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Monday Market Mania – Oil Drops to $12, Trump Fans Protest Local Government

South Florida caravan protesters demand Florida 're-opens' - South ...This actually happened this weekend:

My town was invaded by a parade of protestors.  They had no permits, of course, you aren't even supposed to be out on the street without a face mask but apparently, waving a Trump 2020 banner in Florida is a "get out of jail free" card and men, women and their innocent children risked their lives, and the lives of others to demand that Florida be re-opened.  

Many of the people in the caravans had “Trump” quotes and flags on their cars. There were also some people wearing clothes or bearing signs supportive of the fringe conspiracy theory group, “Q-Anon,” and far-right group the Proud Boys.  You know, the usual right wing-nuts, egged on by the President, who tweeted out "LIBERATE VIRGINIA" and other states – as if they were oppressive regimes to be overthrown.  Apparently, someone had told Trump that "Liberate Virginia" meant "Free Vagina" in French and he laughed about it all weekend – and no one in the White House dared to correct the President.

Trump tweets 'LIBERATE MICHIGAN,' echoing Lansing protesters ...

Despite Trump's 59 lies about the Coronavirus Pandemic in just the last 30 days, only 15 states (that's out of 50 – in case you are a Fox News viewer) have contained the spread of the virus (green) while 35 states (again, math done as a courtesy to Fox viewers) still have the virus spreading led by North Dakota, where each infected person is infecting 1.7 other people leading to a 170% spread of the virus every two weeks.  

“We’ve avoided the cataclysmic outcomes we’ve seen in other countries and other locations,” North Dakota Gov. Doug Burgum boasted in a press conference last week, noting that hospitalizations in the state are only in the teens and deaths remain in single digits.

Sounds like Trump when we "only" had 15 cases in the US.  Now North Dakota has 585 cases and 10 deaths while the US as a whole now has 759,786 cases (31.4% of the entire World's cases) and 40,565 deaths (24.4% of the World's total).  Not bad for 4% of the World's population, right Mr. Trump?  

Still, America can do greater and we WILL do greater under the leadership of President Trump, who is inciting protests to re-open the states MUCH earlier than any actual scientists or other World Leaders or the WHO (Boo!) are recommending despite the fact that, last Monday, we had 557,663 cases in the US so that's 36.2% more cases in a week vs Spain who had 169,496 (18.1% more this week), Italy who had 156,363 (14.5% more this week), France who had 133,672 (15.3% more this week) or Germany who had 127,854 (17.9% more this week)…  

You get the idea, some countries have the virus under control and some do not.  The US clearly does not so removing the restrictions this early in the came is almost certain to lead us to disaster – perhaps one the country will not be able to recover from yet we are simply sitting back and letting Donald Trump literally gamble with all of our lives?  

You know Donald Trump is a gambler, he's gambled and lost and bankrupted companies he's run 5 times and now he's putting the entire United States on the line and spinning the wheel as if it doesn't matter if he loses once again.  It's kind of scary.  

So far, in the US, for 36% of the people who have had an outcome from being infected with the virus, the outcome has been death.  Only 15% of the people who have been infected in the US have had outcomes so far (recovered or dead) so 85% of the cases (again, math for Fox viewers) are still active.  We don't really know how many people are infected as we've only tested 3,861,596 people so far and that's just over 1% of the population.

Without testing and without PLENTIFUL supplies of PPE (personal protective equipment), NO ONE should be running around potentially infecting other people – that is simply MADNESS.  Yes, it is bad for the economy to be closed for 3 months while the virus runs its course and the state have time to gather supplies and roll out mass testing programs to make sure we track down every infected person to protect the rest of us BUT that takes time.

Not doing that, as I said last Monday (before the President joined team virus), the US is now past 1/500 infected and, at the current rate, 0.5% (1/250) will be infected by the first week of May and, by the end of May, 1/100 Americans will be infected and if we don't have their spread ratio down well below 1 by then – in two weeks more it would be 1/50 and, by the end of June, 1/25 would be infected – 82.5M Americans.  THAT is the cost of ignoring the science and opening up too soon!   

Are you willing to bet your country on it?  

If not, tell that to your Congressmen – especially your GOP Senators and Governors.  



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  1. Nasdaq trading like everybody will be back buying iPhones and spending money like nothing happened!

  2. Interesting discussions I listened to the other day where a top chef mentioned that restaurants owners are predicting that even if they open for business now, it will be at least 6 months until they get back to where they were before the pandemics! And that's if we don't have a second surge! He said that 4 out 5 small restaurants are at risks of not re-opening if this goes on another couple of months. And how could it not – we still don't have enough tests and Trump has simply passed the buck there – telling governors that they are in charge, but not offering money or supplies. And if they don't open for business soon, he'll unleash his goons on the rest of us. Unfortunately for them, a MAGA hat does not get you on any priority list for a ventilator! 

  3. Good Morning.

  4. Reasons why nothing gets done – too few are in control of too many!

    The most obvious example of minority tyranny is what Madison accurately recognized as the “evil” of the United States Senate. In 1787 there was a 17-1 ratio between the then-largest state (in population), Virginia (assuming one counted slaves), and the smallest, Delaware. Today, California, approaching 40 million residents, has the same voting power in the Senate as does Wyoming, with less than 600,000 people. Vermont, with about 650,000, balances Texas with its approximately 28 million. As a matter of fact, more than half the American population now live in 9 states, represented by a total of 18 senators. By definition, this means that the remaining number, a minority, live in 41 states that receive 82 of the 100 senators. Demographers are predicting that by 2040, a full 70 percent of the population will live in fifteen states. This means, of course, that the remaining thirty percent will enjoy 70 percent of the votes in the Senate. There is no defense for this imbalance. 

