a thoughtful web.
Good ideas and conversation. No ads, no tracking.   Login or Take a Tour!
ahosai's comments
activity:
Sorry, this comment is private.
ahosai  ·  1377 days ago  ·  link  ·    ·  parent  ·  post: 20-Year-Old Robinhood Customer Dies By Suicide After Seeing A $730,000 Negative Balance

If you buy an option your loss is limited to the premium you paid but your profit potential is unlimited. The exact opposite is true if you sell an option - your profit is limited to the premium you collected for the sale but your loss potential is unlimited. Most retail brokerages won’t allow you to sell options unless you are hedged against losses, but they don’t quantify how much you need to be hedged. So any retail investor with an options account could sell an option for say $100 as long as they are hedged by buying a corresponding option, but that hedge could limit losses to $100 or $100,000, the brokerage doesn’t care. My guess is this guy leveraged his margin account and sold a shitload of options but bought the cheapest hedge allowable. When the trade went against him He realized why the hedge was so cheap.

The first rule of selling options is don’t.

If you still want to sell options watch this apology video from James Cordier who spent decades making hundreds of millions of dollars selling options until he blew up over 24 hours on a single trade selling options on Nat Gas.

ahosai  ·  1415 days ago  ·  link  ·    ·  parent  ·  post: New Mexico town near vast reservation shuts everyone out

I worked in Window Rock on the Navajo Nation last summer and stayed in Gallup while I was there. Both the rez and Gallup are possibly the most abject poverty I have ever experienced in the developed world. The horrors of colonialism still affect that part of the country.

ahosai  ·  1415 days ago  ·  link  ·    ·  parent  ·  post: The Fed jumps into the corporate bond market, buying exchange traded funds.

    Republicans are not decrying this socialism, however. How strange.

The right has never had a problem with socialism for large corporations or the super wealthy.

After talking with you I started a twice daily regimen of baicalin extract and sodium ascorbate. I wound up getting sick with mild flu like symptoms for about 5 days - fever, headaches, sore throat, dizziness, but it never made it into my lungs. No idea if I had covid-19 ( I know everyone thinks they've already had it ) but if I did I am fully convinced that the baicalin helped in a speedy recovery.

ahosai  ·  1429 days ago  ·  link  ·    ·  parent  ·  post: ‘A Bargain With the Devil’—Bill Comes Due for Overextended Airbnb Hosts

As someone who travels extensively for work (over 100,000 airline miles last year) I always use hotels. They are consistently cleaner, quicker, easier, cheaper and provide better service than any AirBnB I've used.

ahosai  ·  1431 days ago  ·  link  ·    ·  parent  ·  post: God damn look at this sheep

Black Phillip

ahosai  ·  1436 days ago  ·  link  ·    ·  parent  ·  post: Chinese Agents Spread Messages That Sowed Virus Panic in U.S., Officials Say

Regardless if it's true or not, it will be weaponized in order to control the narrative. Any news that doesn't fit the mainstream narrative can now be labeled "Chinese propaganda" and the source will be denounced as a Chinese agent or a Xi puppet.

ahosai  ·  1436 days ago  ·  link  ·    ·  parent  ·  post: Negative Oil Prices?

Historically crude futures contracts had a lower bound of $0. On April 9th of this year the CME group released the following notice.

https://www.cmegroup.com/content/dam/cmegroup/notices/clearing/2020/04/Chadv20-152.pdf.?mod=article_inline

It states that if any oil futures contract settles below $8 it will immediately be switched to pricing model that supports negative prices. At noon on April 20th the May oil contract dipped below $8 which must have triggered this new pricing structure. It hit zero just two hours later and then quickly sold off to negative 40 in the next 30 min.

According to this notice Gasoline and Diesel also have similar trigger prices that will allow them to have negative pricing.

ahosai  ·  1437 days ago  ·  link  ·    ·  parent  ·  post: Negative Oil Prices?

I just did some digging into this and it appears not to be true. USO rolled all of their May contracts to June contracts between April 7th and 13th. All of the speculators and funds have been out of the May contract for at least 8 days. This selloff was likely driven just by spot traders who were unable to take delivery on a contract that expires tomorrow.

ahosai  ·  1437 days ago  ·  link  ·    ·  parent  ·  post: Negative Oil Prices?

This price action in the front month WTI futures contract was likely due to the USO ETF rolling their position.

|USO owned 25% of the outstanding volume of May WTI oil futures contracts as of last week. With that contract set to expire Tuesday, the buyers of that “paper oil” have to sell or take physical delivery at the end of May. ETFs like USO are not created to take physical delivery of the oil contracts they hold, so in a long squeeze, the fund’s managers have to dump oil.

https://www.forbes.com/sites/jimcollins/2020/04/20/the-us-oil-etf-uso-is-the-culprit-behind-oils-massive-plunge/#8dd8a5624e8c

ahosai  ·  1441 days ago  ·  link  ·    ·  parent  ·  post: Every State's Least Favorite State

I think everyone has a little hatred for California no matter where they live. Kind of like how everyone hates the Patriots.

ahosai  ·  1448 days ago  ·  link  ·    ·  parent  ·  post: Hospitals say feds are seizing masks and other coronavirus supplies without a word

I've been judging how busy the hospital is by the number of medevac helicopters I hear every day. Yesterday it was two, today none.

