leverage.
We can even go one step further. What happens if we combine put (the right to sell) and call (the right to buy) in a certain combination and size? Could it be used in such a way as to suppress the price? Knock down the price or even, pump the price? What if we could influence the price up (pump) and then down (dump)?
We do what JPMorgan and Bank of America are doing in the Gold and Silver markets. The paper casino.
Although, that is coming to an end, due to the fact that gold has become a tier-1 asset and before entering a trade, you have to show the goods.
Meaning Treasury gold, now on the books for about 45$ should be revalued. Not at 2000 but at 20.000 an ounce.
Anyways: almost all congressmen are in this business, and all they care about is their wallet. The silent story is all are in on insider trading.
The question then becomes: what is more dangerous? Congressmen who do insider trading and thus shorting in this case, or the fact that this is interpreted as betting against America.
I shorted quite a lot. Every time some black swan is about to occur in some area, a short is the way to go. After the panic has subsided, a put does nicely. It is called anti-cyclical. Does that mean I am anti-America? No, I am pro-my-wallet. It's about making fiat with just fiat, producing nothing. However, what I do with said unrighteous riches ... that is a different matter. Thát will determine the fruits to my tree, wouldn't it?
What you explained is a put option. Short selling is very different than buying a put option (although both investors are hoping the stock decreases in value)
Firstly, options trading is not for entry level investors. Maybe covered call options are OK for certain "non-sophisticated" investors under the right circumstances.
Likewise short-selling is not for the uninitiated, faint-of-heart or the thinly capitalized investor.
Short selling is selling a stock that you don't own. So if you sell 100 shares (that you don't own) at $100 you get $10,000 from the sale. If the stock goes to $89 and you buy 100 shares to cover your short position you have a profit of $1100 (less brokerage commissions). If the stock only goes to $95 and you buy 100 shares to cover your short, you make $500. However, if the stock price increases to $101 your broker will require you to have additional stock holdings (or cash) to provide sufficient margin for the short position at $101. You must always maintain sufficient margin at your broker with other stock holdings or cash so that if the broker needs to cover your position he can. Theoretically, your short sale has an unlimited downside if the stock continues to increase in value. Many short-selling novices have been "whipped" by an unexpected surge in the stock price and found that their broker covered their position because they did not have sufficient margin in the account at the time.
Excellent analysis. Help me understand …. “For accounting/valuation purposes” the US treasury is gonna “revalue” existing/vaulted government gold bullion? Can u give us some sauce on that?
It just seems too risky in today’s economic environment to place any trades on what will be 90 days out.
I prefer trading the FOREX market. I no longer trade the currency pairs, instead I focus on the SPX500 (S&P 500) and US30 (Dow Jones). I am trading what I believe the price of those indexes will be compared to the US Dollar. This can be done on 1 minute charts up to the Monthly chart…I trade on the 5 minute chart while using 15 minute, 30minute and 1 hour chart for the current bias (up or down movement of the US30), with my day starting out by looking at the 4 hour chart to glimpse the bigger picture. On many days I can make what used to be a 2 week paycheck before my first cup of coffee is gone.
It can be very risky and learning the skill and proper psychology will take time. But after burning a few small accounts, I did nothing but demo trading for over a year. Some friends I started learning with would criticize me for my demo trading, with a couple getting personal and nasty about it. Now? They just simply STFU when they see my profits.
Now I short this stock, meaning, I have a contract that says ...
Selling stock short (not a contract) and buying a put option (a contract) are not the same thing.
You are mixing concepts and creating a confused mess.
After 90 days it turns out the price is 89. Hoorah! By contract is worth -$1
No. If you sold the stock short, you are showing a positive gain of $11 per share.
If you bought a put option with a 90 strike price, when the stock was at $100 with only 90 days remaining, you probably paid less than $1 per share (less than $100 per contract) and are showing $1 per share value ($100 per contract) at expiration of the contract. You probably made a little money, given that you would have bought the option cheap. If you paid more than $1 per share for the contract, you lost money.
It has nothing at all to do with what the "counterparty" did, as the counterparty to ALL options contracts is the market maker, and not anyone else who bought options at the same time.
