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Two Million Infections Tuesday – US Has Over 25% of the World’s Cases

Isn't Trump doing a great job?

As the President says, he has ABSOLUTE POWER (much like Palpatine) to do whatever he wants and that includes ordering the Governors to lift quarantine restrictions so we'll all be going back to work "soon" – despite what those "scientists", "other World Leaders" and "Governors" have to say about it.  Only Trump's decision matters and that was made very clear by Dr. Fauci's opening ass-kissing of the President at yesterday's briefing.  

Don't blame Dr. Fauci, Trump threated his job over the weekend and Fauci is swallowing his pride and kissing the President's ass to keep us alive because he is the only voice of sanity we have to cling to in this crisis and he has been some help in getting Trump to do some of the right things – which is far better than NONE of the right things.  That's why the US "only" has 1/4 of the World's virus cases and that's "only" 7 times the number of infections in China, which has 4 times our population.  

In case you weren't convinced by Fauci's gun-to-the-head performance yesterday, Trump had a propaganda video prepared (at the Taxpayers' expense) that re-spliced history to make it look like he was the ONLY person who saw this crisis coming early on and took the decicive action necessary to save us followed by more hostage videos from Governors who were told to say nice things about Trump if they wanted to get Federal Aid (remember that last week?):

See, Trump is doing a PERFECT job so let's stop saying otherwise and, if the virus continues to rage out of control or if quarantine is lifted too early and the virus comes back for a second round – that will certainly not be Trump's fault either because he has ABSOLUTE POWER – but no fault at all.  Clear?

Good, now we can get back to other idiocy, like Tesla (TSLA), which is back at $700 this mornng, up 20% in 2 days as the company announced that they delivered 88,400 vehicles in Q1 and produced about 103,000 vehicles before being forced to shut down the plant.  That measn Q2 will be at ZERO for April and maybe May so I can't imagine what traders are so excited about as TSLA lost $862M on $24.5Bn in sales in Q4 and thely lost $1.1Bn on $21.4Bn in sales in Q3 and those Q1 numbers indicate about $21Bn in sales so TSLA is likely to lose another $1Bn in Q1 and more like $1.5Bn in Q2 – so go figure

I'm in Awe of How Tesla is Now a Supernatural Phenomenon | Wolf StreetYou would think that a Global Pandemic would make investors more cautious – or at least more rational but, apparently, $6,000 Billion Dollars still has nowhere to go but US equities and all this money given to Corporations and all these low rates (pretty much 0% now) leaves investors no choice but to put their money in the market and that's the rising tide that will lift all ships – even the ones that are leaking $1Bn per quarter like Tesla.

You could see it in progress yesterday, as the Nasdaq finished the day up 0.5% while the other indexes were in the read.  The Nasdaq 100 is back to 8,500 and it topped out at 9,750 in February and fell to 7,000 (28%) but then up 1,500 (21.4%) is more than halfway back, putting the Nasdaq on track to make a "V-Shaped Recovery" even though the majority of the Global Economy is shut down.  Amazing! 

I don't think we get back to the highs.  I think we will settle into the 10% range between 8,000 and 8,800 but, the way things are going – who knows?  You would think it would worry investors more to have the economy shut down and no actual end date to the viral emergency but they are running right back in.  I know I called a bottom at 7,000 back in March and that's not conrtadictory of me – I did think we'd stop going down but I certainly didn't think we'd be up 20% 3 weeks later – this is getting silly already!  

We're content to go with the flow at the moment as our portfolios are well-hedged but also very bullish.  Last Tuesday, in our Portfolio Protection Workshop, we featured our Earnings Portfolio, which was at $155,148 at the time and we made only a couple of minor adjustments but, thanks to a 150-point gain (5.6%) in the S&P, we're already at $179,785 – up $24,637 (15.9%) for the week and up $79.8% for the year.

