Comment by phil

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phil
February 8th, 2016 at 1:39 pm

DB/BDC – Very nice!  Very grouchy on the Doom and Gloom front.  

Just go with the flow and finance anyone working on prolonging life – there's no limit to what some rich people will pay for another year!  Check out BTX ($2.10) or NUS ($32.68) – both fun plays.





$1Tn/Craigs – It's nearly a zero sum game because the oil itself is a necessity so the CONSUMPTION of oil is not really changing (92 or 93 or 91 Mbd) so the same jobs are there for people working to extract oil and bring it to market and put it in your tank, etc.  The difference is how much wealth is being transferred from global consumers to oil producers.  The same $1Tn is in the pocket of consumers and now it is simply not going to be spent on oil (but all the benefits of oil are still there for the consumer – just at $1Tn less) and then will be spent on other things – ESPECIALLY as this is not a disproportionate benefit to the top 1% unless they use 100x more oil than the poor folks do.  So it's a very democratic redistribution of funds away from the Princes of Saudi Arabia and XOM back into the hands of every person who drives a car or uses oil-based products (XOM's Chemical Division for one).  

ETFs/Newt – Do you mean like the ones I outlined in Friday's post?  Yes, that was an excellent time to add hedges but today a bit less so since we're back at 1,850 (lower even) and maybe now chasing.  The VIX spiked and blew up the short puts we sold but what matters is whether the strikes are in danger, not what the premium on the puts has gone up to.

TLT/Airvine – I don't know why people hate to wait for something to stop going up every day before making bets.  As I said last week – it would be silly to catch a falling knife or a rising rocket up the ass or whatever it's called when a thing goes up against you because all that would do is increase the amount of money we can lose as we are clearly wrong so far and we need to let TLT SHOW US how high it can go – we can't force it to stop going up.  



Submitted on 2016/01/29 at 11:23 am

We're short TLT with 5 March $122 puts in the OOP and we bought them for $1.57, now 0.86 but I'm going to be HAPPY to roll them out to the short June $127 ($5)/$120 ($2) bear put spreads at $3 if we can get them for maybe $2.50 or less.  That would put us in the spread at net $3.70ish.  I don't touch the ZN, ZBs myself but same thing – this is where we think the top is because why on Earth would you let the Government hold your money for 10 years at less than 2%?  

 

Submitted on 2016/02/02 at 10:36 am

TLT/Tom – Well the June $125s are $3.40 and I don't want to spend $1,500 on a roll just yet.  The March $128 puts are $2.57 so $2 to make that $6 roll up and I'm in no hurry to spend $1,000 either so I think it's best to wait and see what happens before committing so much more cash.  

 

Submitted on 2016/02/02 at 4:11 pm

TLT/Scott, Airvine – This is why we wait and see when a thing goes against us.  You let IT show you where the turn is – don't force it.  

 

Submitted on 2016/02/06 at 10:27 am

TLT/Palotay – With the panic in the air, I didn't want to spend money to roll to another position that would lose ground but next week we'll certainly need to adjust.

This was a $775 trade in the OOP and now 0.30 is $150 so down about $600 with 39 days to go.  "Doubling down" would add $1.55 and the $129 puts are $1.95 but is that enough time for TLT to drop from $131.17 back to $126, which is about our break-even?  That's the bet we make with a March roll that costs $800 more(ish).  

The last big run on TLT was last Jan, when the World was also coming to an end because of China liquidity issues into their New Year (which happens every year as 1Bn people withdraw cash to spend over a week-long bank holiday and the US Corporate Media us it to panic the sheeple every year with their doom and gloom prognostications).  At the time, we were short TLT too and it topped out at nearly $135 and I said at the time:



Submitted on 2015/01/14 at 2:33 pm

TLT/Esco – Good point.  This is about as high as I thought we'd get but a tough trade with Draghi at bat next week.  I think waiting is smart here but the June $120 puts are only $1.25 and the $110 puts are 0.25 so figure if you buy the $120 puts, even if TLT spikes up $10, then you make that roll up for $1 and you're in the $130 puts for net $2.25ish (now $4.50) so it's a great way to initiate a position.   In fact, let's get 10 of those for the STP.  If they do badly, THEN we'll want to add some to the $25KP while we roll the STP.  As noted above – top of the range is when we get in.

Good example of patience.  The old trap-door spider play.  



TLT was $133.72 at the time and it peaked at $138.50 on the 30th and hit $122 on March 6th, on the way, eventually, to well below our target to $113 in June.  We had been watching it since November and put our foot down as we neared $135 but we didn't change the position just because it went a few bucks against us a couple of weeks after we made the bet.   This is barely a week after we made the trade!  

Thanks Maya. 

TSLA/Rustle – We made our money and moved on.  

VLO/Winston – I like it.  Refining will find a way.  

TLT/Pat – See above.