I did see a very strange procession of ambulances, fire trucks and police cars heading to St. Joe yesterday. There were at least 20 in total, all with flashing lights but no sirens and they didn't seem to be in a rush. As they were passing by a helicopter (non-medevac and non-LE) was hovering about 500' overhead.

ahosai  ·  1450 days ago  ·  link  ·    ·  parent  ·  post: Barrel of Monkeys now worth more than a barrel of Alberta oil
ahosai  ·  1456 days ago  ·  link  ·    ·  parent  ·  post: The Mindfulness Conspiracy

    I have found even eastern Buddhist sects are largely doing the same thing.

Very true. Buddhism and Hinduism were born from caste based cultures that use the concept of reincarnation as a way to control the masses. If you were born into a low caste it was because of some past life karma that you need to work through so you should just accept your place in society. When I was living in Nepal I noticed a large number of locals who had converted to Christianity. Nepalis loved that religion for a couple reasons: 1- there is no caste system, everyone is equal in the eyes of the Lord and 2- no more karmic cycle and reincarnation, all you have to do is accept Jesus Christ as your savior and you go to Heaven. For a low caste Hindu or a Buddhist this is very attractive. So they took Christianity, stripped it of the ugly bits, adapted it to Nepali culture and it has become their new-age feel-good religion - very much like what we've done to Buddhism and Hinduism in the west.

ahosai  ·  1458 days ago  ·  link  ·    ·  parent  ·  post: The Mindfulness Conspiracy

As someone who has been active in the western mindfulness meditation community for the last 20 years, I'd have to agree with everything in this article. I am 100% guilty of using meditation as a way to de-stress and cope with the insanity of modern culture but I no longer have any delusions that I am doing otherwise. I would still recommend that people practice some form of meditation as it can be incredibly beneficial, but be aware that western forms of meditation are largely stripped of their morality and marketed as a way to pacify the masses and maintain the status quo. The message is "Don't try to change the world, just accept it as it is. Instead look inside and change yourself, for that's where all the problems lie." It is much easier to exert power over someone who simply accepts the unhealthy dynamic and internalizes blame.

But seriously, meditation is great - it has truly changed my life for the better. I still maintain a daily practice though I try to distance myself from the neoliberal and new-age culture that has co-opted it in the west.

ahosai  ·  1461 days ago  ·  link  ·    ·  parent  ·  post: I Became a Disciplined Investor Over 40 Years. The Virus Broke Me In 40 Days.

Looks like this guys "investment strategy" was to buy the dip, which is just another form of being implicitly short volatility. This is definitely not investing but a bet on a reversion to the mean of low volatility. "BTFD" and other short vol trades have worked fabulously in the suppressed volatility environment of the last 10 years, but they have the potential to blow up rather spectacularly during large sigma events (the unwinding of the VXX being a great example.)

There's a whole generation of "investors", like this guy, who are just short volatility traders and they don't even know it.

ahosai  ·  1461 days ago  ·  link  ·    ·  parent  ·  post: Bridgewater has just bet a billion and a half on a March recession.

How is Bridgewater positioned with the other 99% of their AUM? That's the real question. If you have 1% index puts but the other 99% of your folder is long stocks - that would be a hedge. If you have 1% index puts, 24% treasuries, 25% gold and 50% cash - that is a bet on a recession.

ahosai  ·  1466 days ago  ·  link  ·    ·  parent  ·  post: Fed to buy corporate bonds, ETF's and mortgage backed securites.

The Fed is also loaning to "Small Businesses" in several sectors who can back the loan with $10-$100 billion in assets. These loans are non-recourse. So businesses with more than $10B in assets can borrow from the Fed with no intention of paying them back. This feels like a direct bailout for Billionaires.

    Non-Recourse: Loans made under the TALF are made without recourse to the borrower, provided the requirements of the TALF are met.

https://www.federalreserve.gov/newsevents/pressreleases/files/monetary20200323b3.pdf

ahosai  ·  1467 days ago  ·  link  ·    ·  parent  ·  post: NY Fed says it will offer $1 trillion in daily repo operations for rest of the month

The fed is also reducing bank reserve requirements to zero on March 26th with no plans to reverse this change anytime in the future. This more or less kills the fractional reserve system and theoretically allows banks to lend without limit.

https://www.federalreserve.gov/monetarypolicy/reservereq.htm

ahosai  ·  1470 days ago  ·  link  ·    ·  parent  ·  post: Monday March 16, 2020: The Day The Movies Died

I welcome the change. I think I have seen maybe 3 movies in the theater in the last 5 years and I enjoyed none of them. My idea of hell is sitting in a dark crowded room with 300 people all talking, eating loudly and texting while I try to watch a movie. These days I just wait for the digital release and watch in the quiet of my own home.