  5. Good Morning

  6. Phil the TOS futures trader tab shows /CL at 21.73 as I type, but oil had a huge drop way below that price.  Wrong month on display or what am I missing?

  7. tangled -  type "/CLK20" into your futures tab. 

    i was having the same problem!

  8. With all the hoop and hoo, This virus will continue infecting people, not obeying the roles of 6 feet distance. If the restaurants want to kill people by opening, not by the food they sell but through infection, let them go ahead. All fools will feel the pain. This will only go away the day they have found the antidote for the virus. Just simply get this in all your heads!!!!
    And the yellow clown is one of the biggest asses running around. I hope he will be one of the first enyoying a meal at the restaurant.

  9. Senate – The US is not, and never was, meant to be a democracy. It's a republic. The senate is there for a very good reason and it's make-up serves a legitimate purpose. Every state in the union has equal membership rights in the federation of states. That concept is embodied in the senate. And each person has the same membership rights, and that concept is embodied in the House of Representatives. Checks and balances. Remember that the founding fathers had a healthy distrust of government, and they also had a healthy distrust of mob rule. If conservatives were concentrated in a handful of states, you'd be singing the praises of the founding fathers' foresight right now instead of wanting to abolish the senate. This I can guarantee you, if the senate gets abolished or the equality of the states is otherwise destroyed, that will be the end of the United States. It will surely split. And while that may sound good to you right now, in the long run it will be a total disaster. The government is set up the way it is to prevent any one group of people from turning the ship too far off course, and ever since the court gutted the 10th Amendment, the only thing that keeps the government in check at all is the fact that it's set up intentionally for each branch, and the two Houses of the legislative branch, to all be at odds with each other and frustrate everyone's ambitions. 

  10. Term Limits for all….

  11. Dawg-Yes checks and balances that was the plan. BUT with the Supine Court undoing the checks and balances not to mention Barr, the protections are slowly being eroded. Look what they pulled in Wisconsin. If that is not a sample of the unfettered erosion of protections, what is? The Supine court appointed GW. He was not elected! The far right will do ANYTHING to keep power including usurping our whole constitution.

  12. Happy April 20 Everyone.


    Term Limits for the courts as well….

  13. Phil – looking at the SQQQ hedge you suggested last week for a SEP BCS against a 20% drop…

    If the NAS did by 20% by then would not a lot of the gain be eaten up by months of SQQQ decay?


    Yet, there are differing opinions.  I am not sure anyone has the perfect answer, but waiting for a magic pill isn't going to mitigate the deaths and destruction due to keeping our economy closed for months.  The answer lies somewhere between the extreme solutions and learning how to live with the calculated risk of the virus.  Clearly some are more affected than others, but many of us aren't.  Many may have already had the disease without knowledge.  Hiding in a hole forever isn't the answer.

    As for the comments about the destruction of our Constitution, by the frustration of many here, it seems to be working quite well.  Many of you are frustrated.  Yet, are not alone whatever the politics you hold.  No one has a lock on that!

  15. Somewhere – It's called Testing. Test all, Test often…..

  16. Oh, we don't have tests?….nevermind… :(

  17. Phil- Any knowledge or thoughts about Tom Sosnoff,s statement this morning in his "Sosnoff Says" Monday Cherry Bomb article?  

    "TD bought us so thinkorswim is gone and now TD is about to be gone."

    Is he just referring to Schwab's purchase of TD Ameritrade and possible name changes, or is there trouble brewing for our accounts?

  18. Phil/DIS

    I have 5 july 115 Puts naked long. These have been part of a put spread and has been beneficial till now. What do you suggest at this point. Cash this and go into another bear put spread to ride the price down or just sell the short side to add money to account.


  19. /CLK20 – now at $10. all the fake contracts are getting flushed out – June oil is $22.84. If you had a place to store it, you could make over 100% profit taking May oil and delivering it in June. Wish I'd been short May oil, should have known it was going to collapse heading into the settlement date.

  20. Clark-Yes many are frustrated, However, if it looked like there was some resolution to the problem just maybe we would see the light at the end of the tunnel. Instead it is SOS over and over with no movement forward to a positive outcome. Now what I read it is 10-12 feet of distance between people. Where did this come from? The testing in China of those who were in the hospital. Apparently the virus can float in the air and be carried out into hallways by the medical personnel and on shoes! It was on surfaces where there were no covid patients and the rooms where patients are have reverse ventilating to suck the air into a purifying system of filters. As we learn more it helps to make everything clearer if not more manageable.

  21. Good morning!

    Big Chart – S&P flirting with the 50 dma still but failing so far.  As StJ notes, Nas off in LaLa Land, having a good old time as if nothing happened.  

    Good point on the Senate, StJ.

