DOW 23,000+ today?

[Grant 302]

I wouldn’t give up the exposure to potential gains. I’ve already rotated through long term positions to manage taxes. Anything else I would sell is mostly short term for tax purposes. As usual, it’s better for me to hedge.

And there’s news about the steroid treatment.

 

[Fat Boss]

I still have a LOT of exposure to LRCX, both shares owned and shares promised. Of course if there's a significant drop in the market between now and the election I would be very tempted to get back in.

 

[VoodooBoss]

I also have a LOT of exposure to the US market. I use IWV and my wife’s 403B uses an S&P index fund. I locked in some nice profits and will also buy if there’s a major pullback.

 

[Grant 302]

I still have a LOT of exposure to LRCX, both shares owned and shares promised. Of course if there's a significant drop in the market between now and the election I would be very tempted to get back in.

And that’s a great sector to retain the exposure, IMO. I just wouldn’t consider this a time to ‘go to cash’, but totally understand and agree with locking in short term profits in the context of swing trading.

Broadly speaking, tech, healthcare, oil/energy are sectors I want to have exposure to. Travel, hospitality, fitness, restaurants, not so much for the near term, but maybe for the long view (not for me, but for example).

But for today specifically, I don’t see it as a ‘sell’ day. Gonna reserve any judgement on that for price action and tests of this months highs.

 

[TymeSlayer]

I think we've got a ways to go before I'm cutting lose my cash position. Some tymes boring investments are money makers because you don't lose on these wild swings. There's just too much exposure out there right now with COVID, civil unrest and you know there's always another ghost in the shadows waiting to bite us. I dumped all of my HD today which I've held for years to get to a 75/25 cash/stock position.

 

[Grant 302]

Nothing wrong with that. But I’d think a significant bond percentage would be more prudent. Or at least that’s part of my typical ‘go to cash’ procedure.

 

[Fat Boss]

Go go LRCX !! Up another 2.5% this morning.

 

[Fat Boss]

Go go LRCX !! Up another 2.5% this morning.

Aaaaand we're back to even for the day.

 

[Grant 302]

Aaaaand we're back to even for the day.

That’s how it goes. It’s the monthly expiry today. Played some tight straddle/strangle positions bought in the closing minutes yesterday. Win-win for the bulk of them paying on both legs. Calls popped in the morning and many puts recovered by midday.

Essentially funded lots of the monthly protection rolling into next month, some side-action bets for next week, plus a little leftover for Uncle Sam and the till.

 

[Grant 302]

Test of the June lows in progress today. Appears to be holding for now, but still three hours to go.

Rolled short term speculative positions crossed into the money for longer dated OTM positions and cash. Closed all short (covered) call positions. Leaving them open carries unnecessary risk to profits.

 

[Fat Boss]

I'm feeling just fine with my move to stable value funds last week.

 

[Grant 302]

Nice way for June to close yesterday.

Still feeling on the right side of things with a bullish bias for now. Elevated volatility strategies still paying nicely.

Expecting broad consolidation to continue somewhat as there’s a bit of a ‘hole’ in trading volume around the levels visited in June. Support below held so far but doesn’t look particularly strong.

 

[Fat Boss]

LRCX had another nice bump yesterday as well. At some point the analysts are going to start upgrading it.

 

[Grant 302]

LRCX had another nice bump yesterday as well. At some point the analysts are going to start upgrading it.

Broadly speaking, US based tech should benefit even in this economic climate. Earnings go up and the upgrades will roll in.

 

[Fat Boss]

OMG Elon trolling the people that short TSLA stock.

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[VoodooBoss]

And it’s working.

 

[VoodooBoss]

Then there’s this:

 

[Grant 302]

Funny. But big shorts are a big part of why TSLA makes such irrational jumps.

There’s too much premium in their option chains for me to play in that space. And with earnings out in a couple of weeks, I think there’s gonna be some air let out after that.

What most people don’t seem to understand is that any big shorts likely aren’t actually losing money right now. Very simple hedging strategies keep shorts out of trouble, despite what most people think. And while there are cash/margin requirements, the whole process can be cash positive throughout.

For a rough example...
Short 100 shares on Thursday at $1,200. Generates $120k in cash.
Buy 2 OTM calls at $1,240 strike for about $4k.

Today you’d be down on the short about -$12k

But the hedge would be up about $15k.

You could close everything today for a ~$3k profit.

If a put was sold at the short target...even more money would be made.

Just sayin’.

 

[VoodooBoss]

In theory that works well but in the hedge fund world when they were borrowing stock to short at $800 or less there’s some big margins on thousands of shares. Lots of them are getting crushed at the moment.

I did something in mid May I said I’d never do: buy Tesla stock. I don’t have a large position but I’m considering selling today. Ever if earnings beat expectations the fast run up over the past two months has moved the stock to lofty levels. If there’s a pull back I’ll get back in. I bought it as a 10 year play but it’s too tempting not to lock in some profits now.

 

[Grant 302]

It works in practice. And that’s not just opinion.

The trouble comes for those who don’t hedge or roll off or out of protection and go naked. Seems like that’s what happened in late ‘18 and a lot of hedge funds needed to shut down. Survived the first leg down but got blindsided by the second leg through the end of the year. I think lots of that was discussed here at the time.

I wouldn’t sell the shares, but sell a call...OTM , or ITM above your actual purchase price. Easy way to make another $50-$100/share if you do it right. More, if you get lucky. Much more.