Futures Day Trading Margins: Intraday Margin | NinjaTrader

What is the highest margin on trading Intraday and have any of you succeeded in it?

Which firm offers the highest margin and how much did you make of it?
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The Great Unwinding: Why WSB Will Keep Losing Their Tendies

The Great Unwinding: Why WSB Will Keep Losing Their Tendies
I. The Death of Modern Portfolio Theory, The Loss of Risk Parity, & The Liquidity Crunch
SPY 1 Y1 Day
Modern portfolio theory has been based on the foundational idea for the past 3 decades that both equities and bonds are inversely correlated. However, as some people have realized, both stocks and bonds are both increasing in value and decreasing in value at the same time.[1] This approach to investing is used pretty much in everyone's 401K, target date retirement plans, or other forms of passive investing. If both bonds and equities are losing value, what will happen to firms implementing these strategies on a more generalized basis known as risk-parity? Firms such as Bridgewater, Bluecrest, and H2O assets have been blowing up. [2,3]
Liquidity has been drying up in the markets for the past two weeks.[4] The liquidity crisis has been in the making since the 2008 financial crisis, after the passage of Dodd-Frank and Basel III. Regulations intended to regulate the financial industry have instead created the one of the largest backstops to Fed intervention as the Fed tried to pump liquidity into the market through repo operations. What is a repo?
A repo is a secured loan contract that is collateralized by a security. A repo transaction facilitates the sale and future repurchase of the security that serves as collateral between the two parties: (1) the borrower who owns a security and seeks cash and (2) the lender who receives the security as collateral when lending the cash. The cash borrower sells securities to the cash lender with the agreement to repurchase them at the maturity date. Over the course of the transaction, the cash borrower retains the ownership of the security. On the maturity date, the borrower returns the cash with interest to the lender and the collateral is returned from the lender to the borrower.[5]
Banks like Bank of New York Mellon and JP Morgan Chase act as a clearing bank to provide this liquidity to other lenders through a triparty agreement.[6] In short, existing regulations make it unfavorable to take on additional repos due to capital reserve requirement ratios, creating a liquidity crunch.[7,8,9] What has the Fed done to address this in light of these facts?
In light of the shift to an ample reserves regime, the Board has reduced reserve requirement ratios to zero percent effective on March 26, the beginning of the next reserve maintenance period.[10]
II. Signs of Exhaustion & The Upcoming Bounce is a Trap, We Have Far More to Go
A simple indicator to use is the relative strength index (RSI) that a lot of WSB is familiar with. RSI is not the be all and end all. There's tons of indicators that also are indicating we are at a very oversold point.
SPY 1 Y1 Day RSI
Given selling waves, there are areas of key support and resistance. For reference, I have not changed key lines since my original charts except for the colors. You can check in my previous posts. 247.94 has been critically an area that has been contested many times, as seen in the figure below. For those that bought calls during the witching day, RIP my fellow autists. The rejection of 247.94 and the continued selling below 233.86 signals to me more downside, albeit, it's getting exhausted. Thus, I expect the next area in which we start rallying is 213.
SPY 10 Day/30 min
Another contrarian indicator for buying calls is that notable people in finance have also closed their shorts. These include Jeffery Gundlach, Kevin Muir, and Raoul Pal.[11,12,13]
III. The Dollar, Gold, and Oil
As previously stated, cash is being hoarded by not only primary banks, but central banks around the world. This in turn has created a boom in the dollar's strength, despite limitless injections of cash (if you think 1 trillion of Repo is the ceiling, think again) by the Fed.
DXY
Despite being in a deflationary environment, the DXY has not achieved such levels since 2003. Given the dollar shortage around the world, it is not inconceivable that we reach levels of around 105-107. For disclosure, I have taken a long position in UUP. However, with all parabolic moves, they end in a large drop. To summarize, the Fed needs to take action on its own currency due to the havoc it's causing globally, and will need to crush the value of the dollar, which will likely coincide with the time that we near 180.
If we are indeed headed towards 180, then gold will keep selling off. WSB literally screams bloody guhhhhhh when gold sells off. However, gold has been having an amazing run and has broken out of its long term channel. In times of distress and with margin calls, heavy selling of equities selling off of gold in order to raise cash. As previously noted, in this deflationary environment, everything is selling off from stocks, to bonds, to gold.
/GC Futures Contracts 5 Y1 Wk
What about oil? Given the fall out of the risk parity structure, I'm no longer using TLT inflows/outflows as an indicator. I've realized that energy is the economy. Closely following commodities such as light crude which follow supply and demand more closely have provided a much better leading indicator as to what will happen in equities. Given that, oil will also most likely hit a relief rally. But ultimately, we have seen it reach as low $19/barrel during intraday trading.
/CL Futures Contracts 1 Y1 D
IV. The Next 5 Years
In short, the recovery from this deflationary environment will take years to recover from. The trend down will not be without large bumps. We cannot compare this on the scale of the 2008 financial crisis. This is on the order of 1929. Once we hit near 180, the Fed crushes the dollar, we are in a high likelihood of hitting increased inflation, or stagflation. At this point the Fed will be backed into a corner and forced to raise rates. My targets for gold are around 1250-1300. It may possibly go near to 1000. Oil could conceivably go as low as $15-17/barrel, so don't go all in on the recovery bounce. No matter what, the current rise in gold will be a trap. The continued selling in the S&P is a trap, will bounce, forming another trap, before continuing our painful downtrend.
I haven't even mentioned coronavirus and unemployment until now. I've stated previously we are on track to hit around at least 10,000 coronavirus cases by the end of this month. It's looking closer to now 20-30,000. Next month we are looking to at least 100,000 by the end of the April. We might hit 1,000,000 by May or June.
Comparison of the 2020 Decline to 1929
------------------------------------------------------------------------------------------------------------------------------------------------
Chart courtesy of Moon_buzz
tl;dr We're going to have a major reflexive rally starting around 213, all the way back to at least to 250, and possibly 270. WSB is going to lose their minds holding their puts, and then load up on calls, declaring we've reached a bottom in the stock market. The next move will be put in place for the next leg down to 182, where certain actors will steal all your tendies on the way down. Also Monday might be another circuit breaker.
tl;dr of tl;dr Big bounce incoming. Bear trap starting 213. Then bull trap up around 250-270. We're going down to around 182.
tl;dr of tl;dr of tl;dr WSB will be screwed both left and right before they can say guh.
Hint: If you want to get a Bloomberg article for free, hit esc repeatedly before the popup appears. If it doesn't work, refresh the article, and keep hitting esc.
Remember, do not dance. We are on the cusp of a generational change. Use the money you earn to protect yourselves and others. Financial literacy and knowledge is the key to empowerment and self-change.
Some good DD posts:
u/bigd0g111 -https://www.reddit.com/wallstreetbets/comments/fmshcv/when_market_bounce_inevitably_comesdont_scream/
u/scarvesandsuspenders - https://www.reddit.com/wallstreetbets/comments/fmzu51/incoming_bounce_vix_puts/

Update 1 3/22/2020 - Limit down 3 minutes of futures. Likely hit -7% circuit breaker on the cash open on Monday at 213 as stated previously.
Do not think we will hit the 2nd circuit breaker at 199.06. Thinking we bounce, not too much, but stabilize at least around 202.97.
Update 2 3/23/20 9:08 - Watching the vote before making any moves.
9:40 - sold 25% of my SPY puts and 50% of my VXX calls
9:45 - sold another 50% of SPY puts
9:50 - just holding 25% SPY puts now and waiting for the vote/other developments
11:50 - Selling all puts.
Starting my long position.
11:55 - Sold USO puts.
12:00 - Purchased VXX puts to vega hedge.
2:45 - Might sell calls EOD. Looks like a lot of positioning for another leg down before going back up.
It's pretty common to shake things out in order to make people to sell positions. Just FYI, I do intraday trading. If you can't, just wait for EOD for the next positioning.
3:05 - Seeing a massive short on gold. Large amounts of calls on treasuries. And extremely large positioning for more shorts on SPY/SPX.
Will flip into puts.
Lot of people keep DM'ing me. I'm only going to do this once.

https://preview.redd.it/uvs5tkje1ho41.png?width=2470&format=png&auto=webp&s=c6b632556ca04a26e4e08fb2c9223bfcb84e0901
That said, I'm going back into puts. Just goes to show how tricky the game is.
3:45 - As more shorts cover, going to sell the calls and then flip into puts around the last few min of close.
Hope you guys made some money on the cover and got some puts. I'll write a short update later explaining how they set up tomorrow, especially with the VIX dropping so much.
3/24/20 - So the rally begins. Unfortunately misread the options volume. The clearest signal was the VIX dropping the past few days even though we kept swinging lower, which suggested that large gap downs were mostly over and the rally is getting started.
Going to hold my puts since they are longer dated. Going to get a few short term calls to ride this wave.
10:20 - VIX still falling, possibility of a major short squeeze coming in if SPY breaks out over 238-239.
10:45 - Opened a small GLD short, late April expiration.
10:50 - Sold calls, just waiting, not sure if we break 238.
If we go above 240, going back into calls. See room going to 247 or 269. Otherwise, going to start adding to my puts.
https://preview.redd.it/ag5s0hccxmo41.png?width=2032&format=png&auto=webp&s=aad730db4164720483a8b60056243d6e4a8a0cab
11:10 - Averaging a little on my puts here. Again, difficult to time the entries. Do not recommend going all in at a single time. Still watching around 240 closely.
11:50 - Looks like it's closing. Still going to wait a little bit.
12:10 - Averaged down more puts. Have a little powder left, we'll see what happens for the rest of today and tomorrow.
2:40 - Closed positions, sitting on cash. Waiting to see what EOD holds. Really hard trading days.
3:00 - Last update. What I'm trying to do here posting some thoughts is for you guys to take a look at things and make some hypotheses before trading. Getting a lot of comments and replies complaining. If you're tailing, yes there is risk involved. I've mentioned sizing appropriately, and locking in profits. Those will help you get consistent gains.
https://preview.redd.it/yktrcoazjpo41.png?width=1210&format=png&auto=webp&s=2d6f0272712a2d17d45e033273a369bc164e2477
Bounced off 10 year trendline at around 246, pretty close to 247. Unless we break through that the rally is over. Given that, could still see us going to 270.
3/25/20 - I wouldn't read too much into the early moves. Be careful of the shakeouts.
Still long. Price target, 269. When does the month end? Why is that important?
12:45 - out calls.
12:50 - adding a tranche of SPY puts. Adding GLD puts.
1:00 est - saving rest of my dry powder to average if we still continue to 270. Think we drop off a cliff after the end of the quarter.
Just a little humor... hedge funds and other market makers right now.
2:00pm - Keep an eye on TLT and VXX...
3:50pm - Retrace to the 10 yr trend line. Question is if we continue going down or bounce. So I'm going to explain again, haven't changed these lines. Check the charts from earlier.
https://preview.redd.it/9qiqyndtivo41.png?width=1210&format=png&auto=webp&s=55cf84f2b9f5a8099adf8368d9f3034b0e3c4ae4
3/26/20 - Another retest of the 10 yr trendline. If it can go over and hold, can see us moving higher.
9:30 - Probably going to buy calls close to the open. Not too sure, seems like another trap setting up. Might instead load up on more puts later today.
In terms of unemployment, was expecting close to double. Data doesn't seem to line up. That's why we're bouncing. California reported 1 million yesterday alone, and unemployment estimates were 1.6 million? Sure.
Waiting a little to see the price action first.
Treasuries increasing and oil going down?
9:47 - Added more to GLD puts.
10:11 - Adding more SPY puts and IWM puts.
10:21 - Adding more puts.
11:37 - Relax guys, this move has been expected. Take care of yourselves. Eat something, take a walk. Play some video games. Don't stare at a chart all day.
If you have some family or close friends, advise them not to buy into this rally. I've had my immediate family cash out or switch today into Treasury bonds/TIPS.
2:55pm - https://youtu.be/S74rvpc6W60?t=9
3:12pm - Hedge funds and their algos right now https://www.youtube.com/watch?v=ZF_nUm982vI
4:00pm - Don't doubt your vibe.
For those that keep asking about my vibe... yes, we could hit 270. I literally said we could hit 270 when we were at 218. There was a lot of doubt. Just sort by best and look at the comments. Can we go to 180 from 270? Yes. I mentioned that EOM is important.
Here's another prediction. VIX will hit ATH again.
2:55pm EST - For DM's chat is not working now. Will try to get back later tonight.

Stream today for those who missed it, 2:20-4:25 - https://www.twitch.tv/videos/576598992
Thanks again to WallStreetBooyah and all the others for making this possible.

9:10pm EST Twitter handles (updated) https://www.reddit.com/wallstreetbets/comments/fmhz1p/the_great_unwinding_why_wsb_will_keep_losing/floyrbf/?context=3, thanks blind_guy
Not an exhaustive list. Just to get started. Follow the people they follow.
Dark pool and gamma exposure - https://squeezemetrics.com/monitodix
Wyckoff - https://school.stockcharts.com/doku.php?id=market_analysis:the_wyckoff_method
MacroVoices
Investopedia for a lot. Also links above in my post.

lol... love you guys. Please be super respectful on FinTwit. These guys are incredibly helpful and intelligent, and could easily just stop posting content.
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I bought six PRPL mattresses today. You should buy PRPL too (it's undervalued).

