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The Big Short Thread


sancho panza

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2 hours ago, MrXxx said:

So I assume the entry price is that at which the shares are selling at when you place your short(£246)?...if so, does this mean that as soon as the share price goes above this your contact (and hence £246) is lost?...and where people in the markets are manipulating them in the short term forming the basis of a bear trap to `cheat` you of your money as a shorter?

No. $246 was  $2.46 x 100 (minimum purchase) and just an example of a strike price at the time. Not only do you have to factor in the share price but also time decay. So the options value is always fluctuating, not only with the share price but time till expiry. The one positive with dealing with put options is you know what your maximum loss/win is. Probably easier to look at this website and watch this video:

http://www.optionsprofitcalculator.com/calculator/long-put.html

Put in a ticker symbol, eg TSLA and then click select option, then choose a strike price. Click calculate and it will give you examples of when you will be ITM or OTM.

 

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Thanks AP, I was talking about `pure` shorting, and didn't even know this alternative existed!...the video helped greatly; I am a visual learner, and now I have extended my financial learning even further...that's what I love about this forum! :-)

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10 hours ago, MrXxx said:

Thanks AP, I was talking about `pure` shorting, and didn't even know this alternative existed!...the video helped greatly; I am a visual learner, and now I have extended my financial learning even further...that's what I love about this forum! :-)

You're welcome. The channel is great for options. I'm learning options strategies at the moment myself and have signed up to tasty works, just haven't placed any trades yet, although will be in due course. This is a US-centric style rather than the UK from what I understand. You can use margin if you like but I only have a cash account and depending on the trade type (eg selling/buying calls/puts) you could essentially have considerable losses if your balance/margin allows. Check out Reddit wall street bets sub if you want to see what the degens can win/lose with crazy options trading ahem betting.

There are strategies to stop that from happening. But a straight-up buying of a put option you know what your theoretical loss and potential upside will be when you take the trade. I had a look and couldn't really find providers in the UK that offered this kind of trade on US or UK stock. If someone knows of a provider/broker and can correct that would be good as would rather deal with a UK broker

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11 hours ago, Admiral Pepe said:

I had a look and couldn't really find providers in the UK that offered this kind of trade on US or UK stock. If someone knows of a provider/broker and can correct that would be good as would rather deal with a UK broker

Interactive Brokers

https://www.interactivebrokers.co.uk/en/home.php

It's actually a US firm but operates globally, and you're covered by all the UK regulations. The platform has a fairly steep learning curve, and they do require you to have some experience and a decent amount of capital too. ( all self declared )  I'd recommend people to start out with TastyWorks.com, a US firm, first, with just $5000 and no experience, until they gain some experience. TastyTrade.com provides all the education someone might need. The only downside is the need to keep your own records in a spreadsheet ( or index cards as I used to do ) since they don't have sterling based accounts or reports.

A couple of months immersion into that, and then consider moving to Interactive Brokers for it's much better reporting in the currency of your choice, UK FSA protection, and the ability to trade just about every instrument on any exchange around the world.  ( though for options, it's best to stick to US stocks and futures since they're the most liquid ).

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11 hours ago, MvR said:

Interactive Brokers

https://www.interactivebrokers.co.uk/en/home.php

It's actually a US firm but operates globally, and you're covered by all the UK regulations. The platform has a fairly steep learning curve, and they do require you to have some experience and a decent amount of capital too. ( all self declared )  I'd recommend people to start out with TastyWorks.com, a US firm, first, with just $5000 and no experience, until they gain some experience. TastyTrade.com provides all the education someone might need. The only downside is the need to keep your own records in a spreadsheet ( or index cards as I used to do ) since they don't have sterling based accounts or reports.

A couple of months immersion into that, and then consider moving to Interactive Brokers for it's much better reporting in the currency of your choice, UK FSA protection, and the ability to trade just about every instrument on any exchange around the world.  ( though for options, it's best to stick to US stocks and futures since they're the most liquid ).

Thanks MvR. SP did mention IB earlier in the thread and I took a look. Not really a big enough player for them at the moment. Tastyworks definetely has what I need for now, just a bit of a pain dealing with fees with wiring money etc. Although one positive is the low commision.

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https://www.investing.com/equities/dennys-corp

Denny's popped up today 22% one of the lessons in staying well spread.Personally I think they're well placed to plummet a la 2008 which looks to have been postponed until the new year.I've got a few shorts left Tesla,Rightmove,Howden.All in the red at the mo.Closed the ones that were up.

Been lucky-and it is luck not judgment -to have avoided getting crushed on L'oreal

Will ditch RMV and HWDN as and when.

My Pru long is doing nicely.I should be positive more often.

Looking more to the US now as many of the big name stocks are 10 baggers from the 09 bottom.

