The silliest bet in history - long S&P puts?

Discussion in 'Trading' started by wilburbear, Jul 10, 2012.

  1. Even if world economic growth slows to zero, (or even goes negative), the S&P would want to lose 20% or 30%, but the Fed would pump money into the system sending the S&P higher.

    The Dow would probably go to 25,000. Jim Rogers (for what that's worth), said the Dow could go to 100,000 - but it would all be worthless currency.

    Why aren't S&P puts the worst bet in history?
  2. If you are willing to wait for 50 years, it probably makes sense to bet on the long side. Over the shorter time period (such as 1 week, 1 month, or even 1 year), the likelihood of going down is about the same as it's of going up. Look up the S&P chart of the last 12 years. We are about the same as we were back then.
  3. Try shorting S&P puts month after month and see how long it takes to blow out your account.

    Traders don't have enough capital to survive the big drops and IV explosions.
  4. Going up or down over daily/weekly/monthly time frames is not a 50/50 deal.

    Looking at the S&P chart of the last 12 years shows clear trends up and down.

    The down move in 2008 was much faster than any up move. And since the bottom in March 2009 moves down have been limited in time and price.

    There is another big down move lurking out there somewhere in the future. Too bad that I don't know when.

  5. Maybe sell the out of the money puts. The market may go down, but it will be supported at all costs.
  6. Until a black swan comes and you blow up
  7. Because Central Banks have been fighting deflation for 5 years...
    And Central Bankers are not idiots like random internet posters...
    Or Perm-Bear Scammers trying to sell you gold, silver, Apocalypse, etc.

    If the USA turns inflationary...
    There will be plenty of time to buy calls.
  8. He also said that buying options was a quick way to the poor house.......
  9. No, they're idiots of a completely different stripe.

  10. We had the black swan in the Lehman crisis. World banks needed trillions and trillions of dollars.

    The powers that be will do *whatever is necessary*. They will not let the market go down, and stay down.
    #10     Jul 11, 2012