The only change to our longs was selling 50 short CLF 2022 $7 calls for $1 ($5,000) as we didn't want to be greedy after CLF had such a nice run-up.  Not being greedy is a very important part of our balanced portfolio strategy and very hard for most traders to learn.  All of our longs made good money this week and, so far, we haven't taken too much of a hit on our SQQQ hedges but that may change if the Nasdaq goes over 8,500 so, once again, we pro-actively adjust our hedges:

  • The 2022 $10 calls are only $7 so we want to take advantage of the low premium on those and roll our June 2021 $15 calls at $5.65 over to those for $1.35 (might be $2 but still worth it if we open higher on QQQ).
  • We'll buy back the 65 short June $35 calls for about 0.75 and that leaves us just 90/135 covered with a very wide spread.

We have $30,725 worth of short calls covering our $94,500 worth of long calls (the new $10s) and that $60,000 is our 2-year cost of insurance in this portfolio.  We can sell 40 June $25 calls for $1.50 ($6,000), using just 66 of our 647 days and 10 sales like that would pay for our whole hedge but there's no hurry, let's see how early earnings play out.  

  • ACB is a craps roll.
  • CLF is a $20,000 spread at net $4,600 so $15,400 left to gain.
  • HBI is a $10,000 spread at a net $2,300 credit so $12,300 left to gain.  
  • HRB #1 is a $21,000 spread at net $9,000 so $12,000 left to gain.
  • HRB #2 is a craps roll.
  • IMAX is a $25,000 spread at net $8,200 so $16,800 left to gain 
  • IRBT is a $70,000 spread at net $12,900 so $57,100 left to gain
  • M at $10 will pay $25,000 and now net $9,687 so $15,313 left to gain

That's $128,913 of expected gains and $270,000 worth of hedges that are $67,500 in the money so it's impossible for them to lose unless the longs are doing well and we have a plan to pay off a lot of those hedges and I'm sure we'll find some more longs but it's a very simple 6 position portfolio (not counting our 2 gambles) with a hedge that's likely to make well over 30% in each of the next two years.

So, if the Nasdaq wants to rally back – God Bless but we're still staying very well-hedged, just in case the traders who are buying this dip turn out to be the same dummies who were buying the market in February.  Remember our rule of thumb, you have to burn the dip buyers 3 times before they learn their lesson!

 


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  1. TSLA shares trading higher (to $700) after Credit Suisse raises to Neutral and ups target to $580 ???


  2. Good Morning.


  3. /Phil

    Please can you help me manage this position:

    SELL 5 SQQQ CALL STRIKE 32 JUN 19/2020 FOR 4.07 NOW AT 1.80
    SELL 8 SQQQ CALL STRIKE 37 JUN 19 2020 FOR 4.57 NOW AT 0.85
    BUY 10 SQQQ CALL STRIKE 15 JAN 19 2021 FOR 10.00 NOW AT 5.15

    Should I sell more premium in Jan ?
    Or should I close the 10 sqqq strike 15 call and buy a new BCS to cover for the Jun call may be buy 10 of 20 (4.20)/30 (3.30) ($ 900)

    thanks


  4. Phil is our next level of resistance 2860ish on SPY?


  5. Why do companies pre-release good data before earnings (ie TSLA)


  6. Good news, free money going to those who really "need" it. 
     

    Hedge Fund Managers Are Claiming Bailouts as Small Businesses 
    https://www.bloomberg.com/news/articles/2020-04-14/hedge-fund-managers-are-claiming-bailouts-as-small-businesses



  7. The good old days when the GOP used to complain that Obama was acting like a dictator. Now Trump actually claims that power and it's OK…  Don't want to assume the responsibility but want the power!


  8. /AAPL/Phil – GM!

    I don't have any AAPL BCS, what would you suggest now with AAPL @285.


  9. Good morning!

    TSLA/Coulter – As I said yesterday, it's unplayable.  Around $900 I'd short again or around $350 I'd go long but, other than that – not interested.   And I still think $150 is a fair price for them but $350 takes into account the hard-core fanatics who are nowhere near ready to give up on them (and Musk's manipulations, of course). 

