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Started By
Message
Lot of shorts at 2600 level
Posted on 4/6/20 at 9:34 am
Posted on 4/6/20 at 9:34 am
They are sweating big right now. If it breaks 2650 they will be scrambling to cover. This will provide rocket fuel for the next leg up of this rally.
7
Posted on 4/6/20 at 9:39 am to Lgrnwd
Where do you go to keep track on things like this?
Posted on 4/6/20 at 9:52 am to Lgrnwd
Who is “they”?
Posted on 4/6/20 at 9:52 am to Drew Orleans
Not sure where you that... But the VIX-cbo will help in the same manner.. The symbol is VIX.
Posted on 4/6/20 at 10:03 am to Lgrnwd
Thanks StockTwits
Posted on 4/6/20 at 10:10 am to JetsCoach
Vix is steadily going up. At 45.60 now. The rest of the day and tomorrow will be interesting.
Posted on 4/6/20 at 10:27 am to Lsutiger2424
So what does this mean exactly if VIX increases?
Posted on 4/6/20 at 10:30 am to sonoma8
increased volatility
Posted on 4/6/20 at 10:49 am to Lgrnwd
There is certainly an abnormally higher than usual volume at that strike. I see resistance in the 263-265 area. If we go thru that I agree shorts are in trouble. Could propel things to 280 over the next day or so.
Posted on 4/6/20 at 10:52 am to sonoma8
More puts being bought on SPX
Posted on 4/6/20 at 11:12 am to BuzzSaw 12
Yes it will get to 2800 quickly. Looks like bottom is about to fall out from under the VIX pretty soon IMO.
S&P at 2800+ and a Vix starting point below 35 would be an ideal spot to go back down and retest the bottom.
Still don’t think I will try and short though. Very risky with the FED and government doing everything they can to prop up the market.
But I could be wrong. It has happened before
S&P at 2800+ and a Vix starting point below 35 would be an ideal spot to go back down and retest the bottom.
Still don’t think I will try and short though. Very risky with the FED and government doing everything they can to prop up the market.
But I could be wrong. It has happened before
This post was edited on 4/6/20 at 11:16 am
Posted on 4/6/20 at 11:17 am to Lgrnwd
Can you explain this in a bit more detail? I do not trade as I just graduated and need to build up some cash savings before I can; however, I am following the markets closely to build up my knowledge so that I can when my finances allow for it.
As I *think* I understand it, everyone who bought shorts was expecting the market to stay below 2600 and thus would profit. As the market breaches 2600, those individuals lose money for each additional amount it goes up. Eventually, those speculators will have to close their position or put up additional collateral to continue their short. For those closing, they buy the market, effectively neutralizing the position. All of those buys then drive the market up as there is greater demand. Correct?
As an interesting side note, one of my finance professors actually created the VIX (Bob Whaley) and he had a margin call occur during class last spring when he shorted the VIX.
As I *think* I understand it, everyone who bought shorts was expecting the market to stay below 2600 and thus would profit. As the market breaches 2600, those individuals lose money for each additional amount it goes up. Eventually, those speculators will have to close their position or put up additional collateral to continue their short. For those closing, they buy the market, effectively neutralizing the position. All of those buys then drive the market up as there is greater demand. Correct?
As an interesting side note, one of my finance professors actually created the VIX (Bob Whaley) and he had a margin call occur during class last spring when he shorted the VIX.
This post was edited on 4/6/20 at 11:18 am
Posted on 4/6/20 at 11:21 am to Lgrnwd
Ya I'm not shorting at the 280 level. I've made some good money trading in and out of this mess and don't want to screw that up by trying to short this market with the FED intervening. I'm more content letting it go back down and retest the bottom so I can load up some more near the lows and if we don't retest the lows so be it. I've got some good long term positions I'm content with keeping from the more recent lows.
It will be interesting to watch the last hour today if we continue to creep towards 265. Could make for some wild swings.
It will be interesting to watch the last hour today if we continue to creep towards 265. Could make for some wild swings.
Posted on 4/6/20 at 11:22 am to blackoutdore
You pretty much have it. To cover their shorts they have to BUY. Thus driving price up even further. It’s called a short covering rally. It basically feeds on itself.
If you are looking for something more technical with big words you have the wrong person haha
If you are looking for something more technical with big words you have the wrong person haha
Posted on 4/6/20 at 11:42 am to Lgrnwd
Trader's term is a short squeeze.
Posted on 4/6/20 at 11:43 am to Lgrnwd
For the first time in two months I feel optimistic again about my stocks.
Posted on 4/6/20 at 12:25 pm to TulaneLSU
Friend,
Be cautiously optimistic.
Yours,
BigPerm
Be cautiously optimistic.
Yours,
BigPerm
Posted on 4/6/20 at 1:17 pm to BigPerm30
Friend,
Thank you for your guarded encouragement. I bought 400 shares of LUV today at 30.5. Let’s hope for the best! I am considering leaving the house today to take a walk.
Yours,
TulaneLSU
Thank you for your guarded encouragement. I bought 400 shares of LUV today at 30.5. Let’s hope for the best! I am considering leaving the house today to take a walk.
Yours,
TulaneLSU
Posted on 4/6/20 at 2:08 pm to Lgrnwd
Here's another anomaly on the SPY. Next weeks 120 put has a volume of 22,033 right now. The 130 put has over 10k open interest and over 4k volume today. It would take a pretty big drop and soon for those puts to gain enough value to make a trade like that worth while. Someone or many someone's are betting on a big collapse. Even a 60 point drop in SPY by Thursday would only make those puts worth approximately .06-.10 depending on what the volatility was. Weird.
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