/finance/ - Speculator Degeneracy

Speculator Degeneracy - Lolibear edition Assayer 26/09/2022, 18:07:49 No.183

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AKA Stock trading for the crippling gambling addict.
>wat
Short-term securities speculation is how those fags on WSB multiply their wealth tenfold in a matter of days and destroy it all in a matter of minutes.
Instead of putting money little by little in long term investments with strong fundamentals and slow but reliable upwards growth, you and I here are going to blow money on highly leveraged trades guaranteed to explode in your face when you're not looking
>will this make me rich
No, you'll probably lose all your money.
>how
The main tool of the retail trading speculator is taking advantage of leverage through option contracts to make the most out of exploiting inefficiencies in the market. Small changes in an underlying stock can result in huge swings in the value of an options contract. You can read more about option contract here:
<  https://www.fidelity.com/learning-center/investment-products/options/options-learning-path
Or just watch Benjamin on YT, he's a WSBfag shitposter but he knows what he's talking about.

With the Fed's rising interest rates, the pound dropping like a sack of bricks in Brit market, rising energy prices in Europe, etc. the S&P having several red days in a row, etc. the markets look even more bearish than they did back in 2020. Which of course came before one of the greatest bull runs the market has ever seen, though one could argue that was caused by government manipulation that led to the current recession.
Should I wait for an ever bigger dip to buy OTM calls on bluechip companies? Buy poor man's covered puts? Maybe it'd be a good time to be selling cash secured puts instead, given the spikes in implied volatility,  but you'd need to do so on companies with a strong outlook in the face of reccesion.

Assayer 26/09/2022, 21:10:48 No.184

I remember one of the Hayate movies had the idiot character involved in a highly leverage trade that lost her millions. I think she paid off the debt with an equally leveraged trade. Anyways, every dip is an opportunity for success and failure at the same time.

Assayer 30/09/2022, 01:20:39 No.189

I'm thinking of buying out-of-the-money calls on VIXY, please talk me out of it, anon.
>is trading at only $17 despite market uncertainty
>historically has reached highs as far as $160 during similar bear markets (e.g. 2018)
>big number makes my penis feel big
There's also UVXY, which is a 1.5x leveraged version of VIXY, going for only $13.
Something about this feels stupid, IV is already at levels higher than they were during that 2018 crash, surely this can't work, and I hope some smart 'non can tell me why. **I'm still going to do it anyways.

Assayer 30/09/2022, 04:09:36 No.190

>fucked up spoiler
Looking closer at .VIX and VIXY I'm even more confused. The .VIX was at 19.85 in early 2018, back when VIXY spiked to $160, but the .VIX is at 31.75, and VIXY is still trading low, even relative to other periods of high .VIX this same year. I'd wager it probably has to do with VIXY trading futures on .VIX rather than the .VIX directly, but why isn't have no idea why or what I'm doing.
Still, if understanding is right, these calls are dramatically underpriced, I'm looking at an [$18 10/28 Call] on UVXY that only needs a (by historical standards) small spike to start printing money, and it's only going for $75. I'm probably misunderstanding or ignoring something obvious that'll bite my ass later, but fuck, man, it beats buying scratch tickets.
Maybe predicting the timing of the catalyst for a .VIX spike is the biggest factor keeping prices on these options low? Again I'm hoping someone smarter than me on options is here and can call me out as a retard.

Replies: >>198

Assayer 30/09/2022, 07:41:26 No.191

Christ I shouldn't write long posts at midnight, I wrote that like a ESL retard.

Assayer 01/10/2022, 12:42:50 No.198

>>190
I'm not knowledgable at all about this but its interesting to read about. Good luck.

/finance/ - Finance

Nobody on here is a financial advisor

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