    SQQQ/Rag – If it's a hedge to protect your portfolio, one thing you want to do is keep it realistically in the money so that, if the Nasdaq drops 20% and SQQQ goes up 60%, that you are collecting an adequate amount of insurance.  As you can see above, we did the roll out to 2022 and that indicates I don't really think we'll need the hedge so it's just going to be insurance against a total disaster out there.  If you were to buy back the short calls for about $1,700 and roll to the 2022 $10s for about $2,000, you could then sell 10 of the Sept $30 calls for $2.50 ($2,500) and then you've spent net $1,200 to buy $5,000 in position and another year of insurance and, of course, when the Sept calls expire, you can get another $2,500 selling March somethings.  

    Just keep in mind a hedge like that won't quickly put cash in your pocket but your longs have double the delta of the Septembers so you'd be able to cash 50% of the gains if you had to or you could just sell 6 covers for $1,500 as you'll still get your money back over time but the hedge will be a lot stronger.

    Resistance/Coulter – 2,850 is the line I've been using on SPX for years.  No reason to change it now.  

    Why/Coulter – Because they want to manipulate the price, scare off the shorts.  Also, companies release stuff all the time, it's mostly hedge fund managers ordering their journalist buddies to write good or bad articles finding whatever nuggets of truth they can to manipulate the price.  With TSLA, Musk has his own army of hedge fund buddies and even his own lackeys at Electrek to pump up his stock any time he needs them.

    New people need to see this video:

    This is what's going on behind the scenes at the market every day.  

    Big Chart – Nas blasting back over the 50 dma but still going to be hard to avoid a death cross in about a month.  The others already crossed so watch those 50 dmas as the big bullish indicators.


  10. As an anecdote, I was on a call on the vendor side (as a consultant) with a very large corporation (multi-billions in sales) and they are using this Covid-19 crisis as an excuse to renegotiate rates and not small reductions – substantial changes like 10-20% or more. 

    The vendor is already losing customers (people going out of business) and now, the customers who are still around are asking for lower prices. This is sales that just won't come back!


  11. Phil/SQQQ

    I have (10 of them) the june 25/35 BCS and the long side is currently at the net price of the spread. So it is time to roll. I can buy back the short 35 but where to roll the long side to?

    regards


  12. AAPL/Ravi – Where was that enthusiasm at $220?  You can still sell the June 2022 $220 puts for $25, I'd sell 3 of those for $7,500 and buy 5 June 2022 $250 ($65)/$320 ($32.50) bull call spreads for $32.50 ($16,250) for net $8,750 on the $35,000 spread.  Even without the short puts it's good for a double at $320 but with them, there's $26,250 (300%) upside potential and you could sell just 1 July $300 call for $11.25 ($1,125) using 94 of your 794 days so 8 sales like that and your spread cost is $0!  

    Vendors/StJ – That's the kind of Capitalism we practice, survival of the fittest, which really means the largest and they can afford to wait through these crises and lever their advantage knowing the Government will always have their backs since they make the donations – not the small business people.  


  13. And finally, sugar hits 10 cents… doubling on SB now. 


  14. SQQQ/Pat – You KNOW it's time to roll.  We rolled much lower ages ago.   SQQQ is $14 and 1.6 x 14 is $22.40 so that is our new hedge target – it's always expecting a 20% correction so what good does a June $25 call do you.  Also, when you have a spread that tight, you can't make money anyway as the deltas are 0.26/0.16 so you only make 0.10 per $1 SQQQ move up – what's the point of that?

    If you are not able to unwind the spread by selling the $25s ($1.05) and leaving the short $35s (0.55) then there's no point to establishing a new spread as that too will ultimately be useless to you.  The 2021 $15 ($4.20)/$30 ($2.80) bull call spread is $1.40 and that offers you decent protection but still the delta is only 0.20 so, unless you can unwind it, you should consider spending more money and using short June $25s for $1 as the time decay will also work in your favor (and they are rollable) but it costs more money up front, of course.

    /SB/Rn – I agree, nice place to get in.  

    /CL went lower but I still have just the 2 longs.  Not really keen to DD unless we hit $20.

    That's a crazy spread to Brent considering it's now close to 50% of the price of /CL.

    I'm willing to go long /NG here ($1.68).


