So I bought S&P 500 2500 puts

[NYEXPAT]

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Originally Posted by Fedup No, it’s per share. But I’ve heard he spends $2 something for breakfast. Not even $3. But the best part is his wife doles out that to him daily if I recall.

"I tell my wife, as I shave in the morning, I say, 'Either $2.61, $2.95 or $3.17.' And she puts that amount in the little cup by me here [in the car],"

[NW-Bound]

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Originally Posted by NYEXPAT I think $3.20 more than covers "Buffets" daily breakfast bill at Mcdonalds!

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Originally Posted by Fedup No, it’s per share. But I’ve heard he spends $2 something for breakfast. Not even $3. But the best part is his wife doles out that to him daily if I recall.

He must not have an Ikea nearby. Breakfast there is only $1, and if you have an Ikea member card, you also get a cup of coffee free.

This reminds me that it's been a while since we were at Ikea, and it's only a few miles from us. Time to go again.

[Fedup]

Quote:

Originally Posted by NW-Bound He must not have an Ikea nearby. Breakfast there is only $1, and if you have an Ikea member card, you also get a cup of coffee free. This reminds me that it's been a while since we were at Ikea, and it's only a few miles from us. Time to go again.

We might head there soon, if the market keeps dropping. It’s a start for a staycation.

[bobandsherry]

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Originally Posted by njhowie I don't care what anyone says - good job Running_Man.

Can you explain to me how that's a good job? You must have knowledge that I don't to make that statement.

[njhowie]

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Originally Posted by bobandsherry Can you explain to me how that's a good job? You must have knowledge that I don't to make that statement.

Really, really, tough crowd.

A big drop occurs 3 days after he posts that he bought the puts. They are worth more today. End of story.

Why is it that when it is obvious that credit is due, folks are unable to give it? Is it any skin off your back?

Did anyone else post that they were shorting the market or buying puts within the past week?

He made a good/timely call. You don't want to congratulate him or give him credit, you don't have to. I will.

[NYEXPAT]

Quote:

Originally Posted by njhowie Really, really, tough crowd. A big drop occurs 3 days after he posts that he bought the puts. They are worth more today. End of story. Why is it that when it is obvious that credit is due, folks are unable to give it? Is it any skin off your back? Did anyone else post that they were shorting the market or buying puts within the past week? He made a good/timely call. You don't want to congratulate him or give him credit, you don't have to. I will.

+ 1

[bobandsherry]

Quote:

Originally Posted by njhowie Really, really, tough crowd. A big drop occurs 3 days after he posts that he bought the puts. They are worth more today. End of story. Why is it that when it is obvious that credit is due, folks are unable to give it? Is it any skin off your back? Did anyone else post that they were shorting the market or buying puts within the past week? He made a good/timely call. You don't want to congratulate him or give him credit, you don't have to. I will.

So i guess you can't explain what he's done then, eh?

[njhowie]

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Originally Posted by bobandsherry So i guess you can't explain what he's done then, eh?

Quote:

He made a good/timely call.

"Reading is fundamental"

[bobandsherry]

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Originally Posted by njhowie "Reading is fundamental"

In your case understanding a Put is fundamental. So explain to me what he's accomplished.

[njhowie]

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Originally Posted by bobandsherry In your case understanding a Put is fundamental. So explain to me what he's accomplished.

Is the put worth more today than 3 days ago or less? I don't care what the expiration is, it's worth more today.

We're done.

Ignored.

[ERD50]

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Originally Posted by njhowie Really, really, tough crowd. A big drop occurs 3 days after he posts that he bought the puts. They are worth more today. End of story. ...

No, it's not the end of the story. Not until expiry or he sells. Then we can see if there was a gain or not.

Quote:

Originally Posted by bobandsherry Can you explain to me how that's a good job? You must have knowledge that I don't to make that statement.

+1

They sure didn't expire, and he hasn't said he sold them. So what are you (njhowie) going on?

Quote:

Originally Posted by njhowie .... Did anyone else post that they were shorting the market or buying puts within the past week? He made a good/timely call. You don't want to congratulate him or give him credit, you don't have to. I will.

It's a stretch to connect the dots between him saying he wants to buy some protective puts and the market dropping days later. I doubt that even the OP would claim a connection. If he made that OP, and said he was buying puts that expire this week, that could be seen as a connection. Not this.

You are giving him far too much credit.

-ERD50

[tinlizzy]

Good job!

I have great intuition before the market goes up but I never suspect a thing before it comes back down.

[njhowie]

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Originally Posted by ERD50 No, it's not the end of the story. Not until expiry or he sells. Then we can see if there was a gain or not.

ERD - my final comment on this topic ...

If 3 days earlier he had said "I just bought Boeing shares at $350 because ..." and then 3 days later Boeing shares go to $400, would you be saying "Hey buddy, that was a good call" or would you say "Well, we really don't know ... did he sell"? Of course not - the shares made a significant move right after he said what he was doing. My belief is that the value of the puts likely went up in excess of 20% since purchased. It was a good call - whether luck, or whatever else you want to attribute it to. This is the Stocking Picking board - he made the pick, the pick was right, it happened in the very short term, which is what you dream of with options.