    Oil/Tangled – As noted, the front month is now /CLM20 (June) and /CLK20 (May) is expiring tomorrow so anyone stuck with a contract must take physical delivery of oil so people are dumping /CLK20 at any price as there's nowhere to store the oil.  That's dragging /CLM20 lower so I doubled down at $22 (4 long at $23.50 now), hoping for a bounce to get 1/2 out even (still down $5K from last month). 

    Split/Dawg – At this point, I'm all for that.  The blue states are sick and tired of supporting the red states and living under their rule.  We can exercise our right to end it and then the red states can all get together and ignore all the science they want, build walls, whatever…  BLUXIT TIME!

    Alaska: the most socialist state of the USA - Elections - Page 2 ...

    North Dakota is totally dependent on support from other states and is telling us to fuck off on virus protocols – I say cut them loose!

    People want to be originalists in the Constitution – we originally had 13 states – who says we always have to add states?  Russia sold us Alaska, France sold us the South – I think it's time we hold a yard sale! 

    SQQQ/Tangled – It doesn't decay that much.  

    The hedge pays you if the market goes down and stays down.  If it bounces, you'd better have a solid plan to make money on the longs and, if you can't figure that out – best to stay in CASH!!! until the market calms down (not every captain should take out their boat in rough seas).  

    Magic Pills/DC – You don't need pills, you need masks and tests!  Masks and tests and all this BS about how the quarantine is the problem is simply intended to cover up the truth – that the lack of preparedness and the continued failure to get the necessary supplies to combat the virus is the problem that's keeping us under quarantine.   

    A very simple solution is, if you want to go to a public place or inside a building, you leave your house and go to a test center and get a badge that shows you were cleared that day and then you can go about your business with other people who have been cleared.  If you are not cleared – you are sent home to self-quarantine and assigned a medical person who will work with you and continue to test and treat (if necessary) you throughout your quarantine.  There – all finished.  

    But you NEED the testing and the personnel in place BEFORE you start putting people at risk but this Governments TOTAL FAILURE to make progress towards a medical solution is obvious, so Trump is attempting to change the narrative to pit the people against their own State Governments and make the issue about "freedom" rather than about their failure to create the conditions that allow us to get back to work safely.  

    Sadly, many people seem to fall for the propaganda and allow themselves to be confused by this circus Team Trump is running for the masses. 

    Image tagged in death at the circus - Imgflip

    TOS/Rvn – I have no idea.  Maybe Schwab is phasing TOS out or maybe they are just dumping Sosnoff and he's bitter and angry.  It would be a shame if they killed TOS, not a good time to have to learn a new platform.

    DIS/Pat – I'm not sure what the question is?  You have long July puts so you want DIS to go lower.  They just laid off 100,000 people so I doubt they are opening in May and probably not June and earnings are May 5th so you either believe they are going lower (now $102.75) or you don't.  July $115 puts are $16.50 and the June $105 ($9.10)/$95 ($5.20) bear put spread is $3.90 so, if you think DIS will drop $7 to $95, you can make $7 by risking $16.50 with the naked puts our you can take $8.70 off the table and buy two of the spreads that would have a $12.20 upside at $95.  Or put $12.60 in your pocket and you still make $6.10 at $95 with a lot less risk so worth giving up the 0.90 of potential profit to lock in the $12.60, I think.

    /CLK20/Dawg – How great would it be if you actually had a place to store oil for a year or two at $10.75?  I'd take 2Mb for $21.5M.  Land storage costs about $1/month/barrel so that hurts, unfortunately.  Ships are no better at $200,000/day ($6M/month) but maybe less if they aren't going anywhere.   Trump is letting oil companies lease space in the SPR.  

  22. Pharm suggested the other day to buy calls of BA. I am looking at selling May 8 200 call for now 2.15. Looks good if you hold some short 250 puts. As I will eat my hat if they get to 200. Just to compensate a bit for the loss on the leap putters.

  23. Yard sale – Too bad there's not much worth buying…. 

  24. Phil

    Yes, that's a nice solution towards reopening our economy.  I like it.  What I don't like are the ideas that we should just hide and wait for a magic bullet to arrive.  There is a whole lot of politics about what everyone is thinking.  It all is part of the ugly sausage making to get us to the right solution.  That's what moves the "slow ship" known as our Government.  

    Get the facts, calculate the risks, develop a plan and let's move forward. I trust our process to ultimately drive the right solution.  It won't be perfect and will probably evolve over time.  Regardless, we need to move forward, and as a business owner, I appreciate the drive to do so.  

  25. The Bug – As I may have mentioned here (he said somewhat grumpily) no outbreak that I've ever been involved with or am aware of was stopped by a treatment or a vaccine. Prevented, yes – but stopped, no. It's all about infrastructure and logistics, that's the game with public health.

  26. Clark-I'm as well as many others are business owners and would like things to move forward BUT at the risk of people's lives? No! Our county has 5? confirmed cases and no deaths. Why? Because there are NO tests. You only get tests if you are admitted to a hospital. Does that make sense? Not to me. Doctors only want to give video appointments. Does that give you a clue?

  27. pirate

    I guess it depends on what facts you listen to and incorporate in your decision making process.  I don't know, but the passage below from the article I posted earlier is pretty compelling to me.  I find it hard to believe if the issues you presented were omnipresent that the data from Korea would be possible.  Perhaps in the hospital setting those issues are true.  Regardless, if we can agree on a broad set of facts, we should be able to move forward with a plan that works.  This is who we are.  We don't sit and wait for someone else to solve our problems.  We digest facts, come up with a plan, and move forward.  I think this is the message we so-called "right-wingers" espouse to.  We can solve this in a responsible way.

