Originally posted by DigiNut
Holding equal numbers of FAS and FAZ puts makes you pretty bearish at this price differential. Better watch carefully and not wait too long to take profits on some of the FAS puts if the value goes up.
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can you explain why this is excessivly bearish. Two equal and opposite positions, that were (Almost) in the money?
mute79
it may be time to get into some inverse etfs.. the market is too heated right now, while the job numbers keep sliding
exstasie
quote:
Originally posted by mute79
it may be time to get into some inverse etfs.. the market is too heated right now, while the job numbers keep sliding
Are you investing in HIX?
I love that stock symbol lol
mute79
no, i think i'll go for the double exposure one
Nrg2Nfinit
today is a very good day for inverses. everything is tanking
Skipper
quote:
Originally posted by Nrg2Nfinit
today is a very good day for inverses. everything is tanking
It'll be up tomorrow, or next week..volatility is the new black
Nrg2Nfinit
this song is required for this thread
DigiNut
quote:
Originally posted by simms327
can you explain why this is excessivly bearish. Two equal and opposite positions, that were (Almost) in the money?
I wouldn't say excessively, but it is bearish. You have equal numbers of puts, but the FAZ puts are about half the price, so you're 2/3 invested in the bear fund. Assuming all options are at-money, it's the total equity in each that defines your position, not necessarily the number of contracts.
I actually have a few different puts and calls now, just slightly bullish overall, but roughly the same amount in FAS and FAZ. A neutral position would be (approximately) twice as many FAZ puts as FAS.
quote:
Originally posted by Nrg2Nfinit
today is a very good day for inverses. everything is tanking
Was a very good day, right up until about 3:50 PM. Plunge Protection Team haha.
I guess with my current positions I make out better on bull days, but the financials market really didn't deserve that last-minute recovery.
simms327
So, i cashed out on the FAS puts, bought at $1.06, sold at $1.50. wow, best return ever. now i need the market to go back up, so i can can move the FAZ puts...
DigiNut
quote:
Originally posted by simms327
So, i cashed out on the FAS puts, bought at $1.06, sold at $1.50. wow, best return ever. now i need the market to go back up, so i can can move the FAZ puts...
Well played! Since you probably paid about $50 for the FAZ puts, they're effectively free now, so it's all profit, just gotta ride it to the top (or the bottom in this case).
I paid almost $140 for the FAS puts when I got them, so I haven't seen enough of a gap to justify selling yet, particularly with this stupid sideways trading the past two days. Have to admit I'm pretty confused; the last time we saw the RIFIN flatline for two straight days was back in early March.
PCX has still been great for flipping, which has sort of made up for sucky financials. Once it hit $10 it became an options play, was able to make about 50% on some puts.
DigiNut
So simms, did you cut and run on the FAZ puts now that it got dinged below $5, or are you still holding on?
Looks like you had impeccable timing, could have brought home about 40-50% in under two weeks. Although maybe you're holding out for more. :thepirate
I've been finding that a position composed of short-term puts needs to be rebalanced at least once a week, at least with the 2 or 3 bizarre flat trading days we had recently. It's doable, but requires a little more TLC than I'd hoped. It seems that it's also possible to combine options with some of the popular day-trading strategies; today I was able to flip a set of FAS calls from $1.00 to $1.30, while adding FAS puts that only declined from $1.00 to $0.85 (arbitrage or just very odd?). Food for thought - if you're comfortable day trading the security, try day-trading the options instead.
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On a different note - NRG, are you still holding WTN (or did you ever pick it up)? I noticed it arced up to $1.60 today. It didn't falter either, it looked parabolic, so this might even continue into tomorrow.
