by cischiral
Here is a graph of market up v.s. down days (shamelessly stolen from www.wolfstreet.com). Notably BOTH the upward movements and the downward movements have been trending larger over time since the start of the crash. Obviously this trend is unsustainable and it will stop at some point, but at the moment it looks full steam ahead into next week.
As a confirmation of this real possibility look at the highest strikes for the VIX options that expire March 18th. The VIX in all of history has never gone above 60 [EDIT: Before last week], but there is very real open option interest for next week (and so far next week only) for the VIX reaching as high as 130, i.e. more than 2x as bad as any financial crisis that has ever existed during the history of the VIX. Obviously these are probably hedges as opposed to bets, but if you look at the numbers involved for open interest:
- 27,838 at strike 90
- 20,166 at strike 100
- 5,234 at strike 130
These are not “on a lark” hedges done because “well it was cheap so I bought a few options.” These are large numbers given how extreme the strikes are implying numerous significant market players believe that there is enough of a real possibility that next week will be history making crazy that they want to put down some non-trivial money on buying insurance against it.
“That’s great retard but I can’t read and wouldn’t if I could. Just give me the strike and expiry.”
Up and down next week harder and faster then your wife’s boyfreind pounds the both of you. Buy puts at the end of up days. Buy calls near the end of any day where futures + cash market triggered at least one “down” circuit breaker between the two of them (preferably more than one to be safe, but one will probably suffice).
“Calls and puts on what, and what strike?”
It looks like it might not even matter on what ticker or what strike, anything that is not nailed down and is affordable (and isn’t an inverse ETF you retard). Timing on entry and exit of your positions will mater more then what garbage you bought (and its all garbage right now), and timing will be getting down to almost twitch reflexes pitting you against the HFTs while any sane individuals will just check out of the market completely and wait for the dust to settle.
Disclaimer: This information is only for educational purposes. Do not make any investment decisions based on the information in this article. Do you own due diligence.