Also, I would argue that the cruise ship industry was the first casualty of the coronavirus.

ahosai  ·  1490 days ago  ·  link  ·    ·  parent  ·  post: Mark Fisher on cancel culture: "Exiting the Vampire Castle"

I remember when this was first published and the shit-storm it created online. Definitely a good read and probably more relevant than ever. This is the last thing I ever posted to Facebook before leaving that platform in 2016.

Also related, EIA released a report yesterday stating that Wind has overtaken Hydro as the most used renewable energy source.

https://www.eia.gov/todayinenergy/detail.php?id=42955

ahosai  ·  1491 days ago  ·  link  ·    ·  parent  ·  post: New Zealand has granted legal personhood status to a river. A mountain is next.

This is exactly the kind of thinking and action we need to embrace in the environmental movement. Animistic beliefs (assigning agency to non-human beings or systems) can help to effect positive environmental change. We would be much less likely to harm or pollute a river if we were able to think of it as a living being - especially if that living being was considered one of their direct ancestors.

I don't think westerners will be able to fully embrace these types of animistic beliefs as it is very counter to our dominant materialistic-scientific mindset (maybe less difficult for people that grew up in AU or NZ and were exposed to Maori or Aboriginal thinking and beliefs at a young age) but I believe it's a good exercise to at least start thinking about natural systems in this way.

ahosai  ·  1491 days ago  ·  link  ·    ·  parent  ·  post: Reddit’s Profane, Greedy Traders Are Shaking Up the Stock Market

    1) When you buy a put, someone sells a call. Nobody has to actually buy any shares. The argument of Bloomberg here is that a bunch of pseudonymous nerds are forcing dealers to buy stock on public markets through options contracts, which if that were the case, wouldn't be called "options." You can let an option expire - that's why they're so cheap.

Dealer hedging is not quite this simple. Market makers will hedge their gamma exposure by doing whatever it takes to be delta neutral. So lets say you buy an ATM call from them with a delta of .5, that gives them a net delta of -50. If they are able to sell a put with a delta of -0.5 they would then be delta neutral, however, if there isn't someone to sell to (they are the ones making the market, after all), they will have to hedge by buying 50 shares of the underlying.

These dealers are constantly trading high volumes of options across many strikes and expiry dates. They have algorithms that will tally up the net delta of everything on their books and buy or sell shares to get them back to neutral both when the price changes and when they buy or sell options.

Since retail investors typically will sell calls to buy puts (insurance) and market makers are usually the ones taking the other side of this trade, these dealers are generally always Long delta, and thus need to Sell shares to hedge. Dealer gamma hedging will typically compress market volatility and keep prices from rising or falling too drastically.

My knowledge on this subject is pretty basic (I've never actually talked to a market maker) This site goes into more detail:

https://spotgamma.com/

Regardless, I agree with you that this article is BS and oversimplifies how market makers manage their books. Unless these reddit guys are absolute whales they wouldn't be able to move a stock like this. It's most likely short covering causing these moves.

ahosai  ·  1491 days ago  ·  link  ·    ·  parent  ·  post: Obama's CDC Director on COVID-19

I'm not sure Russia has done as much damage as our own mainstream media. Fox news has largely ignored the news and people like Rush Limbaugh have said that it's just the common cold and is being weaponized against Trump. The people least prepared for this seem to be the ones drinking the coolaid from that side of the political spectrum.

"Folks, this coronavirus thing, I want to try to put this in perspective for you. It looks like the coronavirus is being weaponized as yet another element to bring down Donald Trump. Now, I want to tell you the truth about the coronavirus. (interruption) You think I’m wrong about this? You think I’m missing it by saying that’s… (interruption) Yeah, I’m dead right on this. The coronavirus is the common cold, folks."

https://www.rushlimbaugh.com/daily/2020/02/24/overhyped-coronavirus-weaponized-against-trump/

I think that this will most likely spread exponentially in the US and the people who will be most affected are the poor, working class (both lack decent health care) and the elderly.

ahosai  ·  1492 days ago  ·  link  ·    ·  parent  ·  post: Obama's CDC Director on COVID-19

The UK seems to have accepted the inevitability of the coming coronavirus pandemic and is encouraging people to prepare, but not to overreact (closing borders, large scale quarantine, food hoarding, etc).

“The expectation must be that the virus will inevitably spread and that any local measures taken to disrupt or reduce the spread are likely to have very limited or partial success at national level.”

https://www.reuters.com/article/china-health-pandemic-kemp/column-learning-to-live-with-coronavirus-in-our-midst-kemp-idUSL5N2AQ4OS

ahosai  ·  1492 days ago  ·  link  ·    ·  parent  ·  post: Obama's CDC Director on COVID-19

That is the most sober and realistic article I have read so far on how to prepare for the inevitable Covid-19 pandemic in the US. Unfortunately I think the government and general public are currently under-reacting and once there are large scale breakouts in the US they will start to over-react.

Sorry, this comment is private.