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Dwight Eisenhower posted:Seriously someone talk me out of selling these CZR puts I'm up over 100% after a day on. I sold my $9.5 4/3 puts at about +700%. Currently hanging onto my $7 9.17 puts.
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Mar 12, 2020 18:47
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KYOON GRIFFEY JR posted:no do not do that Man, maybe we should quarantine the "don't think just buy" thread. Downside protection to reduce heightened risk is an appropriate part of long term and retirement investing. Purchasing puts is a decent way to get that insurance. Closing your eyes and ignoring the news is not. If another 30% down from here means he is gonna be on a catfood budget till he dies, buying some protection against that could be appropriate. Just don't firesale everything. If the puts expire worthless, he can offset those losses against all those long term gains he is cashing in, and maybe even take some 3k/year writeoffs. This is not a financial market driven, cyclical event. This is a once in a 100 years pandemic that the experts say will get much worse. That being said, I have a hard time adding to my puts today, this is crazy.
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Mar 12, 2020 18:48
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On the one hand, after 2 huge down days surely we’ll have a snap back rally tomorrow. On the other hand, the last 2 Fridays have been down though with buying into the close.
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Mar 12, 2020 18:53
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Buy and hold usually works, but this time it's different
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Mar 12, 2020 18:54
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if you're 72 years old you should be holding ~25 equities, MAX as part of your portfolio. assuming his dad is in 100% S&P 500 index trackers which would be down about 20%, and have made a $35,000 paper loss, his dad had about $175k in equities, which means he should have another $525K in bonds and other low risk equivalents. that's enough to draw off of bonds for a very long time. the market will rebound and his dad will be in fine shape if he holds. if dad is for some reason holding 100% equities as a 72 year old retiree he's hosed no matter what because he makes very, very bad decisions. buying some puts out of free cash to hedge against downside risk is probably fine, but not really necessary for him to do.
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Mar 12, 2020 18:55
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If there is no economy running poo poo is going to be brutal
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Mar 12, 2020 18:55
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numberoneposter posted:im like 90% down lol at least i only started with 10k welp its been fun maybe ill check back on them in 10 years But this is only your fun money right? So who cares?
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Mar 12, 2020 18:58
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Okay, dumb question time. On the excellent advice itt, I bought a few CZR puts. Low and behold, this has worked out ok. Thinking about selling my 3/27 $10.5P. Intrinsic value is ~$2.15 right now + whatever time value I may have. But, obviously this is low volume and high spread. I've tried selling for around $2.5 or so, no buyers (yet). Bids are around $1.9 it looks like. If I'm interested in locked in gains today on this single put, am I just better off actually exercising this? edit: never mind, it sold. java fucked around with this message at 19:45 on Mar 12, 2020 |
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Mar 12, 2020 19:04
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Let's talk vertical spreads, specifically on SPY. If you write an option, your downside is ~infinite and your upside is the premium you collect. If you write a call, you can cover that with owning the underlying, but a 100-lot of shares of SPY right now are ~$25,500 to cover one contract. An alternative is to buy a corresponding call further otm to the one you sell, e.g. you WRITE a 270 strike, and you buy a 280 strike on the same expiry. Because the 270 call is more expensive than the 280 call, you still collect money, but part of what you're collecting goes to buying that 280 call so your profit's muted. However, your downside is capped way lower: If the spread expires under 270, you pocket the full premium. If it expires above 280, you lose $1000 / contract ($10 * 100 shares of you buying at 280 exercising your long options and selling them at 270 to whoever you get assigned to). Okay, if you're a bear and you know your downside is now capped, where should you set the strikes and what price should you accept? If you play 270 and 280 today, you can get a spread of ~$4-4.5. That means you collect $400-450 / contract. You stand to lose $550-600 / contract. Your best profit is 60% of your capital at risk. What if you play 240/250? Now you collect premium of ~6.25 to open. You only have $375 at risk per position. If that same spread drops to 2.5, you've made 100% profit on your position. Of course, you're on the losing end of your spread as soon as you open it; so you need to be more confident the market's gonna drop (specifically, under 240). But like most good option plays, you don't need to hold to expiry, you just need to get a good opener and then have a limit in force to capture profit as soon as the market gets to favorable conditions for you. You won't get the high flying 10-bagger out of this unless you go way ITM, but you can set it up so you have a pretty good chance of doubling your money. You could write a 190/200 for 8.92 right now. If it drops to 7.84, you can buy it back and you've doubled your money. That's still a big if. Dwight Eisenhower fucked around with this message at 19:07 on Mar 12, 2020 |
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Mar 12, 2020 19:04
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Hell yeah, 11% over 3 years, love to return the equivalent of a mortgage
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Mar 12, 2020 19:10
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I should have invested all my money in pallets of hand sanitizer. Even without gouging I could have made so much money! This is all your fault.