I bought six PRPL mattresses today. You should buy PRPL too (it's undervalued).
tl;dr: Buy PRPL stock, warrants (PRPLW) or calls based upon your preference. They are closing out a killer quarter and are undervalued. PRPL 22.5c 8/21 if you really need a strike.

I decided to appeal to both WSB audiences today with two different types of DD:
  1. A completely irrelevant story with some pictures and a position
  2. Numbers and Other Stuff

I bought six Purple Mattresses today.

Yep. I moved to Utah a few weeks ago (absolutely true) in order to do better DD for you in Purple's hometown (not true at all), so I decided to trek down to the Purple Factory Outlet to scope out the scene.
Purple Factory Outlet in a crappy part of Salt Lake - Sign on the door says \"NO CASH INSIDE\"
Family informed me they were coming to visit in three days (who does that to someone when they just moved!?!). My wife said we needed sleeping arrangements, so I said Purple mattresses.
After speaking with my Mattress Firm friend, he told me that Mattress Firm is entirely out of stock of twin mattresses in the Salt Lake City market (Purple's hometown). Worse, the mattresses aren't coming back as the original (the only mattress to come in twin) is being discontinued.

https://preview.redd.it/qd4u5bo3oy751.png?width=1242&format=png&auto=webp&s=3417ffb0eca481dbd797b67be2cb9c06c7a58a65
This is a screenshot of an internal Mattress Firm memo on the discontinuance of the Original Purple Mattress (the cheapest one by far) What can I say? He isn't a photographer.
  • The original is going away
  • Floor models are NOT to be sold as they are traffic drivers
https://preview.redd.it/tsevapzpoy751.jpg?width=3024&format=pjpg&auto=webp&s=04399eff4e38e98ad17fa55d6db0e511f799bc67
I figured the Purple branded store would have stock, if it existed. And because they are being discontinued, I didn't want to be left short-handed in the future. So, I walked out of the store with six Purple mattresses. And some pillows. And sheets. And mattress protectors. Aaaaaand because I took delivery, it counts towards Q2 revenue (the best part).
For all of those who will inevitably accuse me of pumping the stock, I admit that purchasing six mattresses will pump revenue and therefore pump the stock after earnings. Now, where are all of those people who asked me for a free mattress?

This was a sign.
Most importantly, when I pulled out of the parking lot, a purple Dodge Challenger zoomed right by me. I was barely able to get this zoomed in picture of it. This means PRPL stock is going to zoom up.
PRPL 22.5c 8/21. I bought ten of those contracts today too. It was cheaper than the mattresses.

Numbers and Other Stuff

I put forward that because Purple is a high revenue growth company, the best valuation metrics are revenue multiples (as opposed to EBITDA multiples or P/E ratios). You're welcome to debate this, but frankly, the forward looking EBITDA and Earnings look beautiful as well.
Additionally, I put forward that Enterprise Value / Revenue is superior to Market Cap / Revenue, but I'll let you do that research yourself.
From Yahoo Finance:
Enterprice Value / Revenue
Ticker As of 6/28/20 2020 Q1 2019 Q4 2019 Q3 2019 Q2 2019 Q1
PRPL 2.01 2.52 3.94 3.61 3.73 3.09
TPX 1.71 4.84 7.39 7.34 8.07 6.88
SNBR 0.98 2.36 4.40 3.79 4.97 3.78
CSPR 0.53 0.91
Yes, COVID has happened, but unlike TPX, SNBR or Serta Simmons Bedding (which just completed a pseudo-bankruptcy), Purple has actually benefited from COVID and its prospects have never looked better with a shift to higher revenue- and margin-per-unit DTC as well as insatiable demand from its wholesale partners.
PRPL is currently trading well below its own previous EV / Rev multiple range, despite accelerating revenue growth into Q2 with a healthy long-term outlook of holding an increase.
Additionally, PRPL is trading well below the pre-COVID norm for industry EV / Rev mutliples.
What about CSPR? CSPR is a total dumpster fire that is now drowning in IPO lawsuits. Its revenue growth has materially slowed, was awful in April forward looking (15% YoY growth vs 170% for PRPL), on declining margins. The cash burn rate for CSPR was high before COVID. They likely only have a few quarters left to live. I think they are overpriced as a result. CSPR is a bad comp even though there are similarities to the businesses at the 30,000 ft level.

Revenue Growth & Estimates (Q2 Estimates via Yahoo Finance)
Ticker My Estimate Q2 Low-Mid-High Estimates 2020 Q1 2019 Q4 2019 Q3 2019 Q2 2019 Q1
PRPL 201.7-233.3 170-180.1-186.9 Actuals 122.4 124.3 117.4 103.0 83.6
YoY % 46.3% 58.3% 65.8% 36.0% 37.7%
TPX 613-616.4-626.4 Actuals 822.4 871.3 821.0 722.8 690.9
YoY % 19.0% 32.9% 12.5% 7.9% 6.6%
SNBR 176.8-216.4-281.4 Actuals 472.6 441.2 474.8 356.0 426.4
YoY % 10.8% 7.1% 14.5% 12.6% 9.7%
CSPR 95.8-104.8-113.6 Actuals 113.0 126.9 89.4
YoY % 26.4% 24.3%* 24.3%* 24.3%*
A few items of note here:
  • CSPR disclosed the Last Twelve Months YoY growth as of 3/31 was 24.3% (which sucks for a revenue growth company that is burning cash)
  • PRPL accelerated its growth over the past year. It is massively accelerating again in Q2.
  • PRPL disclosed in an 8k that is has already booked about $145M in revenue for Q2, so the analysts' consensus estimates are WAY under. I gave my math and estimate for Q2 sales here. I still stand by the estimate that PRPL will beat $200M in revenue this quarter, especially since I just bought six mattresses.
  • Now compare the barely double digit growth numbers of TPX & SNBR over the past year to PRPL. Now compare the EV / R multiples. Something is off.
  • PRPL may very well beat SNBR in revenue for Q2 (due to SNBR's high reliance on wholesale sales).

Summary: PRPL's EV / R multiple is under where is should be, even in this market, whether you compare it to its own previous multiples or its competitors before they were affected by COVID. If you look at COVID EV / R multiples, it is in-line with companies who are materially struggling with cash flow and growth... this couldn't be further from the truth. PRPL is undervalued.

Analyst Price Targets

I don't usually give these guys much weight, but for those of you who do:

https://preview.redd.it/h13nnc7zxy751.png?width=531&format=png&auto=webp&s=f36406c5e43cd7e07757ba6459dbff5665b7e525
Marketbeat (and a few others) are inaccurately showing a lower consensus price target because they are using some very old price targets.

https://preview.redd.it/qxgstjh4yy751.png?width=1359&format=png&auto=webp&s=af9d185d18ad3db9c3bc8f44c6acecc729cc6d1a
As you look at the 7 price targets MarketBeat is using to build a consensus price target, two of them are from last year, which is ridiculously old (it's about time you update this Bank of America--you got your underwriting--now do your job). Wedbush was after earnings, but before the recent 8-K on Q2 revenue.
I put forward that the only targets that matter are those that adjusted to the 8-K revenue announcement. The consensus there is $19.75. This only matters if you follow these types of things.

Today's Price Action

I admit that this post would have been more relevant early this morning when I started writing it (the numbers part).
The price spiked late afternoon because of the attention drawn to it by a CNBC interview by CEO Joe Megibow.
https://www.cnbc.com/video/2020/06/29/purple-ceo-on-the-popularity-of-mattresses-as-americans-stay-at-home.html
In the interview, he doesn't share anything really new (for those of us who closely follow), but he does emphasize that PRPL doesn't have a return rate problem, unlike others (*cough* CSPR *cough*).

Q2 EPS / EBITDA Estimates

PRPL has generated $70M in cash during April and May, which is insane for a stock that has generated Adjusted EBITDA in the 6.2-15.3M range over the last four quarters. The quarter isn't even done yet.
I'm not putting an EPS estimate on this because the amazing cash generation is going to be partially offset by a fairly large warrant liability expense adjustment. It will likely be one of the final expense adjustments we see as the secondary offering triggered a strike price drop to zero, which is one of key things the liability expense was modelling. Regardless, warrant liability expense doesn't deserve to be an expense as the warrants themselves are already built into fully diluted EPS, which is what everyone reports. The FASB done messed up on this one.

Technical Astrology & PRPL Patterns

IMO, most technical analysis is confirmation bias at best. Here's some confirmation bias.
https://preview.redd.it/5kviazrs0z751.png?width=1166&format=png&auto=webp&s=56c8daaa52c4af31c66c9821e57e40b9362b1bcd
If you are into this type of thing, PRPL has been a series of Bull Flags since the bottom of COVID. We are now ending our fourth bull flag (which likely ended today). At least this is what stocktwits and a few other areas are raving about.
Intraday Patterns
The intraday patterns are more interesting to me. I've been watching this security fairly closely over the last 3 months since the COVID bottom, and on most days, you'll see a spike in the morning that fades away into the afternoon. It is almost like clockwork and seems to be irrespective of volume.
While I don't trade this pattern because I don't want to exit my long-term capital gains positions yet, some of PRPL gang makes money by buying in the morning (or afternoon before), selling/shorting at the peak, and then closing/buying late afternoon. Good on them!
Also, PRPLW warrants tend to lag the stock on the way up if you want to play that too.

What is your next play after PRPL?

I've already mentioned several times that I will fully exit my warrants (and rotate into some PRPL stock / long dated options) when the stock price reaches about $24. My inbox has been bombarded with questions about what my next play is.

https://preview.redd.it/t56ziwe42z751.png?width=1161&format=png&auto=webp&s=4ccef0051c2f1740d1c8059f1cb2a16188f7435c
The above chart is a comparison between CSPR and PRPL. CSPR, even though it is a total dog, has been riding up with PRPL on sympathy plays. CSPR spikes on PRPL news, conference presentations, and any other movement.
PRPL has reasons to be up. CSPR shouldn't be any higher than where it was after its last earnings release. The only new things that have occurred are dozens of IPO lawsuits.
I'll be shorting CSPR for somewhere between $100k-$500k if I end up exiting my PRPL positions before CSPR earnings and if this stupid pattern holds. It's free money.

Positions

I've got tons of warrants (closing in on $2M worth) and now 10x PRPL 22.5c 8/21.

Do your own due diligence. This is not investment advice of any kind.
submitted by lurkingsince2006 to wallstreetbets [link] [comments]

DDDD - Cycles and Human History

DDDD - Cycles and Human History
In this week's edition of DDDD (Data-Driven DD), now that my short term thesis of a 274-292 channel has now been invalidated because of some vaccine company fraudulently telling everyone they've cured COVID-19 to pump their stock before a secondary offering, I'll be digging deeper into my longer term thesis that I've been talked about for weeks now. I've previously wrote about this thesis from a perspective of economic history and the perspective of liquidity and finance. This time, lets look at it from a perspective of human and American history, and cycles that can be in them.
EDIT - This DD is meant to be read as a last part of a trilogy from these two previous posts with the actual data and quantitative content. Without that context, this post will basically seem like trying to use obscure theories to magically predict the future because of some prophecy. This is meant to be a theoretical / qualitative explanation of the of what was talked about in those previous posts, as well as connecting them to actions and thesises of well-known investors like Ray Dalio and Warren Buffett, who are saying very similar things. Don't bother reading this if you haven't read the first two parts of this trilogy.
Disclaimer - This is not financial advice, and a lot of the content below is my personal opinion. In fact, the numbers, facts, or explanations presented below could be wrong and be made up. Don't buy random options because some person on the internet says so; look at what happened to all the SPY 220p 4/17 bag holders. Do your own research and come to your own conclusions on what you should do with your own money, and how levered you want to be based on your personal risk tolerance.
History doesn’t repeat itself, but it often rhymes. This time, let’s take a broader look at cycles and patterns that often present itself throughout human history, and connect that to the economy and the stock market. Much of the content for this piece is taken from the Strauss–Howe generational theory, Ray Dalio’s thesis about our place in the long-term debt cycle, and Warren Buffet’s take on the same topic when he spent a few hours talking about it in the most recent Berkshire Hathaway annual shareholders meeting.
The Fourth Turning
The general idea of Strauss–Howe generational theory, or the “fourth turning” is that American history tends to repeat certain trends within every “saeculum”, or human lifespan - approximately 80 years. This is how long it typically takes for the certain historical events to start disappearing from human memory, allowing similar events to happen again. I’m not entirely sure why this theory focuses on American history specifically, and can be applied to human histories across civilizations, although until recently those cycles may not have been synchronized with each other. The theory states that history tend to occur in cycles of four “turnings”:
High - A “golden age” of a civilization. This is when there is strong unity within members of the society, with strong confidence in institutions like the government and big corporations, and weak individualism. As a collective mind, the civilization is able to work together to achieve big goals.
Awakening - People get tired of conformity, trust in institutions weaken, and there’s a strong desire for self awareness, spirituality, or authenticity. This is a time of experimentation, activism, and rebellion.
Unraveling - Confidence in institutions such as governments and large corporations are at its weakest, and individualism is at its strongest. Society fragments to polarizing groups, and public action by governments is barely able to achieve the smallest goals.
Crisis - This is when the fabric of society and existing institutions are destroyed in response to a perceived existential threat to the civilization itself. Economic distress is rampant as the economy sees defaulting sovereign debt, high unemployment, deflation or hyperinflation, or civil unrest. The crisis eventually becomes a unifying force for the previously fractured society, and the civilization comes together to solve the crisis. Civil authority and governments become trusted again, and self-sacrifices inspire people to work together as a society over self interest.
Let’s look at how this cycle played out over the past few centuries in the US.

