Heads up for Wednesday, June 12: It's going to be a wild market day.
May CPI inflation data drops before market opens.
FED rate meeting decision and press conference in the afternoon.
Last week's employment data was a mixed bag:
Unemployment was up, more than expected -- asking FED to lower rates sooner.
But new jobs were also up, more than expected -- inflationary pressure, tempting FED to keep rates high.
Mr. Market is going to be wracked with fear and giddy with exuberance. He's schizoid like that. Anything and everything could happen. Especially when SPX is already trading at new-record levels.
My iron condors close on Tuesday. I don't want anything risky on the table when the walls and floor start shaking.
The market has been crazy for the past couple of weeks.
I'm glad you did well with NVDA; a couple of buddies and I were getting out at about the time you were getting in. We were following the old rule about doing the opposite of what everyone else seemed to be doing, or at least thinking. Predicting what the price will do tomorrow morning is a real toss up. This is my play-hobby account so I'm not worried about it either way.
WRT SPX, personally I see it falling, and I want to be in a position to watch it fall, which is why I was hesitant to buy even 1 share of anything priced at almost 1200/share.
The Indians will not bother you now, on account of ... you are touched.
sweetandsour wrote: 09 Jun 2024, 11:09
The market has been crazy for the past couple of weeks.
I'm glad you did well with NVDA; a couple of buddies and I were getting out at about the time you were getting in. We were following the old rule about doing the opposite of what everyone else seemed to be doing, or at least thinking. Predicting what the price will do tomorrow morning is a real toss up. This is my play-hobby account so I'm not worried about it either way.
WRT SPX, personally I see it falling, and I want to be in a position to watch it fall, which is why I was hesitant to buy even 1 share of anything priced at almost 1200/share.
Analysts are still confident and bullish on NVDA. I see no reason to reduce my position.
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I'm thinking about buying a straddle at the money on SPY today!
Looks like I can buy one put and one call (September expiration) for just under $3000. I could make $300 if the market drops in the volatility. Or at least $100 if it goes up. I might lose a bit (maybe $50) if Wednesday is more quiet than expected.
This is especially tempting as implied volatility (VIX) is rather low. This makes the options cheap, and their value will go up quickly as volatility spikes, even if there is not a large movement in the index.
When SPY was trading at 533 on Monday morning, I bought a straddle at 540. That little offset means that I expect the market to go down rather more than up. Cost = $2770.
I set a limit order to sell when price reaches $3075. Could be $300 profit, or a nifty 11% return on a 3-day trade.
CPI just dropped. Inflation is a snick less than expected. Annualized inflation is 3.3%, vs. 3.4% expected.
SPX futures leapt 30 to 40 points on the news. We'll see where it settles by market open.
So it begins....
====================
I was looking at my straddle on SPY yesterday. I decided that $300 profit is a bit too optimistic. I set it to close at $200 gain.
When the market goes up with exuberance, the volatility crushes down. Implied volatility on SPX futures crushed a whole point on the news, from 12.3 to 11.2. Volatility crush works strongly against my straddle. If this keeps up, I'll be lucky to break even.
BUT a bit of lasting exuberance would be GREAT for my IRA, so I'm not going to fret over this little trade.
I reckon that the market will likely drop this afternoon with the FED news. It could go up bit further, but I wouldn't miss much more in gain on this trade. But if it drops, it would have to drop a LOT for me to give up my hunnert profit on my call option, pass through a range of loss, and start showing gain on the put. Very low probability of reaching a gain greater than $100 on the drop from this high level.
So I had some fun, gained some cash, and learned a bit from this little trade. Nice play!
$104 gain ÷ $2770 principal = 3.75% gain on two-day trade.
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Okay... Now I'm feeling cocky.
I bought a put on SPY (September, Strike 555, as SPY was trading at 543.5, delta = 0.61). Paid $1663.
I put in an order to sell at $200 gain.
I expect this will trigger as SPY hits 540.5, as volatility increases and price drops.
I'm hoping for some sell-off with the FED news this afternoon, even if it is momentary and transient.
Worst case, I'll lose some of the $100 that I gained on the straddle. I'm playing with the house's money.
Whelp.... I didn't get the drop in market price or surge in volatility that I wanted. But I did get $78 in profit. So.... $104 + $78 = $182 cash gain on the volatility. Wheee! That's some beer money!
$78 ÷ $1663 = 4.7%.
So glad to see the market up, though. Everyone's IRA must be as happy as mine!
Del wrote: 12 Jun 2024, 12:23
Whelp.... I didn't get the drop in market price or surge in volatility that I wanted. But I did get $78 in profit. So.... $104 + $78 = $182 cash gain on the volatility. Wheee! That's some beer money!
$78 ÷ $1663 = 4.7%.
So glad to see the market up, though. Everyone's IRA must be as happy as mine!
