re: Pair trades everyone should be making right now

With respect to XLF, courtesy of Alex Eppstein:

"In today's trading, puts outstrip calls 147,000 contracts to 50,000. Digging deeper, the most active strike is the near-the-money May 19 put, where more than 21,200 contracts have crossed. From the looks of it, one trader bought to open a block of 16,500 contracts for $1.07 apiece, resulting in a total net debit of almost $1.8 million (premium paid * number of contracts * 100 shares per contract). This initial layout represents the speculator's maximum potential loss, should XLF close north of $19 at May expiration."

spx has tested 1804 three times now.

nice rally around the corner imo

thought spx might hit the 200 week ma @ 1789 area currently

might have one more push down but looks doubtful atm

Probably be in March.

I do SLV, USO and UNG. I haven't been real active in natural gas and oil recently. SLV I mostly own ITM LEAPS. Deep ITM, out until 2018. I see they have 2026 LEAPS as well, but very little OI. Looks like protective puts to me.

LINK

Because Buffett hates options. Except for that in this shareholder letter he details buying them. And several other places. Not as clear is his bet on silver, his loss of shareholder monies, and the sudden turnaround in his thoughts on precious metals.

I own BRK.A. I read what he writes. I guess some other guys on here own BRK as well. I suspect they don't read his stuff as closely as I do. Or they own a different BRK. Who knows? It's the internet, and I tend to believe people who never have losing trades and worship the Fed. Because believing everything has allowed me to get from point A to point B.

Edit - He sells naked. Both calls and puts, but largely naked puts to lower entry pries on positions. Actually a pretty conservative way to enter into a long equity position. Collect income waiting for the strike to hit, and then own the stock.

Zero Hedge causes me to do more research as they have a bias in my opinion. I had heard this today as well, but don't completely understand the negative margin comment, and it's context in the sentence. I'm assuming oil negative margins, not gasoline. I read the Reuters article several times, and I'm still confused.

Edit - There is a demand side to the equation as well. So first we have revised world gdp, rumored or true for Q4, then we have the Fed's comments, not exactly rosy was my take, and other commodities outside of energy. Lower demand. I was playing around with aluminum and copper demand earlier today, and it just isn't looking good to me. Anecdotal only. Some economist probably has a more educated take on it. But you can see from my current trades posted, I'm mostly short, and it's mostly been working. It's much more fun in a market like this for me, but it's a ton more work as I don't keep shorts open too long, nor do I hesitate to close option trades quickly after a modest gain.

Looks like we have broken the trend

Looks like we have broken our falling knife trend in oil. The futures have the April contract up to $33.65 right now with it looking like a base at $29 has been put in. Volume has been heavy the last couple of days which tells me the bulls are ready to get this show moving up the road. Looks like there is resistance at $34 but I think we break that and move up to $38 over the next week or so.

I'm in USO as of $9.30 so I need to see some moves.

Didn't make the trade. Would have been a very good trade today. Imagine that. If I make a trade, do the opposite. If I talk about a trade and don't make it, absolutely go ahead and make the trade.

How is this long-short equity trades working out for you guys? Care to share your returns so far? Anyone ready to start a long-short Hedge Fund?