1701-1723 High The establishment of the first British Empire. The thirteen British colonies in the Americas were all by now well established and beginning to prosper. The Glorious Revolution in Great Britain has just ended, and the result is the supremacy of the people, through Parliament, over the Crown, and a new set of rights that apply to all Englishmen.
1724-1741 Awakening The First Great Awakening, or the Evangelical Revival. People become much more devoted to their religion and a desire to convert others, including native Americans and slaves.
1742-1766 Unravelling Seven Years War (French and Indian War in the US). It was considered to be the world’s first major conflict, with initial rivalry between the European great powers spilling over to other continents. From an American perspective, this would seem as an unnecessary war caused by a rivalry between two powers far far away, causing unnecessary hardship to the settlers in America. After the war, Britain wanted to recoup some of their losses from all the money spent fighting in North America, and created new taxes, leading to the Boston Tea Party. As a result, Britain then imposed the “Intolerable Acts” to punish the colony of Massachusetts. Throughout this time, trust in the Crown within the colonies started to disappear.
1767-1791 Crisis The American Revolution - All trust and allegiance to the Crown is destroyed and replaced with new ideals.
1792-1821 High After Victory in the American Revolution, there’s a new sense of unity and pride in the newly founded nation. New institutions were created for the new country, and there was a sense of optimism, even during the War of 1812. The period after that war, and leading up to the 1824 election, was called the Era of Good Feelings, to reflect the sense of national unity and purpose within the US
1822-1842 Awakening The Second Great Awakening, similar to the first one.
1844-1860 Unraveling Sectionalism within the US - this period saw the rise in the North vs. South divide over slave states and non-slave states, and tensions revolving around it
1860-1865 Crisis American Civil War
1865-1886 High Gilded Age - Rapid economic growth in the United States through industrialization. Creation of new institutions in the form of industrial titans like Standard Oil.
1886-1908 Awakening The Third Great Awakening, similar to the first two. Also, the progressive era, which saw an activist movement to address some of problems that come with monopolies like Standard Oil, urbanization, and corruption.
1908-1929 Unravelling This period saw WWI, Prohibition, and the Roaring Twenties. During this time, there was an increasing social conflict between liberal urban and conservative rural areas, specifically about morals and what should and shouldn’t be legal (eg. Scopes trial), the rise of the KKK, and is a hallmark of consumerism, individualism, and greed.
1929-1946 Crisis The Great Depression and WWII. The New Deal destroyed many existing institutions, and replaced them with new ones. The aftermath of WWII created new global institutions, in the form of the UN, and started the American world order.
1946-1964 High The Golden Age of Capitalism / post-war economic boom
1964-1984 Awakening During this time, we saw two different types of awakening. The counterculture movement of the 1960s saw activism against the Vietnam war and the Civil Rights movement, as well as an increase in spirituality and self-awareness, which is typically associated with the youth during this period (i.e. “hippies”). During the same time, there was another religious revival - The Fourth Great Awakening.
1984-2008 Unravelling This period saw an increase of the polarization on cultural issues in America, specifically with abortion, gun control, drugs, and gay rights, between conservatives and liberals, starting with the election of Ronald Reagan. The polarization was also very heavily influenced by geography, with liberals tending to live on the coasts and big cities, and conservatives everywhere else. The polarization made it increasingly difficult for congress to enact any big changes.
2008 to somewhere between 2020 and 2030 Crisis This period started with the financial crisis, as well as the aftermath of 9/11 and the War on Terror. Add on the pandemic, and the fallout from it, and we’d likely see another mass destruction of old institutions and creation of new ones.
2020-2030 to 2040-2050 High ???
2040-2050 to 2070-2080 Awakening A Fifth Great Awakening?

The Changing Hands of World Powers
There’s also another interesting theory in the field of international relations that’s interesting and probably applicable here - the Long Cycle Theory. It basically states that international world orders and the title of the most powerful nation, is challenged every 70 to 100 years - the approximate maximum lifespan of an average human life, leading to some sort of global conflict and potentially a change in the world order as a result.
Cycles in World Leadership
The United States has survived as the World Leader for the 20th century from the threat of the Soviet Union challenging the world order. This time, it’s becoming increasingly clear that China has become a new challenger to the American world order.
Long Term Economic Cycles
Ray Dalio is famous for this being a central part of his economic thesis - about long term debt cycles, and the fact that we’re near the end of one. The summary of this idea is that the economy goes through short term and long term debt cycles. Short term debt cycles are the regular occurring business cycles you usually see once every decade, usually caused by overspending. The long term debt cycle, however, is when an entire economy becomes overleveraged, and it becomes harder and harder for a central bank to stimulate the economy. A hallmark of this happening is when interest rates hit near 0%, and they are forced to perform quantitative easing to stimulate the economy; the last time the economy’s seen anything similar to this was the Great Depression - this is called a liquidity trap. The period following this liquidity trap was an economic deleveraging, typically associated with civil unrest, revolutions, wars, and asset prices plummeting. The US economy has been seeing this since 2008 and has never been able to successfully fully deleverage the economy yet.
Another long term economic cycle theory that’s somewhat popular is the Kondratiev wave, although this field of economics is not generally accepted by most economists. The idea is that the economy goes through long-term economic cycles, lasting between 45 to 60 years, of periods of rapid economic and stock market growth fueled by technological innovations, followed by a period of stagnation.
Kondratiev Waves
Currently, we’re late in the wave created by the introduction of Information Technology, which started in the late 1970s. I’ve previously talked about this, but basically we’re near the end of this cycle as well.
So, it sounds like we’re near the end of many cycles; the generational cycle of the Strauss–Howe generational theory, the long term debt cycle, the Kondratiev Wave cycle, and possibly the beginning of the end of the Long Cycle in international relations as China begins to contend with the United States for global influence. In all of these cycles, the conclusion is clear - chaos, economic hardship, geopolitical tensions and crises. Let’s take a closer look at the stock market last time all of these cycles ended - the 1930s.
Retail Investors in the 1920s
There’s not that much solid quantitative data about retail investors and their impact on the stock market; only qualitative and anecdotal data. However, one thing is clear - retail investors pumped the market in 1929 beyond what fundamentals warranted, despite evidence of a weakening economy due to stagnating consumer spending and distress by farmers due to overproduction of wheat, and soon, the Dust Bowl. Why were they pumping stocks so much? Because they falsely believed that stocks only go up. I’ll put some excerpts from this Forbes and this Investopedia article I found talking about this to better illustrate the extent and nature of this pump.
Still there was one big anomaly in the decade preceding, the 1920s, and it remains instructive today. The American people bought stocks in unprecedented fashion. Stocks on the installment plan, stocks via investment clubs, stocks bought with capital rather than income, stocks on margin. It was a big new fad. Nothing like the participation in the market that the nation experienced in the 1920s can be found in previous eras of history.
The permanent denuding of the dollar, the reality of which first became clear in the 1920s, forced savers to find some instrument that would pay them back in the old way, in money that held its value. The choice was made to capture, via stocks, the forthcoming profits of businesses. Here would be money commensurate to what was needed to buy things in the future.
Until the peak in 1929, stock prices went up by nearly 10 times. In the 1920s, investing in the stock market became somewhat of a national pastime for those who could afford it and even those who could not—the latter borrowed from stockbrokers to finance their investments.
People were not buying stocks on fundamentals; they were buying in anticipation of rising share prices. Rising share prices simply brought more people into the markets, convinced that it was easy money. In mid-1929, the economy stumbled due to excess production in many industries, creating an oversupply. Essentially, companies were able to acquire money cheaply due to high share prices and invest in their own production with the requisite optimism.
This all sounds pretty familiar to what's going on in the stock market today; as I previously mentioned, retail investors are pouring money in at unprecedented levels. Why is this happening now, about 90 years since the last time every retail investor started pouring money in? It's the same as the reasoning behind most of the other cycles I've mentioned above - the vast majority of people who previously experienced this and would have been alive to remember the 1920s have passed away by now. With an absence of people alive to have this mistake in living memory, humanity is bound to repeat the same mistakes, ignoring the warnings from our ancestors who are no longer with us, and repeat the cycle.
There's one pair of billionaires who are old enough to remember the aftermath of the the stock market pump that led towards the 1929 crash - Warren Buffett and Charlie Munger. Warren would have been born right after the crash and Charlie would have been 5. Both of them entered the finance industry while the stock market was still recovering from it, and still below the 1929 highs. For anyone who watched him talk at the annual shareholder meeting, he spent a few hours talking about a similar story - one of the highs and lows of American history, with a bullish perspective. He wouldn't have spent hours talking about the 1929 crash and the fact that it took multiple decades to recover if this wasn't relevant. This is supported by the fact that he bought virtually nothing since the crash, and has been gradually selling a large portion of this publicly traded equities - first his airlines and now banks. Although he believes that we'll eventually recover (i.e. "Never bet against American", in the long run), it's clear from his actions that he sees parallels of this from the stock market he grew up in the shadow of in his childhood and doesn't want to bet for America in the short term.
EDIT - Someone pointed out this article by Ray Dalio: https://www.linkedin.com/pulse/big-cycles-over-last-500-years-ray-dalio/ which basically talks about something very similar. I actually didn't even know about the existence of this article and actually wrote this before this got published, but looks like we both came to the same conclusion, and this is a shorter version of Ray Dalio's article. Recommend everyone check this out if they want a more in-depth version of this DD with more data and this this post as a tldr of it.
Weekly SPY Watch Updates
This section has absolutely nothing to do with anything I talked about above, but people apparently care about trades I'm making and what my magic markers say will happen in the stock market this week, so I'll have this section of this post dedicated to that and my updates.
I've since sold, with the exception of some VIX calls, all my short positions on SPY, and currently doing some individual plays - currently holding GSX puts and short (sold) HTZ calls, among some other smaller plays. With respect to SPY, it looks like we'll be in a new channel - this time 293-300; not sure how long we'll be staying in this channel for, but I'll be playing it by either selling short-dated iron condors or buying calls / puts when it reaches one end of the channel. While magic markers are telling me we're going to be bullish medium term, and go through 300 to new ATHs, meaning I should buy calls, I don't want to go against my own fundamentals in principle by the fact that the stock market is clearly already overvalued.
5/25 3PM - /ES at 299, might open near the top of the channel. Will need to see how we open to decide if I'm going to enter a position on SPY again.
5/25 10PM - Looks we're going to be trading on the upper half the of channel on Tuesday, with a trading range of 300-297. Might look to pick up some short-dated puts to play the channel if technicals look right on open.
5/26 Noon - Got a small amount of 5/29 ATM puts to play the channel. We opened right above the 200MA so I'm relying on this being a fake out, and not very confident about this specific play.
5/26 3:50PM - Looks like 300-302 range is acting like a resistance, heading back down in the 293-300 channel. Bearish intraday (5M, 15M) MACD => EOD dump and open lower in the channel tomorrow. Looking closely at what's going on with China.
- Wednesday (tomorrow): House votes on sanctions related to Chinese concentration camps of Uyghurs
- Thursday: China votes, and very likely passes, amendment to Basic Law in HK for "national security"
- End of Week: Trump promised that he will have a policy response, likely sanctions, for the change in HK's basic law, in addition to possibly revoking HK's special status
5/27 Market Open - Opened at the top of the resistance again, but quickly reversing. Might play out similar to yesterday
5/27 11AM - Going to wait till SPY hits 297 again and then roll my 5/29 puts I got yesterday to continue playing the channel down to 293
5/27 3:50PM - Turns out it was a EOD pump instead of dump. Oversold on 5M and 15M, so probably need to consolidate again tomorrow with a trading range of 297-302 again. Not so sure about this one because there's a solid chance this just breaks through that resistance and goes towards new ATHs. Entered into more 5/29 puts and going to hold overnight, sell if we still have positive momentum going in to open tomorrow. If we don't break 300 again tomorrow, I'm going to assume we're going to new ATHs and buy some IWM calls, hedged with QQQ puts.
5/27 6:30PM - My plan for tomorrow - see if we're actually in a 293-302 channel. There's going to be alot of uncertainty coming from China this week. If we're still above 302 by 10AM I'll probably transition towards bull positions. Most tech / strong companies are priced near their ATHs, and all the momentum coming into SPY is now coming from all the stocks that were really hit the past few months. Looking at CCL, JPM, and BA, all of whom are going towards a 1W MACD crossover
5/27 11PM - Still above this channel. Again, if we open above 302 and don't quickly reverse then clearly 300 wasn't that much of a resistance and we're headed to ATHs - next stop is 313, followed by 340. To my bears out there - the 1W MACD has already crossed over, meaning we're not going to see a rug pull any time soon, with the exception of some dramatic event happening in China. I'm not taking any medium-term bearish positions and currently just trying to play this channel, although the bullish momentum is stronger than I expected and not consolidating that much on 300 (yet). Watch out for August - that's when most medical experts agree a second lockdown is going to become evident and this bubble will pop; I still stand by my long term thesis. However, in the short term, don't trade against the trend and profit off the bubble.
5/28 9:40AM - I was wrong again. Going to sell those puts when SPY hits 302 at a small loss. We're headed to ATH
5/28 11:40AM - Overbought on 15M and 1H RSI, should see more consolidation today, and hopefully hit my 302 target to sell later today.
5/28 1PM - Stopped out of my small SPY puts, rolled that out into bullish positions on JPM, BA, and CCL. Will probably be doing SPY plays for a while, since all the technicals are pointing to a bullish rally, but only way for that to continue is for beaten down stocks like the ones mentioned, and found in IWM, to skyrocket the next few weeks. Also probably going to stop updating this thread as much.
5/28 5PM - 1H MACD is about to cross, and SPY got near 302 today, We've clearly broken the previous resistance area of 300-302, alot earlier than I was expecting; today was just a day for consolidation because RSI was overbought, now it has room to grow. MACD also acts as a resistance and typically will bounce back instead of cross if there's still bullish sentiment. I believe this is the case now, and we will also see SPY bounce up from the previous 300-302 region of resistance with it becoming support; the next level of resistance will be 313 on SPY, which is where we'll be headed soon. Haven't been holding any medium-term short positions, and am currently net long on financials and transports, which will very likely rally disproportionally if SPY continues to go up. Very well aware that this is a bubble, but I called the top wrong and trading against the trend will just lose you money.
5/28 7PM - Tomorrow will be an interesting day, Trump announced a news conference, with an unspecified time, where he will talk about actions he will do to China, potentially sanctions. There was a very small dip in the market on this news but nothing much else has happened yet. Depending on what the actions are, could be a red day tomorrow and break 302. I'll play this out intraday if we don't open low tomorrow
5/29 11AM - SPY is re-testing the 300-302 area, this time as support. Everything really depends on whatever Trump announces today regarding retaliation about China. Hard to say what can happen. If it's something extreme, like sanctions or tariffs, this could lead to another crash. Anything else would mean this SPY immediately bounces back from this support area.
5/29 1PM - Trump conference scheduled at 2PM. Will watch stock market reaction and trade with sentiment from it. If retaliation is bad enough to drop below 300, could be the rug pull all the bears have been waiting for.
5/29 2PM - Picked up some 302-300 debit spreads coming into the news conference, planning on holding this for an hour and selling by EOD
5/29 3PM - Sold puts during the speech and flipped to 304-310 calls. Looks like this wasn't enough to break through support. Going to hold these overnight, momentum looks to be turning bullish now that there's no longer any uncertainty about China, and actions are unlikely to provoke a Chinese retaliation.
5/29 4PM - Sold my short-dated calls. Coming into the weekend, it looks like next week will continue to be bullish, with 1D MACD convergence continuing, as well as the lack of any resistance until 313.
Week of Jun 1 - Jun 5 - Looking at SPY hitting 213 by end of week
submitted by ASoftEngStudent to wallstreetbets [link] [comments]