  15. PHIL/GOLD

    Should I roll these $15 GOLD shorts out to $20s? Looks like about $3.70 to gain $5,  Or to $25s, – $6.30 to gain $10? Looks not so good unless I get a break on the swings, does look like an uptrend.

    30 GOLD '21 $10c ($4.80)

    -30 GOLD '21 $15 ($2.28)

    THX


  16. Phil / AAPL short term caller.  I was looking at selling the June 300 Caller for 10ish – I noticed above that you recommended the July 300 call for 11 – Wouldn't it be better to sell a shorter term call for about the same priced – what is the reason for going out another month?  


  17. the second time just this year I've watch 25 cent TSLA options go into 3 figures.

    That's called Not. Learning.





  18. Short-Term Portfolio (STP) Review:

    STP is at $543,058 and LTP is at $601,465 so $1,144,550 is up $50K since yesterday afternoon:

    LTP $545,985, STP $548,188 so $1,094,173 vs $1,091,906 at 11 – that is BALANCED!  

    Absolutely we want to lock that in so similar move to the Earnings Portfolio above for the STP:

    • Let's buy back the short SQQQ June $35 calls – they have served their purpose and they prevent us from selling something else if SQQQ pops again.
    • Those TSLA short puts are a big winner now – they were the leftovers from a short play we had (they were the hedge) so we won in both directions.   Put a stop at $15.  
    • SDS – We made $14,460 on the short Sept $45s and it will cost us $20,000 to roll down to the Jan $20 calls – so let's cash the Sept short calls and roll the Jans.  We only spent net $4,500 initially so now we're in for $24,500 and I'm sure we can make that up with short call sales down the road but, either way, it's pretty cheap protection as 1.4 x $25 (SDS current price) is $35 which would be $150,000 in the money and the spread is $40,000 in the money at $24.

    • SQQQ – The Jan $15s are $4.25 and the 2022 $10s are $6.50 so net $2.25 to make the roll and we'll buy back the short Sept $45 calls for $5,540, even though I don't think we'll hit the target as it clears room for another sale.  This spread was a net credit and we're spending $23,625+$5,540 = $29,165 to buy another year of protection and $50,000 worth of position.  1.6 x $14 = $22.4 so $12 x 105 contracts is $126,000 worth of protection here.  

    So that's $276,000 worth of protection in the STP and, more importantly, $526,000 in CASH!!! ready to deploy – that's our best hedge!  There are no undue risks here (later for those!) so the LTP is well-protected and we are locking in those gains but, after this, we can let the LTP run as we're now protected pretty close to the all-time high of the Nasdaq – that's very comfortable.  


  19. Gold/Wing – Our Stock of the Year is doing well!  Generally, we pay 0.50 to make $1 and we prefer to do it by DECREASING the risk (going deeper in the money) to INCREASING it so not, I would not do that at all and also, the $10s are $14.70 and the $15s are $10.10 so net $3.60 so wouldn't it be smarter to buy 30 more of those $5 spreads than spend the same amount of money to roll your 30 $15 calls to $5 higher strikes?  How about buying 30 of the 2022 $15 ($11)/$22 (7) bull call spreads for $4 and putting a stop on 1/2 the 2021 $10 calls at $12.50 to lock in that gain.  15 x $12.50 is $18,750 which would more than pay for the new $12,000 spread that pays $21,000 if GOLD keeps going up.  Once it goes over $15 you can raise the stop on 1/2 to that and keep the other half stopped at $12.50.  

    Or, you could just take the net $4.60 off the table and not chase – that's an option too!   

    AAPL/Batman – The July $300s are $12 now and I don't know what the June $300s were but I felt better collecting $11 than less than $10 as it was earlier (still less than $10 at the moment).  Earnings are 4/29 so July earnings will be after the expiration so I'd rather have 20% more upside protection on the same 4/29 earnings note than not – also more time to react/roll but it's not a big deal either way for that small difference – just a choice I made.  

    TSLA/BDC – I've learned not to play them unless way at the top or bottom of the channel.  


  20. And notice that even the Ransomware crowd isn't accepting BitCoin anymore!  cheeky

    Sodinokibi Crypto Ransomware Switches from Bitcoin to Monero to Hide Money Trail

    Right BDC?


