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Paging IG or any other big money guys
Posted on 7/14/16 at 9:39 am
Posted on 7/14/16 at 9:39 am
Yall think its too late to take a good position in in SLV or GLD? Still have some room to run especially if we have a pull back anytime soon?
1
Posted on 7/14/16 at 9:53 am to b-rab2
I'm not a big money guy. I am bullish on silver though. Long term, due mostly to industrial demand.
If you're buying with a 5-10 year time horizon, go ahead and buy. If you're buying for a short term trade, I suspect we have a pull back ahead, but I have no real prediction of daily or monthly price fluctuations.
If you're buying with a 5-10 year time horizon, go ahead and buy. If you're buying for a short term trade, I suspect we have a pull back ahead, but I have no real prediction of daily or monthly price fluctuations.
Posted on 7/14/16 at 9:56 am to Iowa Golfer
I'm thinking of adding it to my portfolio with a 2-3 year horizon. I know it's still way off of its 5 year highs. I just don't know that much about the silver or gold trade.
Posted on 7/14/16 at 10:09 am to b-rab2
I'm not a gold guy. I own very little gold. I own silver not so much as a hedge, but more so due to supply/demand. There is risk of technological innovation that could render silver's value lower. From what I read, scientists are a long, long time away from this.
If you want a cheap two year paper silver trade with a loss certain, maybe think go buy some January 2018 SLV $8 calls for $11.70. Seems to me that silver anywhere near strike plus premium is realistic, especially since it is trading at that level currently, and you have between today and January 2018 to watch it.
If you want to spend less, and you think silver gets close to $22.00, there are a bunch of 2018 calls out here which seemed priced inefficiently. Buy a higher strike for less money.
I looked quickly, but you could sell 2018 $30 calls, and buy 2018 $20 calls for $173 per contract, which is basically your maximum loss, but also limits your upside to the difference between strikes. If it goes to $40, and you need to sell at $30, you'd be buying at $20.
If you want a cheap two year paper silver trade with a loss certain, maybe think go buy some January 2018 SLV $8 calls for $11.70. Seems to me that silver anywhere near strike plus premium is realistic, especially since it is trading at that level currently, and you have between today and January 2018 to watch it.
If you want to spend less, and you think silver gets close to $22.00, there are a bunch of 2018 calls out here which seemed priced inefficiently. Buy a higher strike for less money.
I looked quickly, but you could sell 2018 $30 calls, and buy 2018 $20 calls for $173 per contract, which is basically your maximum loss, but also limits your upside to the difference between strikes. If it goes to $40, and you need to sell at $30, you'd be buying at $20.
Posted on 7/14/16 at 10:49 am to Iowa Golfer
My initial thought was to use it as a hedge, but I punted. Went ahead and bought the VIX Sept 21 $11 calls for hedging.
Posted on 7/14/16 at 11:28 am to b-rab2
I saw two calls move. Yours probably. Curious, why $11? We get anything close to downward momentum, and you stand to do pretty well on this trade I would think.
Posted on 7/14/16 at 12:51 pm to Iowa Golfer
break even is $17.60 and and the price was right. I didnt want to pay more but I wanted some delta also. those were my two. $1200 insurance.
Posted on 7/14/16 at 4:16 pm to b-rab2
Curious, how much insurance is it buying? What I'm asking, is what methodology do you use to try to figure out relationship between market drop, VIX increase, and subsequent gain used to offset overall market loss.
My best guess is an average portfolio constructed like the S&P is 10 VIX calls for every 10% drop in a $100K portfolio.
I buy to insure 25% of my portfolio for a 25% drop, but I don't use 10 calls for 10%. Because I own some very stable companies, MMM, X, AA as examples, and I'm not worried about these long term. I also am slightly overweight in oil, so I've started to buy oil VIX, which is OVX. But I also buy out of the money to attempt to control the premium expenditure.
My best guess is an average portfolio constructed like the S&P is 10 VIX calls for every 10% drop in a $100K portfolio.
I buy to insure 25% of my portfolio for a 25% drop, but I don't use 10 calls for 10%. Because I own some very stable companies, MMM, X, AA as examples, and I'm not worried about these long term. I also am slightly overweight in oil, so I've started to buy oil VIX, which is OVX. But I also buy out of the money to attempt to control the premium expenditure.
Posted on 7/15/16 at 9:35 am to Iowa Golfer
quote:
What I'm asking, is what methodology do you use to try to figure out relationship between market drop, VIX increase, and subsequent gain used to offset overall market loss.
Never thought about it this way.. I guess I'm just a simpleton. $1250 is what the trade cost which right now keeps me with a little cash on the sidelines. I didnt want to be empty on cash incase I find something I like during this bullish move.
IYO, should a person be buying insurance 6 months out or is 2 months enough? I guess I'll live and learn next time.
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