$DXY, $VIX, $SPX, $GLD, $TLT (Bearish Correlation)

I searched the sub for anything on $DXY and didn’t see much. Why?
$DXY, the dollar spot index, has been hanging out at ~96 lately. Last time it did this was 6/10, which was followed by a 198pt drop in /ES (S&P futures) on 6/11.
The time before that was 3/6-3/10.
Want to guess what happened from 3/11 to 3/23? The S&P lost about 875 points, or about 29%. That was the big dip that brought us to our yearly low of 2174 (/ES).
Contrasting between the 6/10 circumstance and the current circumstance? $TLT is higher. Bearish. Early March values are marginally higher (Fed hadn’t stepped in yet, so this is less useful here). In short, $TLT being higher today, despite lessening Fed intervention (check the NY Fed chart) is bearish.
Let’s look at $GLD. Steady increase since lows on 3/16 and a smoothed mathematical local min at 3/20. ATH’s right now. Why? What is driving buying of a risk-off instrument during a period of increasing/“recovering” equity values?
$GLD set a rolling yearly high of $170.86 on 7/8. It closed today at $170.12. To me, this shows a massive lack of trust in the dollar and equity prices, when compared to the last two trading days. We just had two “balance days” with decreasing intraday resistance and support levels.
So, what next?
tl;dr: all signs point to a severe market-wide correction, if we assume a correlation between previous SPY values and $DXY, $GLD, $TLT, and the $VIX.
Positions: 283 $UVXY ETN shares @$30.14
submitted by JeepingJason to wallstreetbets [link] [comments]

Best Futures trading platform?

I'm searching for a futures trading platforms that mainly don't charge too much for commissions. A platform that has good data feed and low latency to execute orders. I don't mind much about indicators but the overall responsiveness of the platform. I'm not sure if it's better to have an all-in-one sort of service or have things like data feed and broker from different companies. I'm thinking of going with Tradovate because of the low intraday margin they offer and low commissions which is $4.26 round trip for the e-minis and $1.12 round trip for the micros with a free membership. If there's anything better than that without having to pay too much for different services from multiple sources, what would that be? I'm thinking of buying 100+ contracts of the micros a day so adding everything up from commissions and all I don't know what broker would serve me better but I'm thinking Tradovate for now. With time I plan on paying for the $2.4k yearly membership for free commissions, though it would be better if there was a platform that didn't charge commissions or have that cost for a yearly service. What's better in the long run? What do you guys think?
submitted by ArcadeF1 to FuturesTrading [link] [comments]

Do NOT trust AMP Futures/AMP Global or EliteTrader.com - they are dishonest manipulators and in bed together, also released my private email communications into a public forum. I have filed a complaint with the NFA and CFTC.

I'll try to make this as short as possible.

I got on the phone with the top guys at AMP and made sure what they advertise on their site is legit; $800 per contract intraday on the emini SP500 for accounts that exceed $100k. They assured me repeatedly that is the case, and they would NEVER change those margins. I've had convos with two managers that exceed a total of >3 hours phone time. Numerous and repeated assurances of this among a few other things. They even said that if I deposited $20 million+ they could maintain me at those same margins (!!!).
Feeling hesitant from these supposed yes men on everything, and feeling suspicious after seeing other threads written about their behavior, I reduced my wire last minute to ~$2 million (still a substantial sum).
Whaddya know, the second they received the wire, without any warning and before I even linked a platform or could make a trade, they emailed me to say they will change the margins from $800 to $6000.
When I notified a public forum of this, without ANY context, they went ahead and released my private email communications without permission. No context, no permission, those emails dont even relate to the issue at hand. They released questions I answered privately regarding the way I trade, how much money I've got in certain accounts, etc. Disgusting behavior for any organization.
Link: https://www.elitetrader.com/et/threads/i-have-decided-to-put-a-significant-amount-of-my-money-with-amp.345379/page-3#post-5112748
Of course they deny everything, with the strangest arguments.
To make maters worse, posts on the site (Elite Trader) are being modified. Not deleted mind you, MODIFIED. You can see it when looking at my posts (there is a 'last modified' message at the bottom right of many of my posts). AMP is 'sponsored' on that site, and many individuals have complained of this before (especially on futures.io) so no surprise there either. A few individuals have also had all their posts on that thread deleted and their accounts banned.
As I said, I have filed a complaint, and hopefully they are fined. Since my messages are being modified to change the message I am communicating, I am posting here.

Uploaded also are images of the thread in its current form as of 5/30 9:45 PM PST, in case they modify it again or delete more posts (or the entire thread). EDIT: I have archived the posts, after the first initial edits by the mods. Wish I could get the originals, but I'm sure they will continue to screw with it so here are the copies:
http://archive.vn/PyIhU
http://archive.vn/RljeW
http://archive.vn/SnYfD
http://archive.vn/uPXRF
http://archive.vn/JJW5J
http://archive.vn/z3gU8
http://archive.vn/A5VVP
http://archive.vn/Jrd1n
http://archive.vn/yHSP5
submitted by DiscombobulatedRich6 to Daytrading [link] [comments]

5 intraday trading tips that can maximize your profits

Intraday trading strategies are used by investors to conduct trades on a day to day basis. As a consequence, itraday traders are prone to a higher volatility as compared to the long-term investors. But if you have the correct knowledge, you can reap serious profits whilst doing automated trading. .
If you are starting off into this new domain of trading, it's natural that you would want to learn tricks of the trade. However, you should keep in mind that merely tricks and tips wouldn't do the job as you need good intraday trading strategies as well to maek the most of your experience at the intraday trading market. Let's take a look at some of the guidelines that you should follow in order to maximimze your profits and minimize your losses.
Go for liquid stocks
You must be well aware of the fact that intraday trading encapsulates the idea of buying and selling stocks on the same day. But you must also keep in mind that for the exchange to execute these orders, there needs to be a certain level of liquidity in the market. Therefore, you must avoid small-cap and mid-cap stocks as they're not very liquid. If you do not pay attention to this, your squaring off order might not get executed, and you could be forced to take the delivery in its place.
Diversify your stocks
Ask any investor who has existed in this market long enough and he'll tell you that it's a mistake to invest all your capital in a single stock. A better option is to diversify your investments across a number of different stocks. This will minimize your risk as you wouldn't stand to lose everything if one of your stocks fall.
Define and set entry and exit price
There's a widespread phenomenon in the market known as the buyer's fallacy. What it basically means is that the stock investors sudddenly end up having a quick change of mind once they've bought a stock. People are emotional and they may regret their decision for undue reasons. You can avoid falling into this trap by setting up entry and exit price before you take up a position. This will ensure that you maintain an objective outlook and do not fall victim of emotional mood swings.
Set a stop loss level
This is, perhaps, the most important intraday trading tip that you could ask for. Setting a stop loss level is a simple but very efficient way of minimizing your losses. This is how it works: imagine that the stock that you've bought keeps falling instead of rising on the day of the trade. Stop-loss allows you to set a benchmark after which you'd square off your position on that particular stock. This acts as a safety net and protects you from having to suffer serious losses.
If you are just starting out as an intraday trader, it could be beneficial for you to adopt the 3:1 Risk to Reward Strategy. Under this strategy, the stop loss price that you should set should be 3 times lower than the price at which you'd be willing to book profit.
Booking profit after reaching the target
Fear and greed - both are your enemies in the stock market. Just like you shouldn't be too scared of taking risks to earn rewards, you also shouldn't become too greedy! While leverage and margins can help you maximize profits, they can maximize losses as well. Therefore, you need to be careful and not get greedy. Do not fall into the trap of assuming that the price would keep on rising (or falling, in case you're short-selling). But if all the signals indicate that the price would definitely rise, then it is up to you to decide what you shouldn do.
Remember to close your open positions
There are a number of intraday traders, who prefer to take the delivery of the shares if they do not meet the stock price target that they'd set for the day. This isn't really the best strategy in automated trading, as the stocks that you had bought were bought for intraday trading and they may not work well for you if you go for long-term investment.
submitted by alphabot20 to u/alphabot20 [link] [comments]

Benefits and Risks of Trading/Bitcoin trader

Benefits and Risks of Trading/Bitcoin trader

Ought to you jump in and begin using your onerous-mined bitcoins within the markets? Find out the risks and advantages initial.KEY TAKEAWAYS
The market is devoted to trading in the globe's currencies.
https://preview.redd.it/u8gle9a0m4f51.jpg?width=770&format=pjpg&auto=webp&s=9368e9fe9613884fb4fd0c86fb716e50319f2d53
Many brokers currently settle for bitcoin and different cryptocurrencies.
Bitcoin trades benefit from the anonymity and decentralized valuation system the currency represents.
They add a replacement layer of risk trading, exacerbated by the acute volatilityStandard Forex Trade
Before you think about whether to trade using bitcoin, it's helpful to understand how a standaroretrade works.

A forex trade is simply an exchange of 1 currency for an additional at its current rate. Unlike tourists who exchange their home currency for local spending cash, forex traders are trying to form cash off the continual fluctuations in the real value of 1 currency against anothe

Imagine you're an American trader betting that the British pound can lose price compared to the U.S. dollar. This is termed trading on the British pound/U.S. dollar currency pair (GBP/USD).The Impact of Decentralization
The key distinction is that, though forex exchanges would possibly be decentralized, the currencies themselves are backed by central banks in the countries that issue them. It's the duty of those banks to stabilize the value of their currencies and keep them stable
Now think about an example of a forex trade using bitcoin. First, you open a forex trading account with a broker who accepts bitcoins. These embody AvaTrade,one? eToro, and LiteForex.a pair of? You then transfer 2 bitcoins from your digital wallet to the forex broker’s digital wallet.

If you wish to trade using bitcoin, use only a locally regulated forex brokerage. And avoid using leverage till you know what you are doing.
Assuming the present bitcoin to U.S. dollar rate is 1 bitcoin = $seven,500, your deposit of two bitcoins is value $fifteen,00zero. Now, assume that you would like to require an edge in British pounds. If the exchange rate is £zero.five = $one, you may receive £7,500. When it rate changes to 0.45, and you square off your position t.sixty five in your trading account. You have got made a tidy eleven.elevenpercent profit and you're prepared to cash out.




Despite the very fact that your bet on British pounds earned you an eleven.11% profit (from $fifteen,00zero to $16,66six.65), the fluctuation in the bitcoin to U.S. dollar rate suggests that that you sustain a loss of zero.039 bitcoin or about -two.percent. (Initial deposit of 2 bitcoins — 1.961 bitcoins = .039 bitcoin).

However, had the bitcoin to U.S. greenback exchange rate changed to 1 bitcoin = $7,000, you'd realize a benefit from both the forex trade and the bitcoin exchange. You'd have received ($16,66half dozen.65/$7,00zero) = two.381 bitcoins, a profit of nineteen.onepercent.

Increased Unpredictability
This hypothetical example illustrates the large reason to exercise caution when using digital currencies for forex trading. Even the most fashionable and widely used cryptocurrency, the bitcoin, is highly volatile compared to most traditional currencies.