If someone sold short the 90 put option when the stock was at $100, then they would have had the exact opposite profit/loss that you had -- but that was just a coincidence. It was not BECAUSE of your trade.
The 3rd party was the market maker, which had a loss on your transaction (because you had a gain) and a gain on that other person's transaction (because they had a loss). The exchange is a bookie, just like a gambling bookie. They make money on the "juice," which is the time decay portion of the option premium in the options market.
However, the counterparty paid me $0.2 for that contract
Again, you have the entire concept convoluted.
If you sold stock short, you are paying interest to the brokerage house that lent the securities. Nobody is paying you anything.
If you BOUGHT an options contract, then YOU PAID the time decay premium, and again, nobody paid you anything.
Per put-option I am now 20 cents in the plus, and I can keep my stock.
Again, this is wrong. If you bought a put option, you have nothing to "keep" upon expiration. You do not own any stock and have no right to own any stock.
A put option is a contract that gives you the right to SELL stock at a specific price. It is nothing more.
Then the counterparty, having paid me 20 cents, has the right to buy my stock for 90. So, in such a scenario, I stand to loose $5 per share.
Again, you have it entirely wrong.
If the price falls from $100 to $95 and you shorted the stock, you made a profit of $5 per share.
If you instead had bought a 90 put option, and the stock is at $95 at expiration of the put contract, then the contract expires worthless. So, you lose whatever you paid for the contract, but nothing more.
It is even worse if you use leverage.
Both shorting stock and buying options ARE a form of leverage.
That's why you need a margin account to do either.
We can even go one step further. What happens if we combine put (the right to sell) and call (the right to buy) in a certain combination and size?
That's called a "straddle" or a "strangle," depending on how you do it.
Could it be used in such a way as to suppress the price? Knock down the price or even, pump the price? What if we could influence the price up (pump) and then down (dump)?
No. Not by you or me.
We do what JPMorgan and Bank of America are doing in the Gold and Silver markets. The paper casino.
Wrong. They are not fucking around with put options. At least, not on the scale you are thinking about.
They are using futures markets and probably creating money out of nothing to essentially naked short futures contracts, if they are manipulating the market (which they were found out to be doing in 2008 or so).
Actually, it was Lehman Brothers who was naked shorting the sliver market, which is the real reason they went bankrupt. Their short silver contracts were gifted to JP Morgan -- the main insider on Wall Street, along with Goldman Sachs.
Most people still don't understand just how shady that deal was.
Lehman was naked shorting sliver contracts with money they did not have. The whole thing blew up in their face, and they were bankrupt.
They essentially gifted those contracts (an asset) to JPM, and the rest of the company -- including the de facto printed money from the naked shorting -- went poof in bankruptcy.
If they had made money, they would have been dubbed "geniuses," even though they would have only been lucky. As it turned out, they were able to just fold up the company and walk away, pretending they never committed any fraud.
Anyways: almost all congressmen are in this business, and all they care about is their wallet. The silent story is all are in on insider trading.
Don't know about that, EXACTLY. I do think that many members of Congress engage in insider trading.
However, most of them are too fucking stupid to understand any of it, so they have brokers/trust fund managers who do it for them, most likely.
They probably have some sort of arrangement like Nancy Pelosi has. She is too stupid to do it herself, but she gives the insider info to her husband, who does know what to do.
Like back when Hillary Clinton supposedly turned $1,000 into $100,000 in cattle futures. She is too dumb to do that herself, but a corrupt broker can do it easily by manipulating brokerage account between two clients (the "donor" and the "donee," with Hillary/Bill being the donee in that case).
The question then becomes: what is more dangerous? Congressmen who do insider trading and thus shorting in this case, or the fact that this is interpreted as betting against America.
This "betting against America" concept is really stupid.
The markets are fueled by greed and fear. There are times when prices get too high and they must come down.
Shorting is a way to make a profit when the price has gone too high -- like bitcoin and everything else does, at one point or another.
I shorted quite a lot. Every time some black swan is about to occur in some area, a short is the way to go. After the panic has subsided, a put does nicely.