  21. Phil / AAPL short term caller.  I was looking at selling the June 300 Caller for 10ish – I noticed above that you recommended the July 300 call for 11 – Wouldn't it be better to sell a shorter term call for about the same priced – what is the reason for going out another month?  


  22. Trump's sure feeling his stock market rebound oats. His "absolute authority" talk may be getting a little too punchy for the average American's taste. People love propaganda videos. They can make one feel good inside like a jolt of caffeine from our now-homemade coffee cups. But never mistake that for people being stupid. Americans have a peculiar way of collectively deciding what they will and won't tolerate and it is notoriously difficult to both predict and to appropriately poll.

    It's the people that have absolute power, a fact that may befall him come November. The current president, like any current president before him, serves absolutely at the pleasure of the people that he "rules" over, and whom solely possess absolute authority over his position. Something that We The People begin to exert here in only 157 short days.


  23. Phil / GOLD well holy gee willickers we have ourselves quite a winner here…


  24. Staring at my TOS screen, I've come to the realization that its just an automated light show now.


  25. Phil / LABU

    I opened a Labu position a month ago – but i just went long with 10 x 2022 $10s @$15 basis

    position is doing great – should i be looking to sell against this? A friend advised me to look out for the decay factor on LABU.  Sometimes feels fun to see the word 'infinite' on the trade confirmation when you buy options, but how realistic is a return to pre 'rona $?  

    thanks, as always


  26. AAPL/Batman – See above.

    Relying on the people/BDC – Best of luck with that plan.  

    LOL Kustomz.  So mesmerizing….

    AAPL up 5%, Nas up 3.5%, Dow & S&P up 2.5% and RUT lagging at 1.4% but nice rebounds from yesterday and we're back to Friday's highs – except the Nas, which is off to the moon….

    This, of course, worries no one:

    LABU/Potter – Congrats.  Yes, 2022 is a long time and LABU does decay.  What are your hopes and dreams?  That LABU will go back to $60 and you'll make $30,000?  The 10 2022 $10 calls are now $21,000 so why not take that off the table and pick up 20 of the 2022 $30 ($11.50)/$50 ($7) bull call spreads for $4.50 ($9,000) so you'll have $12,000 back in pocket (almost your whole basis) and the $40,000 spread that's at the money.  Then you can not worry about it until they get to $40, at which point you can sell 5 Sept $50s (now $1.60) for $3.50 (the price of the $40s) and pick up $1,750 using 150 out of 647 days.  Do that 4 times and you'll have about $7,000 so $19,000 in pocket plus the value of the spread.  

    You guys might not notice but that's generally what we do with the LTP and the profits accelerate over time because, as our positions go deeper in the money, we get more aggressive with our quarterly short call sales – especially in flatter markets.  So we're still making our back-end money AND we're making a nice income while we wait.


  27. here comes 20 dollar /cl hopefully she holds


  28. CL looks tricky. The front-month Apr future is at $20, and expires next Monday. May future is $27, so if it does not bounce now, the roll is brutal. Any thoughts?


  29. CL What if we go long on April and short on May?


  30. DIS – does it matter no one is going to their parks or movies AT ALL currently, and for an unknown period of time longer? Does it matter people may not return to their original full strength numbers at both said places for 2, 3, or maybe even 4 years?


  31. Phil / LABU — I'm trying to understand your suggestion here:

    > pick up 20 of the 2022 $30 ($11.50)/$50 ($7) bull call spreads for $4.50 ($9,000)

    Got that part, but confused about the next part:

    > [when] they get to $40, at which point you can sell 5 Sept $50s (now $1.60) for $3.50

    wouldn't those Sept $50 short calls be uncovered (since we still have the 20 short 2022 $50 calls)? Or are you not worried about that? (If this is discussed somewhere in more detail, feel free to just point me to it).


  32. I just take Trump's words as opposite. "Total authority" to reopen states (and whatever "reopening a state" actually means) = he has no authority at all. Add a "believe me" or  "some people say" to that and it etches the Opposite Fact in stone.


