Stock Market 2016

[OrthodoxExpatCol]

Hey guys, I'm thinking of taking the plunge and shorting this bitch. It's been a while since I've looked at discount brokers and when I did, it wasn't for margin accounts.

I've got a little over USD 20k just chilling in my checking account and wouldn't mind putting around 10k of that into a margin brokerage account. Can anyone recommend a good online broker for shorting with low commissions? I'm not concerned with fancy charting software or other gimmicks, key thing again is low commissions, no penalties for not trading frequently, and of course reputability.

You'll need 25k in cash to day trade and that needs to be present as a cushion at all times to be able to day trade. So you'll need more than 25k to day trade. You can use options to get around this somewhat, but I have yet to fully get in this. I recommend looking into inverse etfs, but don't you'll need to wait 4 days for the buy/sell to settle which is a pain in the @$$. Wait until there is a sustained down trend before doing this because you can get f*cked like me doing this

^If you want to day trade (enter and exit in the same day) I think you need 25k in your account. I could be wrong about this though. Otherwise go for a broker who has a nice signup bonus in regards to free cash or free trades.

Beast, I think we may get a pullback around the 1925-1930 area before it heads back down to the 1850 area again and then one last rally up to the 2000-2100 area before this thing goes down for good.

Of course the bottom can drop out at any time and I think you're right in that the larger trend is down.

Yeah, i'm going to fully exit my positions with my tail between my legs. Hopefully we'll have something like 2008/9 again which gives us a solid month of negative trends to enter into.

Initially I'd recommend not exciting your positions, unless you have zero cash to play with to wait until the market bottoms out. Seeing as the oil companies (presumably that's what you're in) won't rebound for years to come, it's almost better to close your positions, and trade in something else. The opp. cost of waiting 3/4 years for oil to rebound vs. actively using that money during that spon is high.

Still, this is how people kick themselves. They sell, the market rebounds 10-15% the next day, and they go "what if". So hold your positions for a bit. Today alone, lots of oil companies are up 10%. Oil is volatile, so don't jump on the bandwagon.

 

[The Beast1]

Seeing as how dependent the markets are on the price of oil, I found this Bloomberg article:
http://www.bloomberg.com/news/artic...ll-new-oil-grade-in-march-as-output-increases


It goes on to say that Iran will begin selling their oil in around March or April. I get the impression that will be a good time to start actively shorting markets. I'm going to stay on the sidelines for now and lick my wounds

 

[OrthodoxExpatCol]

Seeing as how dependent the markets are on the price of oil, I found this Bloomberg article:
http://www.bloomberg.com/news/artic...ll-new-oil-grade-in-march-as-output-increases


It goes on to say that Iran will begin selling their oil in around march or april. I get the impression that will be a good time to start actively shorting markets. I'm going to stay on the sidelines for now and lick my wounds

http://www.bloomberg.com/news/artic...he-year-for-citigroup-after-iran-export-surge

I'd also say that many are still skeptical about Iran's capability to produce as much oil as they've said they can right away. It's not as simple as "turning on the hose" and no one knows if they've maintained their oil fields are not.

It's going to be an interesting few months!

 

[thoughtgypsy]

Also, a lot of the frackers are highly levered and simply aren't profitable with oil at these prices. They're overdue for bankruptcies, which will take a lot of capacity off the market. A tailwind for oil.

The market crashing could lower demand for energy further. A headwind on oil. Added Iranian capacity will increase supply of oil. Another headwind.

I think oil and energy will be volatile for months to come

 

[Peregrine]

Beast, a two day rally has you running? Run if something fundamental about your original thesis has changed, but hold strong against short term fluctuations. The way I see it, the rally is simply a response to the speed at which the markets were falling. Nothing goes straight up or down. I didn't close a single short position because I'm not looking at the day to day. I still believe that there is a long way down to go.

 

[Onto]

Also, a lot of the frackers are highly levered and simply aren't profitable with oil at these prices. They're overdue for bankruptcies, which will take a lot of capacity off the market. A tailwind for oil.

The market crashing could lower demand for energy further. A headwind on oil. Added Iranian capacity will increase supply of oil. Another headwind.