    “The data from South Korea, where tracking the coronavirus has been by far the best to date, indicate that as much as 99 percent of active cases in the general population are “mild” and do not require specific medical treatment. The small percentage of cases that do require such services are highly concentrated among those age 60 and older, and further so the older people are. Other things being equal, those over age 70 appear at three times the mortality risk as those age 60 to 69, and those over age 80 at nearly twice the mortality risk of those age 70 to 79.


    These conclusions are corroborated by the data from Wuhan, China, which show a higher death rate, but an almost identical distribution. The higher death rate in China may be real, but is perhaps a result of less widespread testing. South Korea promptly, and uniquely, started testing the apparently healthy population at large, finding the mild and asymptomatic cases of Covid-19 other countries are overlooking. The experience of the Diamond Princess cruise ship, which houses a contained, older population, proves the point. The death rate among that insular and uniformly exposed population is roughly 1 percent.”

  28. RV Nelson

    There maybe some changes in the platform or trading rules, but I would think that they like Think or Swim analytics. For account safety there is SIPC. 

    SIPC coverage provides …

    Up to $500,000 in total coverage per customer for lost or missing assets of cash and/or securities from a customer’s accounts held at the institution.

    Up to $250,000 of that total can be applied to protect cash within a customer’s account that is not yet invested in securities.

    Protection in case of unauthorized trading or theft from an account.

  29. pirate

    Just to be sure you understand.  I am not advocating "just opening" and throwing caution to the wind.  That would never work and is a bad plan.  What I am saying is we need to push forward to develop a solution to open date certain.  Whether that's a month or 3 months down the road we have to identify and move forward.  Waiting for the "perfect plan" isn't a solution.  There won't be a perfect plan.  That's the point.  Life is not without risks, but we still participate.  Don't we?  What's the difference between deaths from the virus and deaths from economic peril.  I want a plan that mitigates both.

  30. Phil/DIS

    Thanks. I cashed the 115 Puts and took the july 105/95 Put spread for $3.88. I think I will put some in a long term BCS as DIS will eventually be full speed once this is over.


  31. Phil / Premiums

    on LABU (@$40); 

    2022 $10 calls are trading for $32 ish suggesting only a couple of dollars of premium

    2022 $30 calls are trading around $20 – what the hell is going on?!

  32. Phil, LABU PT2

    i suppose a follow up to that is – you can buy a 2022 $10/$30 BCS for $11? 

    $10 in the money already? what am i missing?

  33. I have started to sell some weekly calls against some of the spreads I have, the premiums are large and the rolls if necessary are easy. Anyone else doing the same?

  34. Virus cuts through Mexican factories snubbing shutdown

  35. Who’s Responsible for America’s Coronavirus Fiasco? – FPIF

  36. BA/Yodi – Not likely by May but 6,000 x $1,000,000,000 is a lot of money being thrown around and that's just the US stimulus and now another $500Bn (500 x $1,000,000,000) is being added by Congress this morning – It's very dangerous to make bearish bets.  

    Forward/DC – Yes but when you are fighting a fire and you KNOW that water is the right solution – generally you try to think of ways to get water to fight the fire.  You don't say "Well, getting water is hard and takes time, so let's go back in the burning building and things will probably work out because we have a "Can Do" attitude – 'Merica!"  See, that just doesn't sound reasonable does it?

    Of course, statistically, we all left the burning building and only 0.5% of us got burned so that means 99.5% of us must be immune to burning or that the burning was so slight that you wouldn't have even known you got burned if the Liberal Media hadn't pointed it out so let's all man up and get back into that fire!!!  

    Stop being rational, Snow.  'Merica!  

    ROFL DC!  "It depends what facts you listen to"???  WOW!!! Is that really how far off the rails of reality things have gotten these days?  You do realize the article you show has a picture from Feb 26th of something we STILL aren't doing in America on April 20th, right?

    daegu south korea coronavirus

    It also says RIGHT IN THE ARTICLE:

    A major factor in that lower death rate could be the country's extremely thorough coronavirus-testing policies: Many milder cases included in South Korea's overall count might not be noticed in countries like the US, where testing is more sparse.

    covid 19 death rate by age south korea 3 11 20

    The higher death rates among older patients reinforce the frightening trend of COVID-19 being more dangerous for older patients that was seen in a similar report from the Chinese Center for Disease Control and Prevention.

    SoKo did a fantastic job of getting on top of things and locking down the country and TESTING THE CRAP OUT OF PEOPLE and were especially good at getting the word out and protecting older people from getting infected so the virus skewed towards younger people and caused those statistics (because a very low rate of older people were infected at all).  We have done NONE of those things so far. 