That seems like a really backwards way of doing it. BEFORE the black swan event, the time premium in the put option will be small. That is when you want to buy puts -- like George Soros did with MGM stock just before the 2017 Las Vegas shooting at Mandalay Bay, owned by MGM.
But AFTER the black swan, the time premium of put options will be HUGE, and that is when you want to exit the options, and (maybe) to go a short stock position. Though, that would be best protected by buying call options, too.
Does that mean I am anti-America? No, I am pro-my-wallet.
It means he knows something bad is coming and has information that the general US population doesn't have. His first move? To protect himself at the expense of taxpayers in the market. Or what am I missing?
Or he knows what we know and he’s taking advantage of that knowledge. We should all be shorting the stock market right now. It is about to go way way down. Part of the plan.
There's plenty of things to blast these shitbags for but this isn't one of them. Any one of you who have a portfolio of any size engages in hedging activities, knowingly or unknowingly.
Example, you hold 100k long, and are up big... instead of selling and creating a tax event that could turn a capital gain into an income gain, you would add a leveraged hedge to keep your gains if the market corrects.
It's not a short against the economy or anything else because the long is greater.
Source: I hold a lot of TSLA and trade in and out of TSLAQ all the time.
Betting real money on the country you were elected to represent to fail and pay you out is about as perfect an example bullshit I can think of. Large incentive to throw to get paid. There is a reason sports dont allow this. But nope, our government allows elected officials to burn the city so they can get rich.
I thought we wanted this to happen? All of the people cheering Putin, cheering on the BRICS "gold" currency to crash the dollar? Are they not true Anons?
When the captain of your ship starts wearing the life vest and starts blowing up the dinghy ...
Waiter? Check, please
Let's assume price of a stock equals 100 at a certain date.
Now I short this stock, meaning, I have a contract that says that I will sell this stock for 90, and the counterparty just has the right to buy it at 90, by betting that the price will go to 90 within 90 days.
After 90 days it turns out the price is 89. Hoorah! By contract is worth -$1, being the difference of 90-89. My counterparty can obtain the stock at 89, but has a right to buy at 90. Anyone can see that is a rather non-productive proposition. So, the contract is dissolved.
However, the counterparty paid me $0.2 for that contract. Per put-option I am now 20 cents in the plus, and I can keep my stock.
The other situation is when the stockprice fails to go below 90. Say the price is 95. Then the counterparty, having paid me 20 cents, has the right to buy my stock for 90. So, in such a scenario, I stand to loose $5 per share.
It is even worse if you use leverage.
We can even go one step further. What happens if we combine put (the right to sell) and call (the right to buy) in a certain combination and size? Could it be used in such a way as to suppress the price? Knock down the price or even, pump the price? What if we could influence the price up (pump) and then down (dump)?
We do what JPMorgan and Bank of America are doing in the Gold and Silver markets. The paper casino.
Although, that is coming to an end, due to the fact that gold has become a tier-1 asset and before entering a trade, you have to show the goods.
Meaning Treasury gold, now on the books for about 45$ should be revalued. Not at 2000 but at 20.000 an ounce.
Anyways: almost all congressmen are in this business, and all they care about is their wallet. The silent story is all are in on insider trading.
The question then becomes: what is more dangerous? Congressmen who do insider trading and thus shorting in this case, or the fact that this is interpreted as betting against America.
I shorted quite a lot. Every time some black swan is about to occur in some area, a short is the way to go. After the panic has subsided, a put does nicely. It is called anti-cyclical. Does that mean I am anti-America? No, I am pro-my-wallet. It's about making fiat with just fiat, producing nothing. However, what I do with said unrighteous riches ... that is a different matter. Thát will determine the fruits to my tree, wouldn't it?
What you explained is a put option. Short selling is very different than buying a put option (although both investors are hoping the stock decreases in value)
Firstly, options trading is not for entry level investors. Maybe covered call options are OK for certain "non-sophisticated" investors under the right circumstances.
Likewise short-selling is not for the uninitiated, faint-of-heart or the thinly capitalized investor.