Edited by sancho panza
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On 21/10/2018 at 12:44, MrXxx said:

So just to clarify my understanding of shorting, until you get out you could be liable for infinity (theoretically), but with longs your limit is your purchase price?....I assume shorters hedge themselves for such a scenario by also placing a buy requests at a price just above the market value when they set up their short?

Yes on the "unlimited" loss, however in practice of course it's not going to infinity.

Regarding hedging, you could do that.

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So popped into my local hobby/gaming store today, spurred on by the video @201p  shared yesterday. The shop is nice the way it's kitted out and a breath of fresh air compared to the rest of the crappy high street. Very welcoming, well stocked and a few nerds playing some games at the back. But can't help at wonder who is buying this crap, especially the Games Workshop stuff. Very expensive and I had a flick through the rulebook, it's intense, there really can't be many that play this properly. So is it just for the painting? The big thing is the price of the kits, astronomical for what is essentially a tiny bit of plastic. A few little models are the same price as a giant Bismark model kit. The shop certainly wouldn't be making a killing as it wasn't brimming with buyers. Is it the UK or international, particularly the US that is driving this surge? Seems like the whole gaming collectables thing is going crazy, whether it be cards, Ammibos or retro games etc.

image.png.94873c6e0d1c2d046e96c64b72422281.png

Magic of the Gathering owned by Hasbro

image.png.c0de613ac161e1f9f628a13c72728f08.png

Pokemon and Ammibos owned by Nintendo

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Switch is probably having a big impact on Nintendo rather than the collectibles :D

Edited by Admiral Pepe
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11 minutes ago, Admiral Pepe said:

So popped into my local hobby/gaming store today, spurred on by the video @201p  shared yesterday. The shop is nice the way it's kitted out and a breath of fresh air compared to the rest of the crappy high street. Very welcoming, well stocked and a few nerds playing some games at the back. But can't help at wonder who is buying this crap, especially the Games Workshop stuff. Very expensive and I had a flick through the rulebook, it's intense, there really can't be many that play this properly. So is it just for the painting? The big thing is the price of the kits, astronomical for what is essentially a tiny bit of plastic. A few little models are the same price as a giant Bismark model kit. The shop certainly wouldn't be making a killing as it wasn't brimming with buyers. Is it the UK or international, particularly the US that is driving this surge? Seems like the whole gaming collectables thing is going crazy, whether it be cards, Ammibos or retro games etc.

image.png.94873c6e0d1c2d046e96c64b72422281.png

The GAW model is crazy, but it seems to work.  No-one (particularly) plays -- it is all about the painting.  Massive exports as well (which are also about painting/collecting).

But I actually quite like the company.  UK production, an export success, micro-shops that (amazingly) are all cash-flow positive (I think), holding prices highish in the case of demand outstripping supply (as present), rather than restricting demand through prices rises.

 As far as I can tell it is a quite well run company that is stubbornly refusing to offshore production (despite clear cost advantages*), and that is responding to being 'on trend' by trying to scale into demand but without taking too many risks.   I can't fault them, even if the share price will plunge as soon as market conditions change (and I really hope they survive, and survive it well).

[* well, it isn't all 'being nice' -- it is almost certain that offshoring production to China would be an IP disaster]

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23 minutes ago, dgul said:

The GAW model is crazy, but it seems to work.  No-one (particularly) plays -- it is all about the painting.  Massive exports as well (which are also about painting/collecting).

But I actually quite like the company.  UK production, an export success, micro-shops that (amazingly) are all cash-flow positive (I think), holding prices highish in the case of demand outstripping supply (as present), rather than restricting demand through prices rises.

 As far as I can tell it is a quite well run company that is stubbornly refusing to offshore production (despite clear cost advantages*), and that is responding to being 'on trend' by trying to scale into demand but without taking too many risks.   I can't fault them, even if the share price will plunge as soon as market conditions change (and I really hope they survive, and survive it well).

[* well, it isn't all 'being nice' -- it is almost certain that offshoring production to China would be an IP disaster]

I like the sound of a company being British and keeping it that way. I recall not so long ago they gave their staff a decent bonus I think too on their performance.

Not sure I would buy that on the demand outstripping supply side and I'm wondering if this is the big ruse they're all at. The store was well stocked and now having had a scan online seems like the prices are all the same. So I assume they're doing the right thing as a company and protecting their retailers. With that said I'm getting the impression there is a lot of fake demand and pumping through social media, particularly on the ammibo, card collecting side. I just can't see demand outstripping supply on games workshop.  Interesting though nonetheless. I used play Hero Quest back in the day with a few friends.