    The first confirmed case of the pandemic of coronavirus disease 2019 (COVID-19) in South Korea was announced on 20 January 2020.[1] The number of confirmed cases increased on 19 February by 20, and on 20 February by 58[2] or 70,[3] giving a total of 346 confirmed cases on 21 February 2020, according to the Centers for Disease Control and Prevention Korea (KCDC), with the sudden jump mostly attributed to "Patient 31" who participated in a gathering at a Shincheonji Church of Jesus the Temple of the Tabernacle of the Testimony church in Daegu.[3][4]

    Amidst the fears of further contamination, mass gatherings in the affected cities were cancelled and a few hundred soldiers in Daegu are in isolation.[5][6] On 4 February 2020, in order to help prevent the spread of COVID-19, South Korea began denying entry to foreigners traveling from Hubei Province.[7][8]

    South Korea introduced what was considered one of the largest and best-organised epidemic control programs in the world, along with Taiwan,[11] Vietnam,[12] and Singapore.[13] Different measures have been taken to screen the mass population for the virus, and isolate any infected people as well as trace and quarantine those who contacted them, without further lockdown.[14][15] The rapid and extensive tests taken by South Korea have been judged successful in limiting the spread of the outbreak despite not using the drastic measure of quarantining entire cities.[14][16][17]

    Yes, SoKo did a great job of containing the virus but now we're back to the model where you say "South Korea (who put out the fire with lots of water) contained the fire and there was little damage to other buildings and that means we can ignore the fire and go back in the building as well as the other buildings because the statistics are on our side."  Sure, you are completely ignoring the REASON the fire was contained but, hey, you chose some really convenient facts to believe, right?  

    I see below you are not advocating total risk but there have to be absolutes in place before we advocate risk-taking – like having water to put on the fire.  THEN you can discuss how much water and where should we put it and what do we consider contained but, at the moment, we have an out of control fire with no water and, rather than addressing the urgent need for water – we're debating when it's safe to enter the building again.  It's a dangerous, irresponsible, BS distraction from the real problem and it's wasting more and more time every day while the problem spreads and entrenches itself.  

    DIS/Pat – That eventually is going to be a while.  It's looking likely that Summer is blown at this point.  

    LABU/Potter – It's really a matter of what people are willing to pay.  This is why we like to BE THE HOUSE and sell risk premium to idiots.  $12 for a $20 spread that's in the money is pretty good but it was out of the money last month.

    In the money calls usually lose most of their premium, which is why we buy them and also that's why we sell calls that are out of the money or at the money – depending on our target.  You've stumbled onto the entire concept of our bull call spread buying!

    LABU Short Call 2022 21-JAN 35.00 CALL [LABU @ $40.52 $5.15] -20 3/12/2020 (641) $-17,000 $8.50 $10.00 $-5.25     $18.50 $4.35 $-20,000 -117.6% $-37,000
    LABU Short Put 2022 21-JAN 15.00 PUT [LABU @ $40.52 $5.15] -20 3/13/2020 (641) $-15,000 $7.50 $-2.85     $4.65 - $5,700 38.0% $-9,300
    LABU Long Call 2022 21-JAN 10.00 CALL [LABU @ $40.52 $5.15] 20 3/23/2020 (641) $19,000 $9.50 $22.25     $31.75 $5.75 $44,500 234.2% $63,500

    That's our LTP play, the $35 calls are still ridiculous but we don't care – we only care that we're in the money and our current net is $17,200 on the $50,000 spread so there's still $32,800 (190%) of upside potential if LABU holds $35 so I guess we're going to hold onto it and it's good for a new trade, though we started with a net $13,000 credit so we're already up $30,200 (232%) in our first month.  

    Selling calls/Moto – I approve.  We removed a lot of risk from the LTP, even though it's only even for the year.  I don't want another repeat of a 50% drop if we turn lower and I am seriously considering getting back to cash if the news flow doesn't improve.

    My issue with selling calls is the stimulus can drive things higher and you might regret the calls so I'm generally going by:  If I like the stocks enough to keep, then I shouldn't be selling calls and, if I am too worried about the stocks to stay long – I should just cash them out.

    In the LTP review we just did Friday, we ditched the following:

    • ADP - I don't know when jobs will return and we have a nice gain so let's kill it.  
    • BA - Take the money and run.  
    • CAT - Up 50% in a month with two years left to go – kill it! 
    • SIX - Their summer is going to be shot and it's a small loss so let's kill it.
    • AMZN – I don't know why the puts are here instead of above.  Do we want to wait 2 years to collect 1/3 or move on?  I say take the money (and remove the risk) so we have room to sell on the next dip as I'd almost rather be short than long at $2,400 ($1.2Tn).  
    • DFS – I am not enthusiastic about the stock as I think consumers will be suffering for a long time but we got such a great price let's just buy back the short puts to reduce the risk and leave the $45,000 spread at net $21,300 (less the $1,060 profit) to hopefully give us a double.  If DFS goes lower, THEN we can sell puts again and roll (if we don't think the disaster will be long-lasting).  
    • TD – I'm nervous about them as the oil is killing Canada so let's kill this spread.  Options are too short-term to afford a mistake and we have a nice profit to lock in.
    • TOL – Also not worth the risk in this environment and we have a nice profit, so kill it
    • XOM – This is a tough one.  I think the puts are low enough and the spread was net $0 (ish) so it's a free $22,500 spread that's $18,000 in the money but it's net $25,280 already due to crazy option pricing so we're taking the bull call spread money and running!  The short puts we can leave as they'll pay us another $11,925 if XOM stays over $27.50.   

    So we killed 9 out of 45 positions (20%) AND we added $100,000 of protection in the STP to what's left because I REALLY do not trust this market.