  33. /rb .1.65


  34. sorry ng


  35. kgabor/CL – The problem is that it does not need to necessarily converge. May is 20% higher than Apr because people expect parts of the world to be open – long Apr/short May works if you no longer expect this. The spread between Apr and May could also increase.  During the summer of 2018 (there was oil backwardation then, though), the near month – next month premium kept increasing from $6 to $12 on expiry, and anyone betting on the convergence of premium lost heavily.

    April is already up to 20.6…


  36. I remember posting about the scam known as bitcoin when it was between 8 and 12 dollars per coin


  37. CL. When the April is ending shouldn't have these to be the same?


  38. CL – Not when demand expectations are so different. The may future reflects the price expectation in May (based on demand then), whereas the April contract reflects the price next week, based on current demand


  39. Phil/SQQQ,

    Thank you. Yes I will have to put more money. Maybe I will go for the Jan 15 and then buy back the 35 and sell more 25 (closer expiry) to cover up the cost and then keep selling them.

    regards


  40. bitcoin was a wee bit of a scam to the dumazz who bought at $19,891.00…  :)


  41. biodieselchris 
    March 20th, 2013 at 12:53 pm | Permalink | Tweet thisIgnore this user

    1020 – 500% – not quite, but close, only 444.6% …..     
     
    BUT – overpriced now probably — absolute price matters. What I liked at 11.50 isn't the same thing I like at 64. The whole thing could blow up tomorrow. So very big risks…
     
    Looking at the all-time chart, here's the thing, I caught wind of bitcoin in May 2011 when it went through it's first, and very ephemeral bubble. Then one of the exchanges experienced a damaging hack and everyone panicked and the price blew and then everyone forgot about it. For the next 6 months I kept only a perfunctory eye on it until I noticed in early 2012 it had hit a bottom around 2 and had not died off. That really got my attention. Remember the exchanges are just websites built on top of the algorithm, so a hack to a website is NOT a hack to the underlying cryptography. I think that's where it was underpriced – the difference between people who understood that concept and those that didn't. 2012 was when I started picking some up on the open market and posting on PSW about it. From here forward you'll probably here a lot more about it in the media so I don't really feel the need to educate any longer.
     
    Also, I'm looking into Litecoin (LTC). It's at 0.53 or so. It can be "mined" much more easily, so litecoin direct-mining may be part of the cryptocurrency investment fund.


  42. So that's 2 more /CL at $20 and my average is now $20.75 (counting previous win) on 4 longs.  

    Be careful, that might have been just us buying at the $20 line!

    /CL/Rn – It could go to $10 – there's a glut and the OPEC cuts don't kick in until May and storage systems are overflowing.  The roll will stabilize over time, most likely, usually they are less than $1.  $27 indicates no one thinks sub-$25 will last a month.

    Oil/Kgab – They are not actually connected.  If you have tons of margin, great, but if oil overflows storage this week and next and /CL drops to $15 and you are forced out and then we rocket back into May – you can lose on both ends.  

    And what RN said! 

    DIS/BDC – No one is going to the movies and there's no sports either (ESPN). So?  Are you know expecting the market to be based on some kind of Fundamental Rationale?   To some extent, I think money is moving into long-term safety stocks – that's part of it.

    LABU/Ted – Well it's covered over the course of years of conversations but let's have it again.  You have 5 short Sept $50 calls you sell for $3.50 and they are covered by 20 2022 $30/50 bull call spreads you paid $9,000 for so, at $50, you get $40,000 for a $31,000 profit less whatever you owe the short Sept callers.  That would allow for LABU to be over $110 before you are taking a net loss.  I would call that covered.  Plus you have more than a year to roll the short calls to higher strikes AND you can stop out all or some of the short calls at $50, $55, $60, $70 – anywhere below $110 would be nice…

    /ES stopping just short of 2,850.  

    BitCoin/BDC – You were way ahead of the pack on that one.  We didn't buy it until it was $600 but then we sold at $18,500 (plus the split money) and that's the last time I bothered.  I said at the time I might get back in at $1,000 and we've come close but no hits yet.  

    bitcoin cash chart inr - Heresi.ihi-alliance.org

    The thing is, here we are in exactly the kind of crisis Bitcoiners dreamed about and gold is up and BTC is down.  If BitCoin can win in a global crisis – when is it ever going to win?  