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Mar 12, 2020 19:13
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paternity suitor posted:Hell yeah, 11% over 3 years, love to return the equivalent of a mortgage Long term historical averages vs a fairly arbitrary time period? UK has just abandoned efforts to contain. Estimated infections 10x to 20x higher than confirmed tested cases. Edit: upon further reading it sounds like it means like they’re just starting to adopt more restrictive measures like Italy. Also “allowing schools to teach larger classes and truck drivers to work longer shifts”.. lol Nothing but margin calls at work today. Serendipitaet fucked around with this message at 19:37 on Mar 12, 2020 |
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Mar 12, 2020 19:17
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Dwight Eisenhower posted:Seriously someone talk me out of selling these CZR puts I'm up over 100% after a day on. Guys. I hosed up. Bad. In my excitement to short Caesar's I missed a big loving thing. So Caesars is supposed to merge with El Dorado gaming ($ERI) in June, which I completely forgot about. I looked up the deal, which is approved by the shareholders and is pending regulatory approval. The deal is basically per share of $CZR stock you get $8.40 in cash PLUS 0.09 shares of El Dorado gaming. El Dorado is a trading at $17, down from $70 two months ago. It basically shakes out to $9.93 at current prices. Obviously, CZR is trading lower because there's a risk the deal does not go through. So the current stock price of CZRs is the value of the stock without the deal would be today, which was like $8.50 last May before they made the deal, plus the percent chance the deal goes through with that $9.93 price. Here are the warning signs that I see that the deal is going to fall through. 1) El Dorado is a relatively tiny casino company (2.5B in revenue and 5B in debt) with casinos in mid to low tier markets in the USA merging with a much larger and well known casino company. The deal doesn't really make sense unless Caesars stock holders want out fast. 2) El Dorado agreed to merge with Caesars and secured funding of $17 billion to buy Caesar's outstanding debt from a variety of banks / leveraged buyout finance types 3) El Dorado hasn't filed their 10-Q for 4Q 2019 yet for some reason and it's a month later than when they normally file it. 4) El Dorado has sold 6 casinos in the past 3 months (1/4 of their casinos) for around $500 mil in cash and they only had $250 mil in cash on hand. They may have trouble financing the deal. 5.) El Dorado's stock price is down 32% today and down 75% (!) since Feb 20th. Either Caesars or El Dorado can unilaterally back out of the deal up until June, though there is a 400 mil penalty for El Dorado. There's also a penalty for Caesars if they backed out but that wouldn't happen because free money lol.
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Mar 12, 2020 19:23
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Big bounce tomorrow, before continuing the slide down?
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Mar 12, 2020 19:26
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Very curious what the last half hour of trading will be like today.
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Mar 12, 2020 19:27
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RCL now $32 per share. Was at $135 before this virus. Just unreal.
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Mar 12, 2020 19:31
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Princess is mothballing its fleet for like 60 days or something.
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Mar 12, 2020 19:33
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So many people hitting the unemployment line from this.
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Mar 12, 2020 19:36
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I think the price for $CZR without the deal would be around $3-4 and with the deal should be $9-10. Considering this is a binary result, the prices of puts of $3-4 after June 2020 and puts up to $7 after June 2020 should be really wonky and their Greek letters should be significantly different that usual. (They can also extend the deal without penalty to Dec 2020)
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Mar 12, 2020 19:36
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Lote posted:Guys. I hosed up. Bad. In my excitement to short Caesar's I missed a big loving thing. welp that helped me make up my mind still made cash, thanks dude!
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Mar 12, 2020 19:39
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Yo, this is nuts. There are absolute generational opportunities out there right now. BGS? Are people not buying food now???
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Mar 12, 2020 19:39
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The Dec 18 low is the last support before this thing goes free falling into a full on depression, another $500bn and overnight to think about how much indexes fell today should see a bounce tomorrow, might go back in on longer puts then as by end of April the really grizzly news will start coming out of Superdome field hospitals and the like
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Mar 12, 2020 19:39
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KYOON GRIFFEY JR posted:if you're 72 years old you should be holding ~25 equities, MAX as part of your portfolio. assuming his dad is in 100% S&P 500 index trackers which would be down about 20%, and have made a $35,000 paper loss, his dad had about $175k in equities, which means he should have another $525K in bonds and other low risk equivalents. that's enough to draw off of bonds for a very long time. Okay thanks man. Gonna see what his portfolio looks like.
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Mar 12, 2020 19:41
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greasyhands posted:Yo, this is nuts. There are absolute generational opportunities out there right now. BGS? Are people not buying food now??? I think it's a bit more complicated with them: https://www.fool.com/investing/2020/03/02/is-this-14-yielding-food-stock-worth-the-risk.aspx TL;DR if I'm reading it correctly: They're super leveraged to support their weird buy-out business model, which had them in rough shape even before a looming financial crisis. fart barterer fucked around with this message at 19:45 on Mar 12, 2020 |
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Mar 12, 2020 19:43
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Kal Torak posted:RCL now $32 per share. Was at $135 before this virus. Just unreal. The FOMO on not buying puts on that one is real.
