Win / GreatAwakening
GreatAwakening
Sign In
DEFAULT COMMUNITIES All General AskWin Funny Technology Animals Sports Gaming DIY Health Positive Privacy
Reason: None provided.

Uhh ... that's not how it works at all.

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.

Correct.

1 year ago
1 score
Reason: None provided.

Uhh ... that's not how it works at all.

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 options exchange, 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.

Correct.

1 year ago
1 score
Reason: None provided.

Uhh ... that's not how it works at all.

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 options exchange, 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.

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.

Correct.

1 year ago
1 score
Reason: None provided.

Uhh ... that's not how it works at all.

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 options exchange, 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. 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.

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.

Correct.

1 year ago
1 score
Reason: None provided.

Uhh ... that's not how it works at all.

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 options exchange, 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, you lose whatever you paid for the contract, and 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. 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.

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.

Correct.

1 year ago
1 score
Reason: Original

Uhh ... that's not how it works at all.

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 options exchange, 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 experation. 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, you lose whatever you paid for the contract, and 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. 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.

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.

Correct.

1 year ago
1 score