    Phil Submitted on 2012/04/02 at 2:07 pm

    Old idea of mine:  Traders at major banks have apparently become enamored with Bitcoin, a P2P digital currency that's worth $4.88 on online exchanges. One attraction is that thare is an absolute limit of 21M Bitcoins, meaning that new ones can't be "printed." Bitcoins are even gaining acceptance at a growing list of businesses. 

    Biodieselchris Submitted on 2012/07/24 at 2:48 pm

    I just transferred funds to Dwolla to buy Bitcoins (through MtGox).

     

    8.78 is a good price

    Today's post is a good time to mention Bitcoin again. This inflation-fighting decentralized cryptocurrency is forming a nice base between $10.00-11.50 and could breakout soon. I know it's kind of an esoteric vehicle but PSW-ers are sophisticated investors, and anyone out there with a currency portfolio should be adding this position merely as a diversification strategy.

     

    Bitcoin is no longer a fringe hacker project  -- the currency base is becoming more and more widely accepted and the computing power is now the world's largest in history (surpassing SETI recently).

     

    With a $65T global economy and a limit of 21M bitcoins they have a potential maximum value of $3.1M each. Obviously that's not likely, but it is definitely one of those things where having some low-cost exposure is a no brainer, IMO.

    SQQQ/Pat – That's a better plan.  


  43. 18500 + BCH split was a great sell point


  44. I wanted to sell at $20K but there weren't really any buyers and Greg couldn't dump out until the next day but $18,500 turned out to be fine and I think we got $4,500 for the others (for PSW Investments).  


  45. /ES/Phil- Like the short here?


  46. WBA finally getting some love:

    THC too but I'm a little worried as they are putting off the kind of surgeries that make money, in favor of slapping people on respirators and taking up beds.  Not sure how profitable that really is – even if the hospital is full.  Also, they are having a staffing nightmare and potential lawsuits from Doctors and Nurses who get sick because the hospital didn't have adequate PPE.

    Here's their April 2nd presentation.  

    Our spread on them is in the Hemp Boca Portfolio only.  If they can't hold $20, I might pull the plug:

    THC Long Call 2022 21-JAN 10.00 CALL [THC @ $19.85 $1.16] 20 3/19/2020 (647) $14,000 $7.00 $5.00 $7.62     $12.00 $1.10 $10,000 71.4% $24,000
    THC Short Call 2022 21-JAN 25.00 CALL [THC @ $19.85 $1.16] -20 3/24/2020 (647) $-5,000 $2.50 $2.75     $5.25 $-0.52 $-5,500 -110.0% $-10,500
    THC Short Put 2022 21-JAN 18.00 PUT [THC @ $19.85 $1.16] -10 3/23/2020 (647) $-7,670 $7.67 $-1.92     $5.75 - $1,920 25.0% $-5,750

    /ES/Ravi – I'd like 2,850 better so that's the stop line but I don't have a reason to go short other than the rally is overdone and we did just bump up our hedges so there's no imbalance to play off – so not today.  


  47. Speaking of THC, I'm trying to apply the general idea to my THC position: 15 Jan 2022 $13/$20 BCS (not as wide as in your portfolio) with 5 Jan 2022 $15 short puts.

    Do I just take the profit on the whole thing, just the BCS (keep the puts), just sell some sooner calls (e.g., Aug 2020 $25)?


  48. I sold QQQ call's at the bottom when it was at 165 and had 215 calls to ensure the position was a spread and not a naked short call. Well, I've long since covered the disaster short calls but still hold the 215 calls!! Unintended profit! I was so so SO wrong on the position and still came out ahead …


  49. funny stuff

    warning, some language and racial/sexist commentary


  50. THC/Ted – Well we're wide because we rolled down the long calls.  If you are worried, I'd buy back the short puts and leave the spread to take down the risk.  The spread is likely fine (and the puts are probably fine too) – my concern is because it's the biggest position in a $50K portfolio and might not be as safe as I thought it was.  As you can see above, it's net $7,750 on the $30,000 spread that's about $20,000 in the money so it's a lot of gain to walk away from.  They finished over $20 and, as long as they hold that line – I'm fine and once they are over $25, I will stop worrying.