Running_Man, good job! Bask in having made a good call when nobody else was considering it. Ignore those throwing stones.

Adios, friends.

[kgtest]

Great call Running_Man you have been right before and youve helped make me money even though you might not know it. I totallt value when you chime in so please dont supress for lack of empathy.

[FIRE'd@51]

Let me stipulate up front that RM made a very good market call and chose to buy the 2500-strike S&P 500 puts to implement his view. Nevertheless, I think a discussion of his implementation would be more informative than arguing about whether or not he is doing market timing. For some reason, RM has not been forthcoming about the expiration of these puts, which is what ERD50 (and others) have asked about. The measurement of the effectiveness of his hedge is how much of the recent decline (about 5%) has been recovered so far by his puts. All he has told us is that he spent less than 1% of his portfolio for these puts. To measure the effectiveness of his hedge we need to know how much these puts have increased in value. Did he buy longer term more expensive puts or shorter term cheaper ones? Because the VIX has exploded, shorter term OTM puts have outperformed longer-term ones in percentage terms. If RM levered up shorter term puts, they may well have offset (completely?) the loss on his underlying equity portfolio.

[Free bird]

Any hint at gaming the markets brings out the pitchforks & torches crowd. How ironic

[ERD50]

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Originally Posted by njhowie ERD - my final comment on this topic ... If 3 days earlier he had said "I just bought Boeing shares at $350 because ..." and then 3 days later Boeing shares go to $400, would you be saying "Hey buddy, that was a good call" or would you say "Well, we really don't know ... did he sell"? Of course not - the shares made a significant move right after he said what he was doing. ...

You will probably have troubles with my response, as it is consistent.

No, I wouldn't say "good call". I believe that calls like that are only very, very rareley 'skill based'. The move very likely had nothing to do with whatever precipitated the 'call'.

And if it does go right back down to general market levels before he sells, nothing was accomplished, so no, the 'significant move' became insignificant.

Quote:

Originally Posted by njhowie ERD - ... My belief is that the value of the puts likely went up in excess of 20% since purchased. It was a good call - whether luck, or whatever else you want to attribute it to. ... .

As FIRE'd@51 just posted as I did, the OP didn't disclose details of the puts, so we don't know. Expiry date will have a lot to do with the % change. What fuels your 'belief'? The same 'belief' that this was a 'good call'?

Luck - if someone buys a lottery ticket that turns out to be a winner, was that a 'good call' in any meaningful way? What if he loses the ticket (i.e. doesn't sell the puts while they are up?)

Quote:

Originally Posted by njhowie ERD - ... This is the Stocking Picking board - he made the pick, the pick was right, it happened in the very short term, which is what you dream of with options. ...

And this is the proper sub-forum to announce picks, that's fine. All I'm questioning is how anyone can say this is a 'good call' when we don't know what the transactions were? The OP really struck me as a general fear of the chance of a market drop sometime (expiry dates would inform us), not that he expected a drop in the next week/month. Was this near term drop even a 'call'?

He's also talked about S&P 2200. So is that a 'bad call' - he didn't specify time frame on that either?

Quote:

Originally Posted by njhowie ERD - ... Ignore those throwing stones. ...

I'm not throwing stones. I'm asking for details so we can even evaluate the trade. You are putting him on a pedestal, and I'm just asking "why? What?".

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Originally Posted by njhowie ERD - ... Adios, friends.

So you don't like to have trades questioned? IMO, that's not a healthy/helpful approach, and I bet most traders would agree.

-ERD50

[ERD50]

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Originally Posted by Running_Man 2200 is lower than 2500, I think a very reasonable expectation of a rapid decline, should one occur. I am sorry to have created such an indecipherable thread, I think it is fairly clear myself. I do not plan on providing any more clarity as I think results will pretty much speak for themselves, I grant the idea that I am 95% likely to lose the funds invested, on the other hand, if I do "win" on this investment, I think that will be equally obvious.

These responses are also directed at njhowie...

I guess we could say that Running_Man 'wins' either way. If he bought the puts as insurance, and it helped him stay invested, or sleep at night, then maybe the cost was worth it to him, if they expire worthless. Like most insurance, we really hope to not use it.

Quote:

Originally Posted by Running_Man .... I do not plan on providing any more clarity as I think results will pretty much speak for themselves, ...

You lost me here. How can the results speak for themselves if you have not shared the expiry date? Even if we dip below 2500, what did you pay for the put (what is your beak-even)? And if you don't sell, and S&P recovers before this double-secret expiry date, you might still lose.

Just not getting the point of making the claim, and then getting all secretive about any details that would allow any results to say anything at all. If you come out with details after the fact, a skeptical person might even wonder if those were cherry-picked in the rear view mirror.

-ERD50

[Running_Man]

https://www.youtube.com/watch?v=D58LpHBnvsI

[ERD50]

OK, one more. Sorry, but the typing brings other things to mind...

If "the call" was really a near term drop, then the thing to do would be to buy near-term puts at the money. Those would be the most sensitive to a move in the underlying stock.

But that is not what the OP did, he bought them pretty far below the money.

Like the tree in a forest, can a 'call' be 'good/bad' if it wasn't even a 'call'?

-ERD50