I think oil and energy will be volatile for months to come

I think about all the energy companies that might go bankrupt. Then I think of all the loans the banks will have to eat. Then I think about all the people who own stocks and bonds of those bankrupt companies, and then I think about all the CDS's on those instruments and wonder who is on the hook for paying those out?

 

[The Beast1]

Beast, a two day rally has you running? Run if something fundamental about your original thesis has changed, but hold strong against short term fluctuations. The way I see it, the rally is simply a response to the speed at which the markets were falling. Nothing goes straight up or down. I didn't close a single short position because I'm not looking at the day to day. I still believe that there is a long way down to go.

Still learning :angel: i've been an absent long for a bit of time and I normally just do week long stock plays when i'm bored with money i'm comfortable losing. This is one of the few times i'm sitting in all cash and really watching things.

I have an itchy trigger finger clouding my judgement. I need to sit back, watch, and make more intelligent movements. Thought I had emotions under control, sort of stuff :/

 

[OrthodoxExpatCol]

Also, a lot of the frackers are highly levered and simply aren't profitable with oil at these prices. They're overdue for bankruptcies, which will take a lot of capacity off the market. A tailwind for oil.

The market crashing could lower demand for energy further. A headwind on oil. Added Iranian capacity will increase supply of oil. Another headwind.

I think oil and energy will be volatile for months to come

I think about all the energy companies that might go bankrupt. Then I think of all the loans the banks will have to eat. Then I think about all the people who own stocks and bonds of those bankrupt companies, and then I think about all the CDS's on those instruments and wonder who is on the hook for paying those out?

No. You'll likely see a VERY small amount going bankrupt. Bigger companies are looking to buy. If, the small energy companies go bankrupt it's not as if their assets will vanish into thin air - what happens is the assets get sold off for scraps, bondholders get paid and so on.

But again, big companies with huge reserves WANT to buy, but they want valuations to fall even further. You're going to start seeing companies on the brink of default/bankruptcy get scooped up.

So no need to panic.

 

[Invisible]

I've started to short this rally, guess I'm a fucking moron. The shorts I put on in last weeks rally were closed the following day so my portfolio Delta was a little long for my liking, it's nice to get the chance to be short again although I'm saving some bullets in case we keep rallying.

The thing is, and I've mentioned it before, no one knows which way the market is going to go. The talking heads were telling people to buy at all time highs, that's when you should have been short! And then when we're down 10% in a few weeks they're telling people to sell, crazy. One of the keys is to buy into weakness and sell into strength.

This volatility is great, I think we can expect more of it as vol normalises, it's been too low for too long. Nothing worse than a one sided market.

 

[Chengiz88]

When you have spare time Omad, i'd be interested to read more about your trading philosophies and tricks.

Pop up a datasheet on the subject in this section of the site. Welcome to the forum!

I'll put something together when I get a chance. Do data sheets follow any sort of fomat?

I was thinking about starting a trading thread to post the trades I'm doing each day if there's any interest for it? I could tie it in with that. Others could post what they're trading too, it's always good to get different ideas.

Unless you timestamp each trade and can show genuine portfolio its kinda worthless. 90% of trading is about personal psychology. Picking winners/losers is not hard...but cutting losses and letting winners run is.

 

[BB1]

I was thinking about starting a trading thread to post the trades I'm doing each day if there's any interest for it? I could tie it in with that. Others could post what they're trading too, it's always good to get different ideas.

Omad, I would be very interested in seeing you post the trades you are doing.

You said you were doing mechanical investing - here is a Wiki that has some great MI guides and resources :

http://gtr1backtest.anynet.info/twiki/bin/view/MIwiki/TheBook

 

[Sourcecode]

So has anyone looked at the Baltic dry index? It's at an all time low. From 1200 dollars highest 52 week range. Down to 354'

The bdi is the most important index for economic trade.

Apparently there is no ships moving right now.
No trade.

 

[samsamsam]

Was wondering if someone wouldn't mind sharing if they trade or buy QQQ puts. This link has the current pricing (scroll down - it first shows calls, then puts). http://finance.yahoo.com/q/op?s=QQQ+options

I am guessing the price is per share and are sold in blocks of 100s. I was debating buying levered ETFs that bet against the market. But I am wondering if QQQ puts would be cheaper insurance. I have had my securities for a while, so if I sell I have a lot of taxes. I was thinking maybe it wouldn't be bad insurance.