    QQQ/BDC – I love it when that kind of thing works out.  Very helpful when you understand the mechanics of WHY you are losing money and are able to adjust accordingly.  


  51. Phil/QQQ – exactly! I basically (almost unintended) became a QQQ bull by offing the short calls but holding the "too far out there OTM calls to bother with." And then these eventually became the winning position. They were cheap too, 0.32! A great adjustment, in hindsight, only that I now wish I could've been naked long! All a"long" perhaps??

    Selling BCH for 4500 is one of the best crypto timing stories I've ever heard (and I've heard a number). BCH (+ BSV, because you own both now if held) is ~410, down over 90% even 2 years later. Might be a good buy down here however…

    Speaking of coins, right now during this turmoil exists an interesting chance for the US government (if we had the right government) to do an experiment. They could issue a fixed contract of coins, say a fixed amount like on the ETH blockchain if they were too lazy to start their own. Let's say 100 coins for every SSN. So that's what, 3B coins maybe, and then issue 100 to each SSN. The thing is, they have no value. So every stimulus check gets their $1200 or whatever, and also these 100 coins (divisible to 0.0001) plus all the people who don't get stimulated due to income limits can still get the coins. It would be interesting to see what happens to them. Some people would hold, some would try to buy other peoples' coins (speculators) meaning there would be an immediate market. Some people would immediately sell into this market to raise cash. Standard OMO stuff would immediately transpire.

    But also, the government could be a buyer. They could, for example, accept them for IRS tax payments. The gov't could then influence the price by accepting at equal, more or less than the open market price. So the gov't can still exert influence on the coin like the gov't uses the Fed/Treasury to affect economic policy. If you owe the IRS $1000 or 10 coins, and the coins are worth $90 on the open market, the gov't has a way to "force action" on the coin (maintain a price they want); a taxpayer in this case would send over 10 coins worth $900 instead of $1000 in cash. The new Coin FED can hold the coins and sell at a later date when they want to move money out. That kind of thing. THe key here is the relationship between taxpayer's productivity and the gov't that needs to raise money for operations, which now occurs in the absence of debt, which is deprecated financial mechanism that crypto will eventually replace (my operating theory).

    In this way the government has a pulse on this new type of currency mechanism and has less chance of succumbing to what might be a more efficient mechanism of trust than fiat currency in ugly and haphazard ways. As LBJ may have put it: "keep crypto inside the tent pissing out instead of outside pissing in." The US gov't could "lead from the front." There's no risk because if the system never catches on the coins remain worthless and who cares. The whole experiment has 100% upside and no risk. Also, if the hand out has no value then the government has no offsetting debt. Crypto is a currency that creates its own intrinsic value only if said value is actually needed, which is, bar none and without question whatsoever, it's most unique feature.

    Cryptos can get away with fixed, non-inflationary accounting systems (the absolute number of coins) because a) they are debtless, and b) they require no inflationary mechanism to enforce money velocity. The government has to enforce money velocity via inflation. When crypto velocity goes down, the value simply goes down. But a fiat $1 is worth a $1 by executive fiat so that cannot occur. Money velocity is a form of government self-protection; the currency itself does not actually require "velocity" because it is, after all, simply a theoretical construct with no intrinsic value. However, government policy does require money velocity otherwise the debt half of the fiat currency equation takes over.

    Crap I'm over my skis now. Let's call it a "working theory in development"…….


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  55. 1. Beliefs about the nature of God




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  57. I love your idea, BDC!



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  60. RIP FTR

    Frontier Communications Files for Bankruptcy in NY

    The telecom company filed for Chapter 11 bankruptcy after reaching an agreement w/creditors on a restructuring plan. Norwalk, Connecticut-based Frontier listed assets & liabilities of $10 billion to $50 billion each




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