Edited by Admiral Pepe
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@dgul A little further research seems like they've launched a TCG this year, in limited print run..... of ten million xD. New booster packs coming out end of month too. This current set is already being trading. Think it really all boils back to @201p's video.

https://trends.google.co.uk/trends/explore?q=warhammer champions

Edited by Admiral Pepe
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  • 2 weeks later...
15 hours ago, azzuri82 said:

Snapchat subpoenad by the SEC over things it "failed to disclose" prior to its IPO.

Still reckon there's firm support at zero for SNAP.

I've been thinkming of firms headed to zero of late.At the mo I only have 1 medium term short and that's TSLA .There's other bubblicious stocks as per below but actually headed to xzero???

Bear market looks game on,given the fangs are breaking sotuh.

List so far for zero potential= TSLA/Netflix/Snap?

Are there any others that resemble the tech bubble

o/t azzuri, Denny's got a big bump a few weeks back.

 

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Edited by sancho panza
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21 minutes ago, sancho panza said:

I've been thinkming of firms headed to zero of late.At the mo I only have 1 medium term short and that's TSLA .There's other bubblicious stocks as per below but actually headed to xzero???

List so far TSLA/Netflix/Snap?

Are there any others that resemble the tech bubble

o/t azzuri, Denny's got a big bump a few weeks back.

 

GE? (although not bubbalisciou, missed that) I don't know about going all the way zero but one can take a big chunk from the nasdaq. AMD, NVIDIA and EA are a couple i suspect will fall hard. Hasbro after xmas is one I have my eye on

Tesla is a funny one. I think one day it will head to zero, but Elon can stay irrational longer than we can stay solvent. 

Edited by Admiral Pepe
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14 minutes ago, Admiral Pepe said:

GE? (although not bubbalisciou, missed that) I don't know about going all the way zero but one can take a big chunk from the nasdaq. AMD, NVIDIA and EA are a couple i suspect will fall hard. Hasbro after xmas is one I have my eye on

Tesla is a funny one. I think one day it will head to zero, but Elon can stay irrational longer than we can stay solvent. 

Wow...impressive exponential phase

image.png.9d969d79b600a95dfce8e4bc02bf1909.png

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12 hours ago, Admiral Pepe said:

GE? (although not bubbalisciou, missed that) I don't know about going all the way zero but one can take a big chunk from the nasdaq. AMD, NVIDIA and EA are a couple i suspect will fall hard. Hasbro after xmas is one I have my eye on

Tesla is a funny one. I think one day it will head to zero, but Elon can stay irrational longer than we can stay solvent. 

Just checked EA,never heard of them before.They've already dropped from $148 to  $85 in four months............

 

Housebuilders got hammered this morning.They've been yoyoing at these levels for a week .Then today,they jsut got walloped.

 

Wonder what's happened?

 

image.png.5911b3effdaeed7f8d212a88d4e47ed2.png

Edited by sancho panza
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3 hours ago, sancho panza said:

Just checked EA,never heard of them before.They've already dropped from $148 to  $85 in four months............

 

Housebuilders got hammered this morning.They've been yoyoing at these levels for a week .Then today,they jsut got walloped.

 

Wonder what's happened?

 

image.png.5911b3effdaeed7f8d212a88d4e47ed2.png

The shambles that is the government and Brexit is what happened.

EA = Electronic Arts. They make video games.

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reformed nice guy
6 hours ago, sancho panza said:

 

 

Housebuilders got hammered this morning.They've been yoyoing at these levels for a week .Then today,they jsut got walloped.

 

Wonder what's happened?

 

image.png.5911b3effdaeed7f8d212a88d4e47ed2.png

Increased chance of Corbyn as PM?

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Check out the Netflix chart for the last 2 years, sorry I'm posting this on my elderly smartphone otherwise I'd do it myself, but if you're a chartist it's real bear food type stuff.

They're screwed.

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11 hours ago, Ash4781b said:

Wow look at the Thomas Cook Plc share price this morning- i’m not sure how bad the profit warning was today.

NAother industry in trouble.I went past a travel shop in Market Harborough the other week,more staff than customers.

https://uk.reuters.com/article/uk-britain-stocks/british-stocks-dented-as-thomas-cook-miners-sink-idUKKCN1NW10C

Thomas Cook Group (TCG.L) plunged as much as 31 percent after it suspended its 2018 dividend and cut its profit forecast for the second time in two months, saying an exceptionally hot summer had deterred Britons from holidaying abroad.

“Thomas Cook’s third profit warning for 2018 cuts underlying EBIT by another c.10 percent versus consensus,” wrote Jefferies analysts.

 

They added that the dividend suspension may concern investors given dividends were only 9 million pounds in 2017.

The stock closed down 22.6 percent at 33.92 p, its weakest in nearly six years and also dragged rival TUI (TUIT.L) down 2.5 percent.

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