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Mar 12, 2020 19:44
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Is CLX still good? 50% wipes market, still flying off the shelves..
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Mar 12, 2020 19:44
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Lote posted:I think the price for $CZR without the deal would be around $3-4 and with the deal should be $9-10. Considering this is a binary result, the prices of puts of $3-4 after June 2020 and puts up to $7 after June 2020 should be really wonky and their Greek letters should be significantly different that usual. (They can also extend the deal without penalty to Dec 2020) So you'd say get out of our puts now?
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Mar 12, 2020 19:46
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androo posted:I think it's a bit more complicated with them: https://www.fool.com/investing/2020/03/02/is-this-14-yielding-food-stock-worth-the-risk.aspx I also have never heard of or used any of their products except Green Giant. Would not buy their stock.
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Mar 12, 2020 19:47
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Ur Getting Fatter posted:So I've been comparing CZR and SPY puts and it seems you make more money from DOTM SPY puts than from almost ITM CZR puts even after a the stock fell about 17% (compared to SPY's 7%) Yeah but spy you have a basket of equities. Some might even be up. So single security vs basket. With spy you're counting on contagion where all the stocks correlate.
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Mar 12, 2020 19:53
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Bored As gently caress posted:So you'd say get out of our puts now? I mean, it sounds like one private equity group that's bad at running a casino potentially merging with another group that doesn't know how to run a casino.
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Mar 12, 2020 19:54
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Inner Light posted:I also have never heard of or used any of their products except Green Giant. Would not buy their stock. Grocery store I stop at weekly was practically sold out of frozen veggies and all the value-added Green Giant stuff like the veggie gnocchi and poo poo. So who knows?
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Mar 12, 2020 19:55
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I just go to sleep to wake up to a massive crash around the world. Is anyone losing their house yet?
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Mar 12, 2020 19:56
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I closed half and made money. Might let it ride a little more here
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Mar 12, 2020 19:59
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Devian666 posted:I just go to sleep to wake up to a massive crash around the world. Is anyone losing their house yet? Unless Congress passes something like universal paid sick leave, a lot of service and hospitality and restaurant industry people are gonna be hurting super loving badly.
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Mar 12, 2020 20:00
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BUD is looking loving sexy right now. MO, also. I wonder if the market will grow numb to too more virus news at a certain point. Gold hasn't been as good as cash, so far.
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Mar 12, 2020 20:01
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Bored As gently caress posted:So you'd say get out of our puts now? I don't trade options so I don't know the terms, but it should change the way the options are priced. A put in 2021 for example would have two components going into the value, so the % chance that the deal goes through and the stock is worth exactly $8.40 + whatever value on the merger date and the % chance the deal falls through and the stock price goes to $3 or $4. I imagine this would change the value of those Greek letters but I would need to do some learnin' to tell you how. That said, I don't think the deal is going through and I'm still just shorting CZR. Also, if the downturn in casino revenue is big enough. CZR could run out of cash before the deal goes through. Edit: There is also the likelihood that El Dorado unilaterally backs out and takes the $400 mil hit if the downturn is bad enough. Basically, if things get bad and they go through with this merger, they might be instantly bankrupt. Lote fucked around with this message at 20:10 on Mar 12, 2020 |
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Mar 12, 2020 20:03
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Money is fairly aggressively coming out of bonds too, theres a cash pile building and we are going to rip higher so fast its going to make peoples heads spin right the gently caress off. China is almost fully back to work- this thing is going to ripple across the globe, do some damage, take a few old people off our hands, and disappear. We are in a mechanically broken market right now with a mechanically broken administration steering the ship
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Mar 12, 2020 20:05
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Devian666 posted:I just go to sleep to wake up to a massive crash around the world. Is anyone losing their house yet? They will be. A massive swath of the mortgage holders have no savings. If they are out of work, miss a paycheck, get hospitalized... well, hold on to your butts.
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Mar 12, 2020 20:10
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greasyhands posted:Money is fairly aggressively coming out of bonds too, theres a cash pile building and we are going to rip higher so fast its going to make peoples heads spin right the gently caress off. China is almost fully back to work- this thing is going to ripple across the globe, do some damage, take a few old people off our hands, and disappear. We are in a mechanically broken market right now with a mechanically broken administration steering the ship Sweet summer child
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Mar 12, 2020 20:11
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greasyhands posted:Money is fairly aggressively coming out of bonds too, theres a cash pile building and we are going to rip higher so fast its going to make peoples heads spin right the gently caress off. China is almost fully back to work- this thing is going to ripple across the globe, do some damage, take a few old people off our hands, and disappear. We are in a mechanically broken market right now with a mechanically broken administration steering the ship that cash is covering margin calls
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Mar 12, 2020 20:11
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