  37. Wow, $10 broke on oil and it plunged right below $9.  They will pay you to take it by the end of the day at this rate!

  38. Why are the June oil futures so much higher?  It is not like there can be a substantial improvement between now and then unless they just stop pumping completely.

  39. Phil good reply to DC. Seems he still has not understood the sincerity of an enemy you cannot see.
    Looks more like the clown’s view to me.
    Fire and water great example.

  40. A little humble self-promotion – if you want to read good journalism on The Bug in Asia, especially but not exclusively Korea, look up Andrew Salmon, especially his articles in the Asia Times. He consulted with three professionals – a physician, a genetic/statistician, and an epidemiologist (ahem) – in preparing his reporting. He's a good guy, a good friend, and a good reporter.

  41. Oh, and he lives in Korea, speaks the language and is married into a Korean family.

  42. Yeah, I'm curious about oil too. Front month /CL just hit $4.04 for a second, while all the other months are over $22. I don't think I've ever seen a spread like that.

  43. I have a /ES target of /ES 2797, path of least resis…..and upside of /ES2861, hard one to sell considering whats going on in oil.


  44. /CLK20 testing $1 now!  You literally can't give it away on the floor of the NYMEX…  /CLM20 at $22 again, more realistic.

    NYMEX closes at 2:35 – we could go negative!  

    June/Tangled – Yes, likely to hit the storage issues again when that contract expires.  This is just nuts. 

    Salmon/Snow – Here's links to his articles.

    You can SEE how different SoKo's response was to the US.  IMMEDIATELY people were on the streets disinfecting and IMMEDIATELY they were testing and tracking cases – THOSE ARE FACTS!!! (for the Fox viewers).  

    Back in the USA it was:

    • Jan 30th – "We think we have it very well under control. We have very little problem in this country at this moment — five. And those people are all recuperating successfully. But we’re working very closely with China and other countries, and we think it’s going to have a very good ending for it. So that I can assure you.” 
    • Feb 24th – "The Coronavirus is very much under control in the USA. … Stock market starting to look very good to me."
    • Feb 26th - “And again, when you have 15 people, and the 15 within a couple of days is going to be down to close to zero, that's a pretty good job we've done."
    • Feb 28th - “It’s going to disappear. One day, it’s like a miracle, it will disappear.”
    • March 2nd - "We had a great meeting today with a lot of the great companies and they're going to have vaccines, I think relatively soon.”
    • March 6th - “Anybody that needs a test, gets a test. They’re there. They have the tests. And the tests are beautiful.”
    • March 9th - “So last year 37,000 Americans died from the common Flu. It averages between 27,000 and 70,000 per year. Nothing is shut down, life & the economy go on.

    ES/Customs – You're not seeing a big market reaction as what's happening in oil is a technical issue, not an economic one.  Yes, too little demand, too much supply but the real issue is that we've run out of storage so it's not possible for NYMEX traders to take barrels for delivery in may so they are now having (on the last day of trading) a forced liquidation of their contracts.  

    This has, of course, never happened before so who knows what will happen next.  /NG, on the other hand, is up 6%.

    /RB is a fun play down here

  45. CL June $22 Put is $4… might not be a bad idea if the craziness of today reoccurs in a month!

  46. Phil// Couple of questions on Crude drop

    (a)  Won't this crude price drop cause margin calls and make the market drop further?

    (b)  is this a good time to buy long term crude contracts?


  47. The oil market is trying to self regulate unlike equities which are directly supported by CBs. The markets are distorted making price discovery quite painful. Should help transports in the long run.

  48. Phil – what would be a good new spread position or adjustments for WPM and GOLD? I think long term they will both do well especially after the crisis is over and people get more rational

    WPM Current: +10x Jan 2022 $25 Call – 5x Jan 2022 $35 Call, +10x Jan 2021 $30 Call.

    Considering 2022 Jan 30/40 BCS and then perhaps selling some Jun $35

    GOLD Current: +10x Jan 2021 $15 Call – 5x Jan 2021 $20 Call

    Considering 2021 or 2022 $20/25 or $20/30 BCS?

    Thanks as always

  49. Does anyone have a dime for a barrel of oil?

    We should buy 1,000 just to take the picture!   Does someone has a REALLY big pickup who wants to take a road trip to Cushing?  

    Crude/Rookie – Does the whole market have margin plays on oil?  That's the first I heard of it.  No, it's just some idiots who held onto their contracts to the bitter end (never do that) and now they are totally screwed.  I thought the price for /CLM20 would tighten up but I gave up when it was $20/25 and did the roll and I'm still getting killed at $22 on /CLM20 – but it sure beats 0.10!  

    And no, I wouldn't touch oil right now unless you have $100,000 to burn – this is clearly a broken, dysfunctional commodity market and there's no way to predict what will happen.  

    As Kustomz notes, the Fed is not supporting oil and this is what Equities could look like without the Fed stepping in. 

    Again – we are super-hedged or I wouldn't have any equities.  It would not shock me at all to wake up and see the LTP (and other long portfolios) wiped out and just have the STP money left.  

    WPM/Mito – I would not play either of them because you are chasing.  You missed the trade – look for something else.  We went into WPM at $20, now it's $35.  We picked GOLD at $16, now it's $25 – they are both up about 75% and I'm inclined to SELL – not buy.   Something will go on sale – maybe these will go on sale but, right now, they are NOT on sale – so don't buy them! 