Within the year ending July 24, 20twenty, the value of a bitcoin ranged from $five,532 to $eleven,982
This unpredictability means that that the risks associated with trading forex using bitcoin are that abundant larger
Beyond the exchange rate fluctuations impacting profit and loss, there are other edges and risks to consider before trading forex with bitcoin
Decentralized Vauations: A major advantage of trading forex with the bitcoin is that the bitcoin isn't tied to a central bank. Digital currencies are free from central geopolitical influence and from macroeconomic issues like country-specific inflation or interest rates.
High Leverage: Many forex brokers offer leverage for bitcoin trades. Experienced traders can use this to their profit. However, such high margins ought to also be approached with great caution as they amplify the potential for losses.
Low Deposit Amount: A trader can begin with as little as $twenty five with some bitcoin forex trading firms. A few forex trading companies have even offered promotions sort of a matching deposit quantity. Traders ought to check that the broker is legitimate and appropriately regulated.
Low Cost of Trading: Most forex brokers that settle for cryptocurrency are keeping brokerage costs terribly low to attract new shoppers.
Security: You don’t would like to reveal your bank account or mastercard details to make a bitcoin transaction. This could be a massive advantage in terms of price and monetary security.

No World Boundaries: Bitcoin transactions don't have any international boundaries. A trader primarily based in South Africa can trade forex through a broker based mostly within the United Kingdom. Regulatory challenges could stay a concern, however if both traders and brokers are willing to transact, there aren't any geographical boundaries.
Risks of Trading Forex with Bitcoin
Different Exchange Rates: Bitcoin trades on multiple exchanges and exchange rates vary. Traders must guarantee they understand that bitcoin exchange rates the forex broker can be using.

U.S. Dollar Rate Risk: While receiving bitcoin deposits from clients, almost all brokers instantly sell the bitcoins and hold the quantity in U.S. dollars. Even if a trader will not take a forex trade position immediately when the deposit, he or she remains exposed to the bitcoin-to-U.S. dollar rate risk from deposit to withdrawal.
Danger of Volatility: Historically, bitcoin prices have exhibited high volatility. Within the absence of regulations, volatility will be used by unregulated brokers to their advantage and a trader’s disadvantage. For example, assume the intraday bitcoin rate fluctuates from $five,00zero to $5,300 U.S. greenbacks per bitcoin. For an incoming deposit of two bitcoins, the unregulated broker may apply very cheap rates to credit the trader $10,00zero (2 bitcoins * $five,000 = $10,000). However, once the trader is ready to create a withdrawal, the broker might use rock bottom exchange rate. Instead of the original a pair of bitcoins deposited, the trader receives o
Security Risks Inherent to Bitcoin: Deposited bitcoins are vulnerable to theft by hacking, even from a broker’s digital wallet. To reduce this risk, rummage around for a broker who has insurance protection against theft.


Risk of Leverage: Using leverage is risky for new traders who may not perceive the exposure. This risk is not unique to cryptocurrency forex trading and comes into play in traditional forex transactions still.
Asset Category Mixing: Cryptocurrency may be a different asset class altogether and has its own valuation mechanism. Trading forex with bitcoins primarily introduces a replacement intermediate currency which will impact profit and loss in unexpected ways. Any cash that's not locked down in an exceedingly trader’s base currency is a risk.
Although cryptocurrencies like bitcoin are gaining popularity, there are still several associated risks. In forex trading, dealing in a decentralized currency that provides global transactions with no fees is a bonus. But the tradeoff is actually adding a 3rd currency to what was a trading try
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submitted by cryptoerapro to u/cryptoerapro [link] [comments]

Helpful Beginner ToS Interface Tips for Setting Up Charts and Indicators

Was chiming in to help with this post and I received a pile of DM's and questions, thought I'd address this to the overall subreddit as I'm sure this can help others.
This isn't a fully perfect build yet in my opinion, but I'd like to give a shout out to the many members of the Silicon Valley Options Group that helped put this together.
Alrighty then. Here's my 4 face chart set up.

https://imgur.com/gallery/HU0gNNh
~ ~ ~ ~
Meta: I've set up 4 time frames to gauge price action, going from a 5 year to a 1 year, 3 month and a 15 minute chart. Here's the underlying I'm most familiar with (SLV). We go back... 12 years. I just know how silver moves like the back of my hand since my broke college days where I first started with a 100oz bar at $13/oz.

5 year
5 year chart here. Imp. Vol to determine if I should take debit vs credit positions. In general, 20-30 vol is just perfect juiciness without insanity. However, I think higher vol is right around the corner. MACD of course. Lots of moving averages on the chart itself, 500 MA, 200 and shorter durations, there's a custom trailing indicator in the dashed gray which I use for my stops. I've evolved to really favor selling for premium because you don't have to be right to make money. Like many of us when we start, I went HAM with single-legged debit positions and of course, we size it incorrectly relative to our portfolio and risk too much for way too little return—and get nuked. I'm not wrong, the market is wrong! Yea, I got sick of losing money. Selling premium instead is way more forgiving. Like many of us, we start selling credit via put-writes/covered calls or cash secured puts (lord have mercy on you if you sell naked), then you can evolve to do wheel of fortune combo of put-writes and cash secured puts. Later, you get more capital efficient via credit spreads and such. Generally, my short position usually has an 80% probability of expiring OTM or better. I've finally humbled myself to be less reckless and pick up wins of singles and doubles instead of swinging for the fences all the time. Like Tom Sosnoff teaches us, trade small, trade often. That's helped me lower my losses tremendously, rack up way more experience in the process and move with the markets much better. Plus, I'm doing really short DTE these days, weeklies and maybe 2 weeks if I'm more comfortable. In this market, I think it's insane to hold or sell too far out.

1 year
1 year here. I'm not too thrilled with PercentR, might phase out. I'm playing with other indicators in my sandbox account to figure out a better indicator for this duration. Volume + MACD to get a better gauge of action.

3 month
I'm mainly in this duration the most. For silver, the red dashed line is the support and resistance of the current channel that's been verified many times in the past. OnBalanceVolume is life changing, after MACD, it's probably my favorite indicator. It replaced RSI which just gave me too much vague information. I use to pair this with volume profile/market profile (MonkeyBars in ToS) but it just made everything too busy, I do like to see where people made their moves though. The dotted lines of green, magenta and red (god, I would hate to trade if I'm colorblind), are Person's Pivots. He's spoken at the SVOG group on Seasonality and I've been hooked ever since. ATR is really helpful. It helps me verify if the market maker's 1 sigma move is correct or not. Generally, if ATR is less than 1 sigma, I'm pretty safe when selling premium. This is a key metric for building a margin of safety as an options seller.

15 min
15 minute chart, I don't look at this too much unless I'm opening or closing a poition. It generally helps me figure out intraday entries/exits. This use to have less vol and be more stable, but I think with Covid and the huge explosion of retail trading (thanks to RobinHood amateurs), it's gotten a lot choppier as people are playing on rumors and all kinds of weird stuff or probably looking up /wallstreetbets or some shit. I need to figure out what else to add besides MACD that my other durations don't provide, still figuring it out. Person's pivots really helps here. (Green is normal, magenta is an upper bound value and magenta is sort of an abnormally high level. It's based on Fibonacci retracements (I think default is 5 lines? or 7? Forgot. John Person's has a proprietary formula to make it 3 which helps.) I don't really day trade cause I still work full-time but I'm sure this set up could be expanded to do well with that. MonkeyBars (volume/market profile) would be helpful here. After April, I like the idea of no overnight risk.

~ ~ ~ ~
Hope that helps. If you like this and want to take this interface for a spin, feel free to message me and I'm happy to share the link. Please save your current settings/studies/etc. in case you prefer your prior calibration.
Kick ass out there and sell volatility like a mofo.
Remember, skylines are built by firms that sell insurance. The best time to sell volatility is after a storm. Go do your thing folks.
submitted by slamdunktiger86 to options [link] [comments]

Levered ETFs, deep dive into one in particular

Not an endorsement of this product (QQQ3), nor am I saying its rubbish, just a breakdown of what it is. Sharing because I looked at it in a bit of detail awhile back when looking at whether it was worth using or rolling my own for a particular need. Also leveraged ETF type products are often 'recommended' but I doubt fully understood.
QQQ3, What is it?
WisdomTree NASDAQ 100® 3x Daily Leveraged is a fully collateralised, UCITS eligible Exchange-Traded Product. The ETP tracks the NASDAQ-100® 3x Leveraged Notional Net Return index, providing three times the daily performance of the NASDAQ-100 Notional Net TR index, adjusted to reflect fees and costs inherent to maintaining a leveraged position in stocks.
Ok, a bit to unpack, but pretty straightforward.
Tracking expectations
NASDAQ-100 TR this is the nasdaq100, with (gross) dividend proceeds reinvested (hence total return).
NASDAQ-100 Notional Net TR index this is the same as above but with only 70% dividends reinvested to simulate a 30% withholding tax on dividends.
NASDAQ-100® 3x Leveraged Notional Net Return index this is the same as above with adjustments that simulate the cost of borrowing to buy more securities (to achieve leveraged positions). The borrowing adjustments are based on overnight (fed funds rate), plus a spread (based on 1Yr US LIBOR Overnight Indicative Spread). This is what this product tracks.
summary: don't expect these products to simply track 3x the underlying, because they're not. the synthetic index it does track has some of the implied financing and tax costs baked in.
Recap on Daily Rebalancing & Volatility Decay
Quick detour to talk about leveraged ETFs in general... if you think the fund needs to maintain a fixed 3x of the daily return, it will be obvious that the fund needs to rebalance each day.
If the underlying index alternates, up 10%, then down 10% for a total of 10 days. The leveraged version would be up and down about 30% and -30% each day. If you start both at a price of 100, you're going to end up with very different values at the end. In fact you'd be up overall after 10 days with the non-leveraged (105.67), but down on the leveraged version (89.15).... volatility decay.
summary: volatility and general sideways trading hurts the levered position more than the unlevered.
Tracking reality
Last 5 years annualised return as of 31 Mar 20
QQQ3: 14.92%
NASDAQ-100® 3x Leveraged Notional Net Return index: 22.92%
summary: Not too hot, but it can't be just the financing costs of borrowing to buy shares because that's baked into the index .
Quick peek under the hood at how tracking implemented in QQQ3
The index this product tracks (NASDAQ-100® 3x Leveraged Notional Net Return) describes factoring in the cost of borrowing to buy levered equity positions. But in reality, how this product actually tracks the index is through the swaps positions with the swap provider (BNP Paribas Arbitrage in this case).
summary: the swap provider presents a counter party risk to the buyer of this product, this wouldn't be the case in physically replicated ETFs where the underlying equities are owned by the fund.
Funds flow & Collateral
Swap provider basically gets the cash from Wisdomtree (the Issuer) when they issue new ETP shares. Swap provider agree to give the index return to the Issuer. The QQQ3 holders don't have any claim against the Swap provider if something goes belly up...
The good news is the product terms say that the swap provider(s) need to be a bank, or any leading dealer, or broker, or financially guaranteed/backed by such. And that provider has to be at least BBB rated (BBB is just about the lowest rating for investment grade before you get into junk rated territory).
But as part of agreement between Issuer and Swap Provider, the Swap Provider needs to post collateral worth 105% (now it can be marketed as 'over-collateralised') of the daily mark-to-market value of the swap. If you take a look at what is posted its not mostly Nasdaq securities, there are some, but there's a lot of Japanese and French companies (if the basket of collateral doesn't behave like the underlying in major downturns, maybe that over collateralising wouldn't be a big enough buffer). On the plus side there is some German and French govt debt.
Restrike Event
In the case of this product, the restrike threshold is defined as a fall or gain of 16.66% that occurs on any given day. If this threshold is met, and it is not yet the end of the day, a restrike event is declared. This means that positions get rebalanced in a way similar to the daily rebalancing. If a large fall triggered the restrike, then following the restrike the impact of a further fall in that same day would be lessened, but so would the effect of a sharp rise/reversal be lessened.
Furthermore, the swap provider is able to pass on swap fees in respect of the additional costs incurred altering those swap positions due to the restrike.
summary: don't expect it to behave normally at the margins.
Severe Disruption Events
By this point I got bored reading - you too probably - but for QQQ3 it means a 25% drop intraday or 25% overnight gap, maybe some other things and could lead to compulsory redemption (the product closing) depending on how the Swap Provider or underlying index is affected.
Fees
0.75% annual management fee
But how does the Swap Provider make their money
Could be from lots of things in combination...
submitted by dialectic_duck to UKInvesting [link] [comments]

Marginable Securities by Broker

I'm sorry if this question has been asked/answered, but I couldn't find it referenced anywhere and even google doesn't seem to give me a direct answer.
My current broker (Merrill) only classifies a stock as a marginable security if it has been trading over $10 per share for more than 10 trading days. If a stock is not labeled as marginable, there are several limitations on how I can trade it. The biggest pain points:
Any stock under $10 (for more than 10 trading days)
- Cannot be shorted.
- Cannot use margin buying power for purchase.
- When sold, does not return to my intraday buying power totals. Meaning if I buy a "non-marginable" stock for $5k, I cannot use that $5k again until the next day.
The last one is probably the most frustrating for me and severely limits my strategy when day trading. A Marginable security can be bought and sold 100 times and the buying power would replenish each time. But if I buy a runner that was $3/share, I better time my entry/exit perfectly because I lose that purchasing power until the next day.
I KNOW from listening/reading/talking to others that every broker does not appear to have these restrictions. Many brokers appear to allow you to short almost any stock and scalp penny stocks over and over. So my question for the group here is: Which brokers provide the most Marginable securities? Or if you're only familiar with a particular broker, what rules does your broker have around Marginable security prices iimits, shorting rules, and replenishing intraday purchasing power?
I'm looking for a better broker fit that caters to a day trade type investor. Just as a side note, I have PDT status active on my account and keep well over the minimum $25k requirements. So I have no confusion or questions about that particular rule.
submitted by mijameisrich to Daytrading [link] [comments]