I am having trouble finding puts with longer terms. The data I am finding is all Jan 2016. Anyone know of a better source of data?

I'd get way out of the money puts just to protect against super crazy shit.

Thanks.

 

[Onto]

Hey Sam, I don't know much about options, but have you considered e-mini futures contracts? Not sure if they are better for your situation or not. Here's an article I found from a quick search that compares the two.

Was wondering if someone wouldn't mind sharing if they trade or buy QQQ puts. This link has the current pricing (scroll down - it first shows calls, then puts). http://finance.yahoo.com/q/op?s=QQQ+options

I am guessing the price is per share and are sold in blocks of 100s. I was debating buying levered ETFs that bet against the market. But I am wondering if QQQ puts would be cheaper insurance. I have had my securities for a while, so if I sell I have a lot of taxes. I was thinking maybe it wouldn't be bad insurance.

I am having trouble finding puts with longer terms. The data I am finding is all Jan 2016. Anyone know of a better source of data?

I'd get way out of the money puts just to protect against super crazy shit.

Thanks.

 

[Invisible]

Unless you timestamp each trade and can show genuine portfolio its kinda worthless. 90% of trading is about personal psychology. Picking winners/losers is not hard...but cutting losses and letting winners run is.

Not sure why I would need to time stamp and show genuine portfolio? It's not to prove anything, just show what I'm trading and why.

They would all be option trades, it's more about showing a different way of trading than what most are doing here. Very little psychology involved. I don't use stops, I let my losers run, and take profits early. If I'm trading spreads and it goes against me I take 100% loss at expiry, if I'm trading naked options I continue to reduce cost basis and wait until I'm right.

The basic principle is Implied Volatility is overstated most of the time, selling premium into high IV and profiting from the contraction. And while I do trade directional, a lot of trades are non directional.

 

[Invisible]

Omad, I would be very interested in seeing you post the trades you are doing.

You said you were doing mechanical investing - here is a Wiki that has some great MI guides and resources :

http://gtr1backtest.anynet.info/twiki/bin/view/MIwiki/TheBook

When I say my trading is mechanical I just mean that I have a set of rules that I mechanically follow, so taking profit a X amount, adjusting when X happens etc.

I'll put something together as soon as I get a chance.

 

[Invisible]

Was wondering if someone wouldn't mind sharing if they trade or buy QQQ puts. This link has the current pricing (scroll down - it first shows calls, then puts). http://finance.yahoo.com/q/op?s=QQQ+options

I am guessing the price is per share and are sold in blocks of 100s. I was debating buying levered ETFs that bet against the market. But I am wondering if QQQ puts would be cheaper insurance. I have had my securities for a while, so if I sell I have a lot of taxes. I was thinking maybe it wouldn't be bad insurance.

I am having trouble finding puts with longer terms. The data I am finding is all Jan 2016. Anyone know of a better source of data?

I'd get way out of the money puts just to protect against super crazy shit.

Thanks.

You're correct, 1 option contract controls 100 shares of QQQ, if the price of the option is $1.00 it will cost you $100.00.

At the moment you can trade 2016 - Feb, Mar, Apr, May, Jun, Sep, Dec. 2017 Jan and 2018 Jan.

It's a low probability trade, if you look at the March 85 put in QQQ, it closed at 0.45 on Friday, it has a 5% probability of being in the money at expiry. Volatility is high at the moment so options are expensive!

 

[samsamsam]

Omad,

Do you have a link to a site that shows pricing for the next 24 months and various strike prices?

When I looked I kept getting Jan 2016 stuff.

Thanks.

 

[Invisible]

@samsamsam - No sorry, I get prices through my trading platform. Any price you get now are just the last trade price, when the market is open option prices are continually changing.

If you want a specific date and strike let me know and I can give you Fridays close.

 

[ball dont lie]

So has anyone looked at the Baltic dry index? It's at an all time low. From 1200 dollars highest 52 week range. Down to 354'

The bdi is the most important index for economic trade.

Apparently there is no ships moving right now.
No trade.

Trade out of Asia is through the floor. Not only are China and S.Korea hit for not sending exports, they produce and maintain all those ships which are sitting around. If the MSM was honest at all there would real news about how bad it is. Spring Festival is coming next week, look for February to fall through the floor for East Asia.