  50. WOW. $-11 per barrel. 

  51. Think of the amount of time and effort that went into producing and transporting that barrel of oil you can now PAY US $1.43 to take.  

    That's right – we can agree to take 100,000 barrels of oil from Cushing, OK around May 20th and they will PAY US $143,000 to take them!  

    John Belushi Lets GIF by swerk - Find & Share on GIPHY

  52. It is your patriotic duty if you have a pool to use it for oil storage.  Also everyone top off their gas tank,

  53. So you have to take deliver of oil, but have no place to put it.  What happens?

  54. I'm papertrading oil contracts for fun, don't have the balls to do it for real right now. 

  55. /Cl/Phil – It's -35.2 now. They are willing to pay you 35 dollars per barrel.

  56. Tangle, the oil purchased is already stored somewhere, you will have to pay for storage.

  57. -$37.63 at settlement.  They'll pay us $37.6M to pick up 1M barrels.  Seems like there must be a business opportunity there somewhere….

    No place to put it/Tangled – Your contract is to accept delivery at Cushing (terminal) by around the 20th of May.  If you don't, they will charge you to store it at the prevailing rates until you do accept delivery.  It is not something you want to F around with if you have no experience.  

    That's the craziest thing I've ever seen! 

  58. Ravi  

    How do you trade that??

  59. question answered with Phil thanks, AMAZING

  60. Now I'm seeing -$42.27 OMG, this is so crazy!  -231% on the day.  

    People who have DUG must be pissed!  

  61. There's a lesson for you kids – a single oil contract lost $62,000 since Friday's close! 

    The most money I ever lost in a day was having I think 4 long oils into a 3-day weekend and I got on a plane for Texas at 11am on Thursday and by the time I landed in the afternoon, I had lost $50,000 as oil dropped $12.50!

  62. I think the fact that there are no floor traders also contributed to this disaster – everyone is trading electronically from home.  

  63. Phil/oil

    i know nothing about oil

    so, why can't I buy 1000 barrels for May delivery for MINUS $35, turn around and sell it from Cushing for June delivery for $21? That's $56 and what is cost to store it for a month? Maybe I am totally naive, but just asking hypothetically to learn the logistics behind this madness

  64. Phil/oil

    Tanker costs- wonder what they are for 1000  barrels? That kinda answers my question above, at least partly

  65. The system is locked, no way to accept oil because no way to sell gasoline, oil ducts are full, pumping stations off and there are no space in shops or storage tanks, is a total lock!.

  66. Thank you Phil and others. I haven't stayed in my long May and short June Oil contract… I sold it on that day with $40 loss.

  67. Maya, your going to pay an extreme premium to store, Im guessing its a losing proposition by todays action.

  68. But iI think Phil is a nuclear reaction because a lot of contracts, funds, and loans will be automatically called  so the problem can be aggravated because many companies could fail or BK, leaving more contracts unfilled, there will be just a few winners

    Something as happened with REITs funds a month ago

  69. Question For anyone —- I am looking at the LABU calls and I am seeing no call above 40 until June.  I'm on Etrade – anyone seeing higher calls  in the month of May?

  70. I see  up to $90

  71. Oil/Maya – In theory you can and believe me, I was thinking hard about it but storage around there is full so you are gambling that you can find something.  Your broker won't even let you take physical delivery because it's really their contract, not yours.  You have to trade on the NYMEX (and be registered) to do that.  Even if you were, a barrel of oil is about 2 feet diameter and 3 feet high so 6 cubic feet so 1,000 is 6,000 cubic feet of space and a truck is about 300 cubic feet so 20 trucks worth of 2,000 pound barrels you have to pick up at Cushing and move to somewhere you found storage and then you have to find someone willing to take it from you.

    Still, once you get over $5 per barrel – there's lots of ways to make it work and -$40 per barrel would seem to eliminate most of the risk because we can offer it for -$20 right away to people who want physical but, of course, that is only going to be refiners because you have a barrel of unrefined sludge of no value to anyone other than a refiner.  

    I know you can't get movers for less than $1,000 per truckload so that's $20/barrel right there and POOF!, your profits are gone.  The way it works for commercial players is they load the oil right onto tanker cars on trains or boats and have it transported to wherever for $1-2 per barrel but no way to do that on short notice – so people just dump out of their contracts.  

    $40/Kgab – Much better than $40,000!  

    Kgabor115 Submitted on 2020/04/14 at 2:38 pm

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

    Phil Submitted on 2020/04/14 at 3:34 pm

    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

    LABU/Batman – Stops at $40 in May, $90 in June. 

  72. Cinemark Holdings (CNK): I sold some puts (options only go out to Dec 2020) 7.5 @ $2.15, which I'd be happy to own (or roll).

    As a movie theatre chain, they've done well and seem to have the balance sheet ( (they recently sold $250mn bonds) to get through to when theatres can start opening and selling tickets (supposedly July 1, but I'm dubious). They have a dividend (currently > 10% yield), which I see them dropping (next isn't due until July), but just in case, I covered 200 shs with Dec 2020 12.5c @ $5.50 (net $8).

  73. So he did a ban when there were no deaths and now there are 40,000 deaths – so the ban was completely ineffective is the point Trump is trying to make?  Hard to keep track…

    CNK/Ted – Same problem with IMAX – they don't go far enough out to cover the time it may take them to recover.  Still a good long-term stock though.