The Normie Playbook: Lacking a Catalyst

The Normie Playbook: Lacking a Catalyst
I'm going to give an honest look at my DD for this week, show you what I see in the macro landscape, and provide insight into how I'll try and make money. Caution, my last play didn't go well:

A Bullish Case

Stock market rallies don't simply end because people wake up one day in mass and decide things are over priced. There's a catalyst. Lacking a catalyst, assuming current assumptions around the COVID-19 recovery hold true, it's fair to expect the market to work higher. Sprinkle in FED action, which while down 89% from it's 3/25 peak, still dumped another $65 billion into the financial system.
Bulls are expecting a quick recovery, and while battered, they haven't been knocked off that position. There's continued discussion around a vaccine, optimism, stage 2 trials, and numerous companies and universities pursuing it. We're north of 300k daily tests, and the positive test rate is declining, states are reopening, we got through Easter, and we found remdesivir effective. P/E is high, but even if you believe that governments are propping equities up, this ponzi scheme still puts US equities at the top, likely to bleed the least and profit the most. It's not to say a dip wasn't warranted, it was just an over-reaction, hope you enjoyed the ride back to appropriate valuations.
Money right now is easy. Interest rates are low, and will remain there, maybe even negative, with a FED heavily accommodating of markets. Liquidity is flowing like rain, banks across the globe are jumping on the QE train. Shorting the market is shorting the governments ability to continue the rally, and as Buffet says, don't bet against America.
Oh, and guess what, Congress is going to hand everyone more money.

A Bearish Case

Despite the optimism, the Fed can't create demand. Consumer spending is not going to come back to where it was. Millions will remain unemployed, the jobs aren't all coming back. The idea of a V shaped recovery is ridiculous, even a U shaped recover is irrational. Given the market expects such a recovery, the theta from news is going to burn bulls, day over day as the recovery doesn't manifest with the expected velocity, gravity of expectations will pull bulls to the ground.
June will see auto delinquencies appear in servicer reports, by end of July extensions 3 month payment extensions run out, auto repossessions will begin again, and the extra unemployment comes to a close. With September comes standard unemployment insurance running out for initial layoffs, followed by the end of our foreclosure moratorium.
Now imagine we never get a vaccine, it's never proved easy for other SARs diseases, why would this one be any different? The market hasn't priced in a significant bounce. States reopening too soon. The US outside NY/NJ/PA still rising in case counts, and people are sick of being quarantined. Oh, and good luck getting the US culture to adopt masks.
The market expects COVID to be beaten, when the reality is it needs to be endured. We've shot most of our stimulus shots, we shot wildly and while some hit, we wasted too much and we will pay in time. This virus will be with us for years, and so will the impacts. The world is heading for a recession, and they'll drag the US right down with them.

My Take

Both cases above have some FUD, but both also have merits.
First, separate Main Street (consumer and production economy) from Wall Street (financial markets), as they are different. The FED can do wonders for financial markets and in turn Wall Street, but it can't manifest demand. Congress can. Stimulus can.
There likely will be another round of stimulus and it'll boost spending, can kicked down the road. Now it may not come until June, but US equities are strong and as long as the assumption holds, so will the near term impact of it's expected arrival. Sure, the house of cards may fall in time, but what's going to bring it down? We lack a clear short term catalyst.
The bulls ate more straw off our camel's back than bears threw on. States are reopening, there's talk of more stimulus, curves are flattening, positive treatments, vaccine's progressing, and the market is recovering. The bearish news is the unknown, the whispers in the wind, we'll see in two weeks, wait until September, and the reality that so much is wrong with Main Street, that things can't be this positive with Wall Street. Can't say they're wrong, but they don't weigh as much. The market's priced in awful Q2 results, with no guidance, and a market that by it's nature wants to rise, there's little besides whispers to hold it down.

In Search of a Catalyst

So what could bring what we feel, and the equity market into better alignment? We need a catalyst, some options:

  • Consumer Spending - Eventually, Wall Street and the financial market is still tied to Main Street and the need for production via demand from a consumption economy. If unemployment remains low, and wages decrease, you can throw stimulus at it, but spending will drop. As spending drops, the volume of decline, if severe, can open up a world of hurt for equities as guidance and P/E fall as a reaction.
  • Bankruptcies and Defaults - Governments can solve liquidity issues and prop up prices, but good luck fixing the solvency of a business when margins crash due to lack of spending and debts exceed the ability for business (or people) to pay them. Less hoarding cash by businesses (profitable for financial institutions), more drawing down (cash crunch), more borrowing. Add to that regulatory tightening for banks post 2008 and minimum levels required will strain them further. All this can create a rush to hoard cash, which will restart a massive equity outflow. The challenge is, I don't see this coming near term, even if you believe it is coming.
  • The Dollar - The dollar is the standard of the world, but that's not always great, especially when supply causes issues. When you have massive debt that results in bankruptcies, the money supply starts to dwindle as unemployment ramps, confidence fades, money gets hoarded, and deflation sets in. This unavailability of dollars is a huge risk. Currencies are getting crushed by the dollar, negative interest rates could become a trigger of insolvency, an outflow of equities to generate cash, and a massive crash as a result.
  • Significant COVID Resurgence - Obviously, anything approaching a country wide lock down in the US will send markets back to their knees.
  • Guidance - As the recovery comes, guidance will return. More than half of Wall Street has pulled guidance, less than a quarter are expected to offer full year guidance, and analysts are flying blind. As that spigot turns back on, the reality of impacts could be more bearish than expected similar to how we saw with Q1 under-performing. CEO's tapering FY21 expectations, discussing reduced consumer sentiment, shifts in culture, and a recovery that carries deep into 2022 could be enough to tip companies to truer valuations.
  • Reality - As all of the above hit in less severe degrees, there is the sum of parts which becomes significant enough that equities fall, perhaps not at an accelerated pitch, but fall significantly all the same.
None of the above are assured. There is an ever increasing reality that this market has a bottom. I struggle to comprehend that at times, and there are so many threads to pull that can crumble things. But perhaps the FED is able to unwind QE without impact, perhaps the dollar's global position is the strength needed for the US to recover faster despite being hit harder. Perhaps.
Right now, my sentiment is short term bull. Medium term uncertain. Long term bear. Unclear on if we've found bottom. This past week has trended bullish across the board.

The Next Play

The only thing this weekend tells me is: be patient. It's unclear our direction, even in the near term. I could make a case in either direction. This week, is going to be a short term week. I'll avoid holding overnight, avoid going long (barring very clear signals), and will play the swings (up or down) as my TA dictates.
I like to end "plays" when a theme shifts, it helps me avoid chasing losses, so that's what I'm doing and I now consider my prior play done, and failed. I've allocated another $5000 to a new play, I'll call this play "Patiently Waiting". I expect most positions this week to be smaller, in the $500 to $1000 range, in and out, and I'll be surprised if I fully deploy my allocated capital at one time.
I don't have a planned entry. I doubt I do anything before noon on Monday, if Monday at all. I'll create a shorter post once I find my entry, and will track critical TA for the week as well as the profitability of the play in there.

TLDR

There's a bull case, there's a bear case, the bull's had a stronger week. Many links, much news. No clear TA giving confidence in a position, will take short term day trades while waiting for clarity to emerge, will add a post later to track how much I lose.

Updates

5/12 @ 7:00 : I said I'd make a new post when I found a move, but also said I didn't think I'd do much Monday. I ended up not doing anything Monday.
Wedge forming
We saw a major wedge break on the 23rd of April. As it's downside break failed, a new wedge started forming, which lead to my exit from my prior play. The wedge has continued to hold since. I hesitate to trade it yet, but it's a converging indicator along with the .618 FIB retracement, you can see the two together formed a strong resistance to the upward movement on the 8th and 11th, forming a double top. The wedge says it's time to retest the bottom support, and in theory we should see movement downward today into tomorrow.
I'm not planning to play it, but you could enter some 5/15 290p if you see it bounce top of wedge today. You'd need to exit by tomorrow at latest, exit by EOD may be the best play, really depends on where it goes.
5/13 @ 7:00 : Bummer. Life got in the way of about a 200% gain trade, would have opened around 1.3 and closed north of 4 on a 5/15 290p. I didn't get to play it. The wedge was strengthened by yesterday's movement:
SPY this morning, 200d EMA on 1 HR interval acting as support
ES and the same wedge
Above you'll see SPY and a slight dip out of wedge, open will see us right back in. ES never broke wedge due to lower lows on 5/4. It's a better than average bet we stay in wedge today, which gives us a 6 point 287 to 293 range. SPY closes with support at 287 in wedge, yet on the ES, the wedge supports at 282, truth might be somewhere in the middle.
If we open 286.5 to 287 range, I'll enter a 3-4 contract position of 288c. Be mindful, everyone thinks the FED buying ETFs is a tailwind, I see it as a short term headwind given the outflow of equities to the newfound safety in those bonds as a result. But that's a macro view, and this week, I'm intraday.
5/14 @ 7:00 : Let's start with unemployment. The estimate for claims this week is 2.7m, the smallest gain in 8 weeks, but still pushing us to over 35 million unemployed since early March. Some estimates have ~5m people returning to work in the past few weeks, but the flow is still higher towards layoffs. They've been button on of late with estimates, I expect them +/- 250k, anything with a 2 in the front isn't going to move the needle.
As to market direction ...
.5 FIB Supporting
Bears couldn't break the .5 FIB, it held back on 5/4 and it held yesterday, though saw 15% more volume this go and was a deeper cut at breaking. We have had two straight large red days, we bounced off a support line, and are in oversold territory (that indicator flashed literally right as we bounced off the FIB, trended down since).
A really nice bear case would see us retest the FIB, break it, and thus the neckline, forming a really nice head and shoulders from the 4/5 time frame. I don't see it as likely, but breaking the 280-279 churn sees us down towards 272-273.
Don't trade this as a prediction, lazily drawn example.
A more likely scenario is we track the 5/4 bounce, but don't bounce as high, before regrouping to retest the FIB once more.
Our rising channel from the bottom.
We've been in a rising channel for some time, quickly bounced into the churn zone, decided we were bullish, and started tracking the upper segment with support holding all the while. Of late we're fading, and there are signs it's time to give our supports a good test. The natural rise in the channel paired with fading momentum could cause us to naturally coil for a while before enough energy returns for a strong move.
I'll be watching today, might look to enter a 5/15 283c position, not something that would look to track the full height of the rebound, rather the initial velocity and bounce, which should occur today into AH assuming we confirm that as our direction.
5/14 @ 7:30 : On 5/12 we saw the wedge, and thought it's likely it bounces off the top and test support. On 5/13 it did just that. On 5/14 we expected a bounce off the .5 FIB, and that's what we got:
Blue are yesterday's expectations, green what we got. Don't trade that second bounce yet.
5/4's bounce was 115 points, current was 96. The 5/4 pullback was 68 points or 54% of bounce, current is 37 points or 39% of bounce (though still forming, assuming 2824 holds as support). 5/4's continuation bounce was 121 points or 105%, let's assume we get 83% of that bounce (same as initial comparatively), that would see us to about 2924. You'll notice that aligns with my hastily drawn bounce chart yesterday.
If gravity is taking hold, you'd expect our second bounce on the second test of the FIB to be smaller, the second dip could go either way:
  • Smaller: 2824 holds as support. We got a smaller initial bounce, a smaller still dip, and likely a smaller still second bounce, perhaps towards 286-292 range.
  • Bigger: If our second dip breaks 2824, I'd expect us to retest the .5 FIB. If that were to happen, we're really putting a beating on that FIB level, it's not proving as oversold as it was, and each test weakens it further. We could bounce right off it, or the really bear case bursts through it before bouncing.
There are a lot of scenarios here. I can't make a call. I can say that you can see gravity in the charts. We weren't as oversold on this FIB test as we were on the 5/4 test. We didn't rise as high into overbought territory this time before turning back down. I can see downward momentum building.
A head and shoulders that I don't quite believe in.
There's a weak head and shoulders that strengthens with a downturn. I don't put much stock in it, but fun to watch anyways. For whatever reason, I just can't get on board with a really bearish short term outlook.
Our general channel
Instead, my gut tells me we stay in this rising channel, trending towards the middle chop zone. That leaves the market very sideways, with energy continuing to coil, for what could then break either direction, though which my gut says breaks downward. Feels like a roller coaster just being released after riding up, yet we're in the front car, and the back car hasn't been set free.
Possible plays: Day trade scalping ... Wait for us to bottom, into calls for rebound ... AAPL calls during rebound ... or given 2824 doesn't seem to have held (for now) go permabear and jump into puts! I'm probably staying cash today. If I had the time, I'd wait for the dip to bottom, then day trade scalp the upward momentum until it stalls (which is the same thing I did yesterday).
submitted by kjtocool to wallstreetbets [link] [comments]

