-------------------------------------------------------------------------------- Quote from riskarb: Buying back month vegas require paying a premium on duration vol. Add to that the fact that you're paying-up into a fed meeting. I can't imagine it feels good right now. Sure, we can hit your strikes, but it's a 6-sigma proposition. -------------------------------------------------------------------------------- For the translation just break it down... You're buying back month volatility, and paying a premium that the volatility will hold over the long time span. Doing this into a fed meeting where vols will mostly likely drop after and doing it on an option that is six sigmas out of the money (has a 0.00000019732% chance of occuring)
i personally am short...but a bit nervous. i have been easing into a short position over the last week...and i am in the red..but my stops have not been hit. the markets seem to be undecisive (which for a bear like myself is good) but we keep getting whacky gap up, gap down opens. it may not be a bad time to enter a short..but look at the double bottom (w formation) on the indices, and be aware that the market could rally back short term. long term..short is the safe place to be i think.
I am short too, I see what you see too, BUT, the W only shows in Dow and S&P, not in Nasdaq, so I don't see how it's going to rally without all 3 indice confirming each others.
he was told multiple times what a silly bet he was goin' to make. hope the guy been smart enough not to trow more than 5% of his acct in that ugly trade.
I think if they pause you're gonna see a 100-200 point gain in the following few days. I think the market is accounting for a rate hike.
<b>This is an old thread, discussing the August Fed meeting.</b> One fellow was enthusiastically describing a trade he was heavily piling his cash into. I warned him about the trade, letting him know that his account was "on a collision course with disaster". Several other traders then agreed with my warning. In the months since that exchange, the hapless trader who ignored my warning has been vigorously pounded like a rented gerbil, his position absolutely devastated. The thread was only re-animated now as an "I told you so" gesture. Cassandra strikes yet again!