Options Cheer

Discussion in 'Religion and Spirituality' started by ajacobson, Dec 26, 2018.

  1. Henry Schwartz shared a post

    December 24 at 8:02 AM ·
    A little Christmas cheer for the option trading community

    December 23 at 8:52 PM ·
    A Visit from Volatility (with apologies to Clement Clarke Moore)
    'Twas the year vol exploded and all through the street
    Option traders were scrambling on every new tweet
    The market was tanking, implieds through the roof
    Inverse volatility products went poof

    Market makers were smiling, the few that were left
    While those who had shut down were simply depressed
    Exchanges were happy, as volume ran high
    Even hedgers felt jolly as downside was nigh

    When out in the spu pit arose such a clatter
    The fed told the market just what was the matter
    A few minor targets were slightly off track
    But raising the funds rate would put things right back

    The analysts pondered which way would we go
    As credit and tariffs made earnings so-so
    And after the VIX cash had shown so much fear
    The market went higher but cracks did appear

    A pullback predicted, the market then fell
    And kept grinding lower, a new kind of hell
    The buyside was hurting, the prop traders too
    Derivative traders knew just what to do

    Long call spreads! long put spreads! long combos and collars!
    With straddles! and strangles and time-spreads for dollars!
    In leaps or in weeklys, a put or a call
    An option position can offset the fall

    As managers shifted their risk to and fro
    The selloff persisted, how low could we go
    The bull run was over it seemed safe to say
    Would Powell or Buffet or Trump save the day?

    Well here’s where the story begins to get sad
    Concentrated long-only positions are bad
    Trades must be entered with caution and care
    Risk must be managed or losses will flair

    Risk and reward is the name of the game
    Hedging and writing can lessen the pain
    We all have our up years and down sometimes too
    The key to survival is not to get blue

    Those who have traded through thick and through thin
    Know that the markets can change on a whim
    So stick to your game plan, keep risk limits tight
    Happy Holidays to all, may the New Year delight.
    Last edited: Dec 26, 2018
    newwurldmn likes this.