Why I trade futures over options

Hello autists.
I thought I shall share some tips on why I trade futures instead of options. If it is not your cup of tea, feel free to ignore this. After all, everybody's risk appetite is different. Tailor it to your Personal Risk Tolerance.
Note: I am not a financial advisor. These are my ideas alone and anyone looking to go through with this must consult their advisor.
Before i get started, I should warn newbies that it is not advisable to start off with futures. I have been doing this for 2 years now, starting off with 2L and saved up my salary every month to put it in my account. I realized that Mutual Funds were managed by tards and I do not want to enjoy a yatch when i am 60. But before all this, I started off with conventional stocks and slowly dipped my feet into futures.
Pre-requisites: 1. Some understanding of your emotional levels (do you immediately square off your position if things are not looking good, or do you wait for it to play out? ) 2. Do you have a trade setup you trust? Do you keep a log of how it performs and how it does in a bull or bear market? 3. Is the money in your trading account something you can afford to lose? If not, save up more and come back.
Futures: I shall not get into the details of what futures are, and why it was started in the commodity business. Basically, for brevity, the equity futures go by lot size. For example, Reliance has a lot size of 500. If reliance is trading at 1000, the margin given by zerodha is Rs. 2,00,000 approx to hold these shares overnight. For intraday, you need a margin of ~1Lakh.
Imagine, if you wanted to buy the same amount of shares you would need an account size of Rs. 5L. Now, with great power comes great responsibility. Lets say, there is a huge oil fight and oil prices drop. The price of reliance drops 20% to 800. If you had bought the shares, your account size also drops 20% to 4L. But if you had bought futures, your account size of 2Lakhs now loses 1Lakh, which is a 50% loss. The plus side is, you can also make the same if you are right.
Now why do i trade futures instead of options:
Lets say my account size is 2.5 Lakhs, and I want to buy reliance and hold it overnight. 1. 2 lakhs is taken up for my margin, and i have a balance of 50k. If the next day, reliance goes up by Rs.20. I would have made a profit of Rs. 10000 (500x20). Now if i by the end of the night, my account size becomes 2.6Lakhs. That is i can use the full 2.6L margin now.
This is very important for me. These profits are already realized in your account. And this is called Mark to Market (MTM). Note: in options, the profits you make are unrealized. They are sitting in your account until you square it off.
  1. If i were to buy the same amount in shares (for 2 lakhs). The next day, i can only trade with 50k in my account. The 2 lakhs do not show up until i square off. But when i am holding futures, and the next trading day starts, I convert my overnight positions to intraday, thus saving up 50% of the margin. When things dont go my way, I immediately square off and use the full margin for my next trade.
  2. If you are buying options, you need to be right about the direction of price movement AND the time it would get there (also called as delta and theta). Implied volatility also comes into play, meaning, when a herd of people are betting the same, you will still lose if you are with the herd. In futures, you only have to be right about the direction.
  3. You ever get a thrill when the VIX is sky high? with so much volatility you profits keep shooting up and your losses are devastating at the same time? Do you enjoy that feeling? Then fuck it, you have a gambling addiction. But, thats how i feel like trading future. Even in a low volatility environment my losses can wipe away 10% of my account in a single trade. Know yourself first.
Hope this helped a few autists.
Good luck trading.
Current positions: https://imgur.com/a/arBO6RT
Tldr: if you can't read this, stick to yoloing options
submitted by Justatadcurious99 to IndianStreetBets [link] [comments]

PhD's, money managers and PE investors have no idea what will happen in the future, here's how you profit from that.

First, holy fucking shit this sub has gotten so fucking bad. The amount of fucking posts "SPY is down why are my puts down and tendies missing?" has gotten out of control. That being said options are incredible complex instruments and probably shouldn't be so easily accessible to a bunch of teenagers like ourselves.
Second, from the news/financial media down to people on this sub, everyone is fucking retarded. Idc if you're a HF manager or epidemiologist, no one has any fucking clue what's gonna happen. This is an unprecedented situation and the current extent of a highly interconnected and globalized economy will exacerbate it. For example, I work in insurance for small businesses ($50k-$25mm annual rev). My clients biggest concern isn't short term cash-- they can cut employees loose, negotiate rent, etc. What they're freaking out about is how businesses will react when this is all over. Will that warehouse still want to go forward with my client redoing their floors in June as expected? Will the 10 custom builders still be in business that give my client in supply distribution 90% of his revenue? It's the cyclical shit like that, if it lingers longer than expected, which is the biggest concern.
How we get tendies: I think we see a dead cat soon and bounce back to 2750-3000. Almost every corner of the market is oversold technically speaking. This shit is obviously of major concern for the markets moving forward but we've gone down too far, too fast. IV is still too high to just buy puts ands the huge intraday swings can fuck you if you're short.
So let's use a diagonal calendar spread. We buy June 200 puts and sell April 190 puts. We're then delta negative, theta positive and vega is somewhat offset from the short leg. Worst case, short leg expires worthless and we can either roll the short or exit for a marginal loss. If SPX stays in its range we stay about the same with a minimal P/L at April. Best case, we shit the bed further, if we blow past both strikes we're still looking at a decent profit.
Calendars give you the flexibility of time. I don't wanna time the market rn and get fucked bagholding expensive puts, but I don't feel comfortable with no downside exposure. This could be done more effectively with long ATM put and short OTM but I don't wanna commit that much BP.

TL;DR SPY April 190p/June 200p debit spread. Limits losses if deadcat bounce and still has upside if we make new lows. Roll @ exp or exit trade for marginal loss.
submitted by TrippleEntendre to wallstreetbets [link] [comments]

BitOffer Institute: Bitcoin options have exploded by more than $1 billion due to settlement

BitOffer Institute: Bitcoin options have exploded by more than $1 billion due to settlement

https://preview.redd.it/1kimouosfm851.png?width=820&format=png&auto=webp&s=f01be112f2ac790f9ded13128ed7b8d80cc04a6d
According to the options trading data from BitOffer, On June 26, with the due to settlement exceeding $1 billion, Bitcoin has experienced its largest option expiration event in history. Of which BitOffer exchanges accounted for 73%, followed by Deribit and OKEX. This is an important milestone for the digital asset space, reflecting the rapid growth of the cryptocurrency options market through 2020 and its growing influence on bitcoin price movements.
The question is this phenomenon leads to significant market volatility? This is the main concern of most investors. The price of Bitcoin continued to decline on June 26, the day it was hitting an intraday low of $8,841, which is the lowest price recently. It is worth noting that a large number of expirations mean that a new round of open options contracts will follow, and there are strong bullish expectations for bitcoin’s performance after halving. It is likely to spur a V-shaped rebound of bitcoin and breakthrough $10,000.
Lucian, the chief analyst at BitOffer exchange said that the encryption currency derivatives market has developed rapidly in 2020, especially in the options volume constantly refresh the record. At the same time, we also see the ETH options in rapid growth, at the month of ETH options being launch in BitOffer, its volume became more than $500 million. The options market is getting popular and the encryption market is gradually maturing, and likely having a better prospect versus the contract market.

https://preview.redd.it/7iqqodiufm851.png?width=1400&format=png&auto=webp&s=bdbb5139913eb6389be15d2233e85c2ad797e111
As is known to all, BitOffer is the largest bitcoin options exchange, and it has launched the world’s first American-style options of BTC, ETH, BSV, and BCH. The biggest feature of BitOffer is that no matter whether it is a bull market or a bear market, it has the opportunity to obtain up to a thousand times of excess income without any margin or handling fee. Bitoffer options provide 11 sections to choose from 2 minutes to 7 days. Besides, it is worth mentioning that the bitcoin option spot index is composed of the equivalent weights of 7 exchanges.
For example, as the price of Bitcoin was 9000 US dollars, Tom and Jerry predict that Bitcoin was expected to continue to rise, so they bought bitcoin contract and bitcoin options, respectively.
· 1. Tom choose to purchase a Bitcoin contract which cost $9000
· 2. Jerry choose to buy a bitcoin option which costs about $5
As they wish, after Tom and Jerry placed the orders, the bitcoin price rose sharply, which less than an hour, from 9,000 US dollars to 9,500 US dollars.
By comparison, Tom and Jerry get the same benefits, but the cost gap is very large.
· 1. Tom spent $9,000 and earned $ 500, which is a 5.5% return on the cost.
· 2. Jerry spent $5 and earned $500, which is calculated as 10,000% of the income.
Conversely, if bitcoin fell from 9,000 US dollars to 8,500 US dollars in one hour, Tom will be lost 500 dollars, and Jerry only lost the option fee, which would be 5 dollars.
Which means Jerry can get an interest in BTC for a very low price. This is what we say Limited losses and Unlimited gains.
Since the price of Bitcoin has been very volatile, more and more investors have started to use options to hedge the downside risk of the spot, to realize a stable progressive investment.
For example, the current price of Bitcoin is $10,000:
  1. If the price rises to $11,000, the spot profit will be $1,000
  2. If the price falls to $9000, the spot loss will be $1000
The cost is only about $20 if you buy a put option for hedging on BitOffer. Once the bitcoin drops from $10,000 to $9,000, the spot loss will be $1,000 and the put option will make $1,000 without loss.
As the risk is completely washed out, when you start hedging, you could make money when the price goes up, and you could save the cost when it goes down. This is the hedge between options and spots, besides, many investors using options to hedge contracts as well.
submitted by Bitoffer_Official to BitOffer_Official [link] [comments]

BitOffer: How to make steady profits with Bitcoin options while ups and downs?

BitOffer: How to make steady profits with Bitcoin options while ups and downs?
Many people may not be particularly familiar with bitcoin options, as most bitcoin users have only trade with contracts, which also known as futures.

https://preview.redd.it/y1n0voyt4n751.png?width=810&format=png&auto=webp&s=f0d51cc3b8454c477c2ec4bb8b36e39a26dd699a
More recently, BitOffer’s chief analyst Lucian noted in a June report that “nearly $1 billion of bitcoin options contracts are due to expire at the end of June, which representing 60% of total open interest in the BTC options market. In that case, there could be a significant economic incentive to push the spot price to a certain level before the maturity date.” To be clear, bitcoin options are only 1% of BTC futures and spot trading. This means that options have huge potential in the Bitcoin market, which makes us pay attention to the rise of options. If 2019 is the promoting year of contracts, then 2020 must be the promoting year of options development.
At present, in terms of options, BitOffer is the first one to launch options in the industry. BitOffer is also the platform with the largest and most active trading volume of options at present, with nearly 130,000 daily users and the largest monthly turnover of up to 1.5 billion dollars. As the first to develop options, first of all, in terms of options, BitOffer has BTC, ETH, BCH and BSV options, it is the most complete exchange in the industry so far. Secondly, the product period from 1 minute to 7 days, a total of 12 choices are available for users to choose freely, allowing users to flexibly use and operate the transaction period suitable for them.
How can we operate so that we can achieve a better and more stable profit?
1、We can operate with the trend characteristics of Bitcoin.
When refreshing the BTC candlestick we could notice the fluctuation is more active in the first and last 5 minutes. Therefore, we can choose a 5-minute option to obtain the maximum interval benefits with the minimum time and cost.
2、Pursuit when the market continued to rise and fall

https://preview.redd.it/jfigfxww4n751.png?width=1191&format=png&auto=webp&s=ae8580eee3695e8517ebfa226ee3d988d45c3d11
For example, when the market is in a continuous rise, the volatility will be greater. As the chart shows, at 5 am the market expected volatility. At this point, once we brought the 1-hour call option at position 9665, we could earn $135 after the price reaching 9800.
If the market falls and fails to close the position, then we can buy a 5-min put option around 9750 to hedge the risk of a fall, the cost less than $5. Assuming the market continues to go up, we would have a higher return on the 1-hour option more than $135.
If prices fall back to 9645, then the 5-min put option can get $105. As it dropped sharply in the subsequent, the 1-hour options will lose all the money. However, the correction of options could hedge the loss of 1-hour options in the callback, meanwhile, realize the huge profits. This cyclical portfolio hedging works well as long as intraday volatility is greater than our costs.
Options, as the most potential trading variety in the future, are undergoing rapid development. Then, among many options platforms, why can BitOffer stand out and become the largest options trading platform from others?
1. BitOffer options come with thousand times leverage
2. Never Being Liquidated, 0 margins 0 commission
3. Low threshold and variety products, flexible choice of period
4. Unlimited benefits with a small budget, low risks
With many advantages, BiOffer quickly occupies the options market and also becomes the first choice. What are you waiting for? Try the bitcoin options now, and you’ll get $50 for registering.
submitted by Bitoffer_Official to BitOffer_Official [link] [comments]