Short selling is selling a stock that you don't own. So if you sell 100 shares (that you don't own) at $100 you get $10,000 from the sale. If the stock goes to $89 and you buy 100 shares to cover your short position you have a profit of $1100 (less brokerage commissions). If the stock only goes to $95 and you buy 100 shares to cover your short, you make $500. However, if the stock price increases to $101 your broker will require you to have additional stock holdings (or cash) to provide sufficient margin for the short position at $101. You must always maintain sufficient margin at your broker with other stock holdings or cash so that if the broker needs to cover your position he can. Theoretically, your short sale has an unlimited downside if the stock continues to increase in value. Many short-selling novices have been "whipped" by an unexpected surge in the stock price and found that their broker covered their position because they did not have sufficient margin in the account at the time.
"pro-my-wallet" love it
Also, thank you for the explanation. Those terms get confusing for me.
Excellent analysis. Help me understand …. “For accounting/valuation purposes” the US treasury is gonna “revalue” existing/vaulted government gold bullion? Can u give us some sauce on that?
It just seems too risky in today’s economic environment to place any trades on what will be 90 days out.
I prefer trading the FOREX market. I no longer trade the currency pairs, instead I focus on the SPX500 (S&P 500) and US30 (Dow Jones). I am trading what I believe the price of those indexes will be compared to the US Dollar. This can be done on 1 minute charts up to the Monthly chart…I trade on the 5 minute chart while using 15 minute, 30minute and 1 hour chart for the current bias (up or down movement of the US30), with my day starting out by looking at the 4 hour chart to glimpse the bigger picture. On many days I can make what used to be a 2 week paycheck before my first cup of coffee is gone.
It can be very risky and learning the skill and proper psychology will take time. But after burning a few small accounts, I did nothing but demo trading for over a year. Some friends I started learning with would criticize me for my demo trading, with a couple getting personal and nasty about it. Now? They just simply STFU when they see my profits.
Uhh ... that's not how it works at all.
Selling stock short (not a contract) and buying a put option (a contract) are not the same thing.
You are mixing concepts and creating a confused mess.
No. If you sold the stock short, you are showing a positive gain of $11 per share.
If you bought a put option with a 90 strike price, when the stock was at $100 with only 90 days remaining, you probably paid less than $1 per share (less than $100 per contract) and are showing $1 per share value ($100 per contract) at expiration of the contract. You probably made a little money, given that you would have bought the option cheap. If you paid more than $1 per share for the contract, you lost money.
It has nothing at all to do with what the "counterparty" did, as the counterparty to ALL options contracts is the market maker, and not anyone else who bought options at the same time.
If someone sold short the 90 put option when the stock was at $100, then they would have had the exact opposite profit/loss that you had -- but that was just a coincidence. It was not BECAUSE of your trade.
The 3rd party was the market maker, which had a loss on your transaction (because you had a gain) and a gain on that other person's transaction (because they had a loss). The exchange is a bookie, just like a gambling bookie. They make money on the "juice," which is the time decay portion of the option premium in the options market.
Again, you have the entire concept convoluted.
If you sold stock short, you are paying interest to the brokerage house that lent the securities. Nobody is paying you anything.
If you BOUGHT an options contract, then YOU PAID the time decay premium, and again, nobody paid you anything.
Again, this is wrong. If you bought a put option, you have nothing to "keep" upon expiration. You do not own any stock and have no right to own any stock.
A put option is a contract that gives you the right to SELL stock at a specific price. It is nothing more.
Again, you have it entirely wrong.
If the price falls from $100 to $95 and you shorted the stock, you made a profit of $5 per share.
If you instead had bought a 90 put option, and the stock is at $95 at expiration of the put contract, then the contract expires worthless. So, you lose whatever you paid for the contract, but nothing more.
Both shorting stock and buying options ARE a form of leverage.
That's why you need a margin account to do either.
That's called a "straddle" or a "strangle," depending on how you do it.
No. Not by you or me.
Wrong. They are not fucking around with put options. At least, not on the scale you are thinking about.