  74. Phil / LABU – Calls stop at 40 in may go to 90 in June….. That's the same thing I am seeing is there a reason for this?

  75. LABU/Batman – There was no demand for over $40 – no one thought it would get there.  

  76. I remember in 2016 Stjean was talking about the possibility of  Cushing filling up.  This time it looks worse.

    Unfortunately, CAKE couldn't hold on to its gains.

  77. So does the speculative player start shorting June oil contracts now?

  78. How do you cover a negative priced futures contract?  If it is at -30 can I close with a -29 buy?

  79. Or do you just let it expire and you get your original strike?

  80. Unfortunately, in the real World, companies are pushing back any chance of re-opening into June.  Lack of testing makes it impossible to restart the economy and still no effort to address the issue – all the WH statements are "we have testing" – testing not even 100,000 per day = 3M per month = 1% of population and, as noted in article above – we need 20M tests/day to re-open so MILES away from ready.

    And what John Oliver said!

    Oil/Tangled – I would think the lesson is stay the F away from oil contracts!  

    IBM beat!  THAT is what I like to speculate on….

    IBM Short Call 2022 21-JAN 140.00 CALL [IBM @ $120.93 $0.81] -8 11/14/2019 (641) $-9,200 $11.50 $-3.00 $-5.50     $8.50 $0.30 $2,400 26.1% $-6,800
    IBM Short Put 2022 21-JAN 135.00 PUT [IBM @ $120.93 $0.81] -4 11/14/2019 (641) $-8,460 $21.15 $10.63     $31.78 - $-4,250 -50.2% $-12,710
    IBM Long Call 2022 21-JAN 110.00 CALL [IBM @ $120.93 $0.81] 8 3/12/2020 (641) $9,600 $12.00 $9.75     $21.75 $-0.05 $7,800 81.3% $17,400

    Pays $24,000 off our net $8,060 credit entry and, even this afternoon, was only at net $2,110 credit.  

    THAT is how you speculate – on things that have a very high probability of working….

    How/Tangled – You don't.  Hopefully your broker won't even let you play it before you blow up your account.  

  81. IBM – Beat on EPS 1.84 ( 4Cents) a missed on Rev 17.6 vs 17.9  CE?

  82. Just curiosity. I have no intention of playing in that realm.

  83. IBM/Batman – Probably currency fluctuations.  Dollar super-strong much of the Q.

    Any profit is a good profit these days. 

    Oil/Tangled – You can't cover, you have to be a certified NYMEX trader with verified assets etc to justify your positions.  If you trade through a broker, they are assuming the risk and they will force you to liquidate, which is probably what most brokers are doing today though the contract still has tomorrow to trade at the NYMEX.  A lot of accounts got destroyed today – no one was allowing for losing $60 on a $20 contract!  

  84. Turn those machines back on!" :-) - YouTube

  85. This is for you Tangled, next time you feel like hitting that button:

  86. I'm surprised it took this long to see negative oil with all of those outstanding fake contracts (well, real contracts, but fake amount of real oil behind them).

    More proof the Knowledge Economy is overtaking the Manufacturing Economy. Expect to see more of this as we value information over physical things more and more so. (and note the increasing failure of a single nation-state fiat currency being used for global transactions….)

    Had fun with LABU May calls. Got out today when LABU was ~39.75. Naked short DIS.

  87. /CL – if you were short today, and say you sold at $20, and you covered at minus $30 then you'd have made a damn killing on a 50 dollar swing, same as if it went from $55 to $5.

    June expiration is going to be totally awash in short oil contracts so I imagine the downward spiral will start a lot earlier as the sellers crowd in and make up out of thin air, and then sell, an immense number of phony contracts for oil. That might be interesting. Because all of those phony contracts have to get re-purchased before expiration since 99.999% have no oil to deliver. I think the only thing one can say for certain is that the margin on a /CLM20 contract is going to become astronomical as we get close to expiration. 

  88. IBM beat and the price is dropping AH. But, in a sign of how ridiculous things are, AMD with a PE of about 200 is up on the day and up even more AH. Just can't keep a good momo stock down. It's just a little more than $2 below it's 52-week high. Totally insane.

  89. Cushing / Stockbern – These were the days when they used to talk about running out of space… 4 years too early as it turned out. 

    But even if the June contract is a $20, that still not enough money to save the shale industry here or the tar sands in Canada. That's going to hurt. And it's hurting other people – Putin is not having too much fun now either. But I don't see lots of factors to drive oil prices up in the next couple of months. We are still some months away from being 100% out and back to normal consumption!

  90. How many banks start going under once oil companies start defaulting on their loans?

  91. Hello All, good morning!!

    re: MIDD.

    We can buy back the short calls for nothing. Is it time to DD and adjust that spread?

    I have a 1/4 position…

    2 x 100 Calls

    -2 x 120 Calls

    -2 x 100 Puts


    Any suggestions on an adjustment? Thanks in advance for your reply

  92. Correction -2 x 110 puts

  93. The S&P 500 In The Upside Down

  94. Trump criticism aside, governors call for more federal help

  95. AP: Publicly traded firms get $300M in small-business loans

  96. /CL/Phil- Did you DD?