Again if deleted

The Shadow War: How Thursday and Friday Set Up for Another Engineered Circuitbreaker Next Monday 3/16/20
Are our markets under a coordinated financial attack? We thought MM were tinkering with things behind the scene, but there is an actor with tons of capital squeezing our MM in the USA, draining liquidity as MM face increased losses and are unable to provide transactions for people trying to hedge in these financial markets, and bringing about these engineered drops in the stock market. The timing of this is not coincidental given that we are currently engaging the coronavirus amidst the backdrop of an election year and instability with the oil pricing war. I've created this thread with bemusedfyz after hashing out these thoughts.
Part I. Firms/Hedge Funds are Net Short Gamma Resulting in MM Buying Calls to Provide Liquidity
In a bull market, firms purchase calls to be long gamma. MM try to capture rebates by taking on the opposite positions since they do not physically own the security.
"This means that whenever a market-maker fills an investor's buy order, the MM is facilitating the trade by shorting shares. [1]"
They have to go short in order to sell a security they do not own (this is why they are exempted from short selling). In the other case, during a downturn, firms want to hedge using puts and become short gamma, thus MM must take on calls. As people previously noted in my posts, if there is a buyer of an option, there has to be a MM selling the option to provide the liquidity. How then do MM make profit? They make profit from rebates by providing tighter spreads compared to other MM. By narrowing the bid/ask spread, MM keep the rebate, creating very thin margins. Thus, volume and liquidity are key to profits for MM.
Part II. How Options Inform Price Action by Identifying the Real Money Flows
People have been asking "how do you know which options for SPX/SPY being purchased are purchased by actual firms for a position?" I've been using 3 key metrics to inform me of the direction of intraday trading, and I will explain them more in another thread:
  1. Strike/Expiration
  2. Block Size
  3. Correlation with volatility, gold, and treasuries
Options data within the last 10 minutes of close has been particularly informative of the direction of the following price action. During the close on Tuesday, volume was strong on the buy side as we bounced from the June 2019 low, and we broke back into the 285 channel which was previously strong support indicating a bullish signal (Figure 1).
Figure 1: 3/10/20 and 3/11/20 SPY Chart
If someone was purchasing large amounts of puts (this was not just Tuesday, but last Friday and Monday as well), then MM were hugely positioned unfavorably with calls on the opposite end of the trade. Immediately after trading, we had a huge fade immediately after close. There has been strange price action where TLT fades, which indicates more liquidity being brought into the indices along with the short cover rally. However, right after the close, we immediately fade hard and futures dump. MM therefore need to hedge by trading futures, or by delta hedging and selling shares at the open with a significant loss, magnifying selling dips. This is similar to how autists discovered during a rally, MM delta hedge by purchasing the underlying equity contributing to the rally.
Delta hedging refers to either having an opposing option with equal magnitude of delta, for instance a straddle, or by purchasing shares of the underlying stock. One key disadvantage with delta hedging is that MM can over hedge if the spot price of the equity changes unexpectedly overnight. This is referred to as gap risk, and compounds with the inventory MM hold overnight, often referred to as inventory risk.[2-3] The overnight moves create huge gamma and vega swings to the inventory of MM who hold overnight, which subsequently create a period of selling or buying which magnifies the intraday swings as they try to reduce their vega or gamma exposure.
... is subject to residual risks due to stochastic volatility and unhedgeable overnight moves in the stock price. These risks highlight the need to keep the Vega and Gamma of the dealer’s inventory under control, and this is reflected in the dealer’s quoting strategy.[4]
Given that we dumped on Wednesday and dropped below 285 support, institutions need to hedge with more puts given the uncertainty about retesting the June 2019 low. More puts purchased by funds, more calls purchased by MM. What happened Thursday and Friday (Figure 2)?
Figure 2: 3/12/20 and 3/13/20 SPY Chart
Futures limit down on 3/12/20. No matter what, the market opens -5%. Within 5 minutes at the open, the market hits the second circuit breaker at -7%. MM are stuck with short term calls, and need to offload losses by selling like crazy to delta hedge magnifying losses. Then what happens on Friday 3/13/20? Limit up. We next quickly hit one of the largest intraday rallies of all time.
Part III. MM Cannot Access Repo Despite Requiring Liquidity
During trading on Thursday, the Fed announced an unprecedented amount of Repo operations. 1.15 trillion dollars, signifying significant issues in the market. I stated this before open on Friday.
8 am - Yesterday, the fed offered more than 500 billion in repo. Only 78.4 billion was taken. Today, the Fed just offered more than 1.1 trillion in repo for today. What are the signals? Why is Wall Street not taking the money for liquidity? Check this out: https://www.biancoresearch.com/the-moment-in-this-decline-has-arrived-2/
This could possibly be way worse than 2008.
8:30 - 24.1 billion in repo taken. Last update will be 9am.
9:00 - 45.1 billion.
Net repo: 86.5 billion out of 1.15 trillion
"Dealers are telling me they badly want the $1T in repos, but can't take it. Post-crisis rules, among so many different regulators (Basel 3, Fed, OCC, FDIC, etc) make it nearly impossible for them to take the money. They are telling the Fed their problems. The Fed had no clue."
https://twitter.com/biancoresearch/status/1238461580314120193
During Thursday's trading, we broke the support. Due to breaking previous supports and being oversold, I had puts. But also noticed huge call volume. If someone is buying calls, MM need to be net "short." Futures limit up. MM need to quickly buy the rally in order to delta hedge, creating an epic rally for the past decade.
Part IV. The End Game
Someone is taking advantage of the MM delta hedging by limiting down or up futures, vastly opposite of the price action more often than not without regard to support or resistance levels. MM are left bagholding their positions and delta hedging, magnifying the rallies or dips.
Repos are not being adequately uptaken due to existing regulations. What happens when liquidity issues arise despite decreasing volatility? MM need to enlarge the spread in order to further manage losses.
IV was going down on Friday during the rally, as VIX began dropping. The only way for the option value to decrease is if MM started enlarging the spread, in order to capture diminishing rebates. The only way the bid value is increasing is if a MM is facing liquidity issues, since they cut into the rebate. What happens when these firms become stressed and unable to provide liquidity? Firms will be unable to purchase options with good bids or at all. If people are not able to hedge or use financial derivatives, losses will accumulate such that there will be a mass liquidation event such that it is no longer tenable to hold any positions.
What happened immediately after close Friday?
Throughout the day there was massive amounts of put buying. Immediately close to the cash close, more puts were purchased. At the cash close, we fade hard. Immediately after, /ES gaps down more than 2% after the close on Friday. /CL gaps down more than 3%.
The news during the weekend last week for the oil price was dropped during Sunday before markets opened, causing a limit down last week. Energy is the market. Saudi Arabia is a strategic partner with the US in the Middle East, and asking Russia to aid in production cuts to raise the price of oil. However, Russia refused. Saudi Arabia is not taking these measures to attack US energy markets by increasing production. Despite this, is Russia interested harming US interests? Perhaps. It's possible to think there is another player. And they know that US markets cannot access repo money and are short in liquidity, creating a unique attack vector, straight at the heart of the US financial system.
https://news.bloomberglaw.com/securities-law/mnuchin-says-hes-seeking-to-keep-financial-markets-open
“We intend to keep the markets open -- that’s a sign of confidence for people,” Mnuchin said in a CNBC interview early Friday.
It is not only MM that require repo money. Banks lend out their credit lines to others. It is these businesses that are lent the money that will be the hardest. Given these market conditions, and if they persist, the government needs to intervene and shut down markets.
We are already facing close to limit down on the Weekend Dow on Saturday. Sunday Futures are likely to limit down. This will probably be compounded by either worse impending virus news or more bad news in the energy markets. To combat this, Trump has stated the US intends to significantly add to the US strategic oil reserve to put a floor on the price of oil. However, these are being used as a cover to justify lower prices, when in fact, the markets are being engaged possibly by economic subterfuge to reduce liquidity. Someone is purchasing huge options positions before close with MM take the other side of the trade. Futures limit up/down, creating large gap/inventory risk, reducing liquidity for the markets.
tl;dr Banks and MM are facing forced liquidity issues by someone taking advantage of limit up/down, exploiting gap and inventory risk. Banks and MM cannot take on repo due to regulations to correct liquidity issues. Funds and trading desks need MM to purchase puts/calls. Cannot purchase them due to MM having liquidity issues with worsening bid price, magnifying rallies or drops as MM delta hedge. If firms cannot stop losses without hedges, they will liquidate everything. This will create a mass panic sell off, which will therefore require the government to shut down the market.
tl;dr of the tl;dr Circuit breaker Monday. Possibly two.
Update 1: Sushies, satorikang both explained the positioning is probably long gamma on the puts, not short at this stage. Thanks.
Update 2 3/15/20: I'm writing this example if a firm is taking a collar position in terms of options.
Firms undergoing losses:
https://www.bloomberg.com/amp/news/articles/2020-03-13/bluecrest-shrinks-from-relative-value-trades-amid-losses-exits
https://www.bloomberg.com/news/articles/2020-03-14/dalio-s-macro-fund-plunged-about-20-this-year-as-market-tanked
H2O assets
Bluecrest
Ray Dalio
Update 3 - Liquidity news
https://finance.yahoo.com/news/plumbing-behind-worlds-financial-markets-131618535.html
https://www.bloomberg.com/news/articles/2020-03-14/traders-nightmare-liquidity-vanished-when-they-needed-it-most
Some numbers, 7% drop, 200% Fib at 247.94. 13% drop, December 2018 low 233.86.


[1] - https://squeezemetrics.com/monitodownload/pdf/short_is_long.pdf?
[2] - https://www.forbes.com/sites/petertchi2015/09/03/mind-the-liquidity-gap/#2259300073fc
[3] - https://www.sec.gov/divisions/riskfin/seminavenkataraman0313.pdf
[4] - https://people.orie.cornell.edu/sfs33/StoikovSaglam.pdf
submitted by Ardesic53 to Winkerpack [link] [comments]

TradingView doesn't accurately reflect intraday margin requirements for TradeStation

Pretty much what the title says. TS does a percentage of initial margin for intraday. Example: if $1320 is required for initial and the intraday is 25%, the intraday margin req would be $330. But TV showed the initial margin all day today when TS offers intraday from 8am-4pm ET. I'm just starting and I have only been trading one micro contract at a time so I haven't attempted to submit an order that would be over that incorrect margin requirement listed on TradingView, but I did just a minute ago with the TS demo account and the order was rejected. Granted it's not intraday hours at the moment, but I'd rather this not get in my way when I want to up my position size. I already submitted a ticket but haven't heard back. Anyone else had this experience? Is there a setting I'm missing?
(I contacted TS. They said it was TV's issue.)
submitted by sgjohnson1981 to TradingView [link] [comments]

Lessons and Mistakes Learned in My 15-Month Adventure So Far

Like Buffett says: "You don't know who's swimming naked until the tide goes out." Meaning: In a rising market-- everyone looks like a genius and posts monster returns. It's only during a crash do we see what separates the professionals from the amateurs.
And full disclosure-- for the past three weeks since Feb 21, I have been positively reamed from every which way in my positions (long AMD & MU). I'd started day-trading Jan 2019 (after being inspired by the show, Billions) and had been doing pretty until Feb 21 but the past three weeks have been totally humbling and has revealed to me that I am a total amateur. If I get out of this alive, I'll know now it was completely luck and that I'm totally not a genius.
All that said, I thought I'd take this opportunity to share some hard-learned lessons I've learned these past 15 months. This stuff more applies to active traders (as opposed to investors, which is why I'm not posting this in /investing).
Humble Advice from a Beginner re Active Trading
Things I did Wrong
Things I did Right
My Personal Future Outlook (aka, Guess)
Good luck and Godspeed out there.
submitted by eowobble to stocks [link] [comments]

Intraday - What is Margin or Leverage and how to use it ... Margin Trading  Trading Terms - YouTube What is Margin Trading or Intraday Trading?[HINDI] [ TOP RATED ] Intraday Trading Banned? SEBI New Margin Rules  Intraday Trading  Intraday Margin WHAT IS INVESTING  INTRADAY TRADING AND SWING TRADING  MARGIN ON INTRADAY

Trading margins represent a deposit with the broker to protect both the trader and broker against possible losses on an open trade. With this deposit, day traders are able to trade instruments valued much greater than the margin price via leverage. For example, the current day trading margin for the E-mini S&P 500 (ES) is […] Margin Intraday Square up (MIS) – As the name suggests, MIS orders are intraday orders and needs to be squared off during the same trading day. If the order is not squared off by the user or converted into other order types, the RMS system shall automatically square off the order a few minutes before the market close. Intraday trading, as the name suggests, is trading stocks within trading hours in a single day. Many new investors and traders are keen to know about how intraday trading works. To begin with, you buy shares when the price is low and sells them when the price is high, thus taking advantage of the price movement. In this article, we will see the intraday margin cash and its definition. This margin trading provides leverage to the traders to trade in the intraday activity. What is Margin Trading? Margin trading defines the procedure where the individual investors or traders buys more stocks than the one can afford. Margin trading involves buying and selling of securities in one single session. Over time, various brokerages have relaxed the approach on time duration. The process requires an investor to speculate or guess the stock movement in a particular session. Margin trading is an easy way of making a fast buck.

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Intraday - What is Margin or Leverage and how to use it ...

What is Margin Trading or Intraday Trading?[HINDI] [ TOP RATED ] STOCK MARKET PATHSHALA. ... MARGIN AND INTRADAY IN ANGEL MOBILE APP - Duration: 5:30. Pahla Nivesh 3,968 views. 5:30. In this video , i explain about how to use Margin trading in zerodha and use to to get leverage for intraday trading. Open best Trading and Demat account -Lo... what is margin on intraday THIS VIDEO IS FOR BEGINNERS WHO WANT TO LEARN ABOUT STOCK MARKET RIGHT FROM THE BASICS TO OPEN DEMAT ACCOUNT IN ANGEL BROKING CLICK ON BELOW LINK : 👇 SEBI'S new intraday margin rule in details my view - Duration: 13:42. POWER OF STOCKS 25,982 views. ... Cash OR Margin Trading - कौन ज़ायदा बेहतर ... This is an informative video regarding the sebi's new intraday margin rule , Sebi has recently sent a revised circular regarding the intraday Margin requirements to the exchanges .

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