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?
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.
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?
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.