Congrats on your trades. My one share of NVDA I bought at (ultimately) 119.0 is now 10 shares at 131.25. I guess I should have bought 2 shares. But my Fidelity SP500 is up as well. All remaining trading funds in this account are on the side waiting and watching.
The Indians will not bother you now, on account of ... you are touched.
Del wrote: 12 Jun 2024, 12:23
Whelp.... I didn't get the drop in market price or surge in volatility that I wanted. But I did get $78 in profit. So.... $104 + $78 = $182 cash gain on the volatility. Wheee! That's some beer money!
$78 ÷ $1663 = 4.7%.
So glad to see the market up, though. Everyone's IRA must be as happy as mine!
Congrats on your trades. My one share of NVDA I bought at (ultimately) 119.0 is now 10 shares at 131.25. I guess I should have bought 2 shares. But my Fidelity SP500 is up as well. All remaining trading funds in this account are on the side waiting and watching.
My 1000 shares of NVDA got called out of my IRA at 130 on Friday.
I'm thinking that I should buy back 800 shares. I'm just way overweight in NVDA now, due to the phenomenal growth.
I hate to reduce my position in a stock that's on a run, but that's the time to reduce it. Hurts a lot to wait until the stock is falling.
I'm overweight in CAVA too. I'll consider reducing that as well, next time it gets called out.
I'm increasing my position in Amazon. I think that retail stocks will do very well in the future, some months after Trump gets our energy and economic policies back in balance. AMZN has a strong position in global tech, cloud, and AI... so it's a bit like owning a mutual fund of all the hot sectors. Up 20% YTD, consolidating and poised to break out. A good long-term company to hold.
Del wrote: 12 Jun 2024, 12:23
Whelp.... I didn't get the drop in market price or surge in volatility that I wanted. But I did get $78 in profit. So.... $104 + $78 = $182 cash gain on the volatility. Wheee! That's some beer money!
$78 ÷ $1663 = 4.7%.
So glad to see the market up, though. Everyone's IRA must be as happy as mine!
Congrats on your trades. My one share of NVDA I bought at (ultimately) 119.0 is now 10 shares at 131.25. I guess I should have bought 2 shares. But my Fidelity SP500 is up as well. All remaining trading funds in this account are on the side waiting and watching.
My 1000 shares of NVDA got called out of my IRA at 130 on Friday.
I'm thinking that I should buy back 800 shares. I'm just way overweight in NVDA now, due to the phenomenal growth.
I hate to reduce my position in a stock that's on a run, but that's the time to reduce it. Hurts a lot to wait until the stock is falling.
I'm overweight in CAVA too. I'll consider reducing that as well, next time it gets called out.
I'm increasing my position in Amazon. I think that retail stocks will do very well in the future, some months after Trump gets our energy and economic policies back in balance. AMZN has a strong position in global tech, cloud, and AI... so it's a bit like owning a mutual fund of all the hot sectors. Up 20% YTD, consolidating and poised to break out. A good long-term company to hold.
I was buying and selling AMZN last summer when the price was ranging from 110 to 140-ish. Looking back in this thread to last July I see that I was buying at 126. I probably got impatient when the price got above 150 or so, and sold it all in order to go play with some other company. Now I'm tempted to get back in, like I did with NVDA. I'm not disciplined enough to be a successful trader, now, but I'm working on it.
When to sell NVDA, that's the current question. Well, that, and what's with the Christmas lights and snow flakes.
The Indians will not bother you now, on account of ... you are touched.
Congrats on your trades. My one share of NVDA I bought at (ultimately) 119.0 is now 10 shares at 131.25. I guess I should have bought 2 shares. But my Fidelity SP500 is up as well. All remaining trading funds in this account are on the side waiting and watching.
My 1000 shares of NVDA got called out of my IRA at 130 on Friday.
I'm thinking that I should buy back 800 shares. I'm just way overweight in NVDA now, due to the phenomenal growth.
I hate to reduce my position in a stock that's on a run, but that's the time to reduce it. Hurts a lot to wait until the stock is falling.
I'm overweight in CAVA too. I'll consider reducing that as well, next time it gets called out.
I'm increasing my position in Amazon. I think that retail stocks will do very well in the future, some months after Trump gets our energy and economic policies back in balance. AMZN has a strong position in global tech, cloud, and AI... so it's a bit like owning a mutual fund of all the hot sectors. Up 20% YTD, consolidating and poised to break out. A good long-term company to hold.
I was buying and selling AMZN last summer when the price was ranging from 110 to 140-ish. Looking back in this thread to last July I see that I was buying at 126. I probably got impatient when the price got above 150 or so, and sold it all in order to go play with some other company. Now I'm tempted to get back in, like I did with NVDA. I'm not disciplined enough to be a successful trader, now, but I'm working on it.
When to sell NVDA, that's the current question. Well, that, and what's with the Christmas lights and snow flakes.
The Indians will not bother you now, on account of ... you are touched.