They are using futures markets and probably creating money out of nothing to essentially naked short futures contracts, if they are manipulating the market (which they were found out to be doing in 2008 or so).
Actually, it was Lehman Brothers who was naked shorting the sliver market, which is the real reason they went bankrupt. Their short silver contracts were gifted to JP Morgan -- the main insider on Wall Street, along with Goldman Sachs.
Most people still don't understand just how shady that deal was.
Lehman was naked shorting sliver contracts with money they did not have. The whole thing blew up in their face, and they were bankrupt.
They essentially gifted those contracts (an asset) to JPM, and the rest of the company -- including the de facto printed money from the naked shorting -- went poof in bankruptcy.
If they had made money, they would have been dubbed "geniuses," even though they would have only been lucky. As it turned out, they were able to just fold up the company and walk away, pretending they never committed any fraud.
Don't know about that, EXACTLY. I do think that many members of Congress engage in insider trading.
However, most of them are too fucking stupid to understand any of it, so they have brokers/trust fund managers who do it for them, most likely.
They probably have some sort of arrangement like Nancy Pelosi has. She is too stupid to do it herself, but she gives the insider info to her husband, who does know what to do.
Like back when Hillary Clinton supposedly turned $1,000 into $100,000 in cattle futures. She is too dumb to do that herself, but a corrupt broker can do it easily by manipulating brokerage account between two clients (the "donor" and the "donee," with Hillary/Bill being the donee in that case).
This "betting against America" concept is really stupid.
The markets are fueled by greed and fear. There are times when prices get too high and they must come down.
Shorting is a way to make a profit when the price has gone too high -- like bitcoin and everything else does, at one point or another.
That seems like a really backwards way of doing it. BEFORE the black swan event, the time premium in the put option will be small. That is when you want to buy puts -- like George Soros did with MGM stock just before the 2017 Las Vegas shooting at Mandalay Bay, owned by MGM.
But AFTER the black swan, the time premium of put options will be HUGE, and that is when you want to exit the options, and (maybe) to go a short stock position. Though, that would be best protected by buying call options, too.
Correct.
This the most thorough ive seen someone get rekt.
The $QQQ index as well!
Dasting!
u/#pepedetective
That's a stupid take.
Shorting the stock market is not "shorting the US."
It means he knows something bad is coming and has information that the general US population doesn't have. His first move? To protect himself at the expense of taxpayers in the market. Or what am I missing?
Remember his name when the time comes. Remember ALL of their names.
When the time comes....
Does he have dual citizenship? Asking for a friend.
Democrat.
Or he knows what we know and he’s taking advantage of that knowledge. We should all be shorting the stock market right now. It is about to go way way down. Part of the plan.
Nasdaq is way up right now. So it can go down a bunch and still be up for the year.
The way these assHats manage our Country and Our Money is it really surprising?
They are outing themselves—dark to light
Congress shouldn’t be allowed to trade while in office. Would be tough because they all know how to set up shell companies.
Democrat senator from Delaware since 2001
Welp, no Hall of Fame for this guy.
Just another Delaware scumbag!
There's plenty of things to blast these shitbags for but this isn't one of them. Any one of you who have a portfolio of any size engages in hedging activities, knowingly or unknowingly.
Example, you hold 100k long, and are up big... instead of selling and creating a tax event that could turn a capital gain into an income gain, you would add a leveraged hedge to keep your gains if the market corrects.
It's not a short against the economy or anything else because the long is greater.
Source: I hold a lot of TSLA and trade in and out of TSLAQ all the time.
Is that a taxable event?
Betting real money on the country you were elected to represent to fail and pay you out is about as perfect an example bullshit I can think of. Large incentive to throw to get paid. There is a reason sports dont allow this. But nope, our government allows elected officials to burn the city so they can get rich.
I thought we wanted this to happen? All of the people cheering Putin, cheering on the BRICS "gold" currency to crash the dollar? Are they not true Anons?
SQQQ shorts the top 100 nonfinancial stocks in NASDAQ.....
This is not insider trading. Anyway, he made this trade last month. It's now public, you can now join this trade if you wish.