Financial Spread Betting Explained: Compare The Best UK

A retirement bonus with a catch.

Another recent TFTS post reminded me of this gem.
Back when I was in college, I had a job as a part-time PC tech for a rather large regional IT contractor in the SF Bay Area. One of our bigger contracted clients was a large medical nonprofit, "MedGroupCo", that we maintained with a bi-weekly maintenance contract. Every two weeks or so, we'd send a handful of techs out to do a quick sweep for problems, tune-up their printers, and perform rotating scheduled maintenance on some of their leased PC's and networking equipment. They had more than 600 computers spread across several medical campuses, along with dozens of shared laser printers and associated network closets. We had a solid maintenance plan in place to keep up with everything and they'd been a happy client for many, many years.
One day, out of the blue, MedGroupCo's CTO "Tom" called us up and asked to renegotiate the contract. The medical group was having financial problems and had just gutted his IT budget...he couldn't afford us any longer. After a long sit-down with our sales and support people, we placed the client into a new and cheaper contract. Rather than visit every two weeks, we'd shift them onto a semiannual maintenance plan. We'd come out twice a year to do regular maintenance, and all other calls would be handled on an on-demand basis. Equipment failures would be covered under the lease warranties, but anything beyond that would involve a per-call support charge. The maintenance visits would be more disruptive and require a larger number of techs, but the overall contract cost was substantially lower. "Six figures annually" lower. We warned them that moving to an on-demand based support model would be a bit of an adjustment. Because we'd been visiting every two weeks, the client had never used our ticketing system before. Their employees usually just jotted their computer issues down on a piece of paper and taped them to the sides of their monitors, knowing that we'd be by within a couple of weeks to get them fixed. We emphasized to the client that this might be an employee training issue, but the CTO insisted that he could get his users trained to use the new ticketing system and that it wouldn't be a problem.
Fast forward five months.
Our department manager had started to plan the first of MedGroupCo's semiannual maintenance visits and opened their ticket history to see whether they'd been having any recurring issues that might need special attention. Nada. And by "nada", I don't mean "No recurring issues". I mean no issues at all. The company hadn't filed a single ticket. That was...unlikely. At a minimum, they should have statistically had at least a half-dozen PC crashes during that period, and their printers should have required some maintenance. In hindsight, the manager later admitted that we should have followed up with the company sooner after the contract switch, but we had a LOT of clients and support was spread across several teams, so nobody had noticed that one of our biggest clients hadn't logged a single ticket. Because MedGroupCo hadn't logged any complaints, there was a general assumption that the client was submitting tickets and that they were being handled by one of the other teams.
Our department manager, worried about the discovery, called up their CTO's office and asked for Tom. He was even more worried when the receptionist responded with, "I'm sorry, but Tom retired three months ago. Would you like to speak with our new CTO Dave? Can I ask whose calling? Please hold while I get him on the line."
After a long time on hold, the receptionist came back on with a curt, "Dave isn't currently available to speak with you and he said that we no longer do business with your company. Can I take a message?"
What? We just signed a five-year, $3+ million contract. You bet we'd like to leave a message.
CTO Dave called us back the next day. He dove right in and wasn't kind: "Your company violated our contract and we fired you. When I was hired, we had more than 50 computers that weren't working at all, nothing had been maintained in months, and our printers were a disaster. Every single user had support requests that had never been addressed. This was the most unprofessional thing I've ever completely abandoned us and we've contracted with CompetitorCorp for our maintenance from now on."
What again?!?!? Our support manager patiently explained to their CTO that we hadn't abandoned anything and that we had a signed contract stating that we'd only be doing onsites every six months. As for their claims that we'd failed to support them, we pointed out that the company had never logged a single support ticket. We'd have happily fixed anything they requested, but they'd never asked. The new CTO, looking over a freshly emailed, newly scanned copy of the current, signed contract, was dumbfounded. He'd never seen it before. He'd...have to call us back.
Two days later, our company leadership, CTO Dave, MedGroupCo's CEO, and a bunch of lawyers sat down for a meeting. Apparently, MedGroupCo had a "cost savings benefit" they offered to their employees. If you find a way to reduce operating costs, the company will credit the first-year savings to the employee as a "bounty". Literally, if an employee found a way to save the company a million dollars a year, they'd give the employee a million dollars. I'd want that deal! CTO Tom wanted that deal too. As it turned out, there had never been any budget cuts. Tom had simply known his retirement was approaching and renegotiated the contract to shave nearly a quarter-million dollars off MedGroupCo's IT maintenance contract...neatly pocketing that quarter-million-dollar "bounty" for himself as he headed out the door.
This deception left MedGroupCo in a tough position. They still had four and a half years left on their five-year, $3+ million contract with our company. And they'd just signed a new five-year, $4 million contract with CompetitorCorp. Both contracts were binding. MedCoGroup was stuck.
Because they'd been a customer for so long, our CEO had a bit of sympathy and made them an offer. He'd allow them to end their contract for $1 million, on the stipulation that they sign an agreement to rejoin our company when their 5-year contract with CompetitorCorp expired. He even sweetened the deal by offering to credit the $1 million to their new contract when they returned. They'd been a profitable customer for a very long time, and he was willing to take a short-term hit in exchange for getting them back in the future. MedGroupCo loved the offer and would have signed the agreement right there, but one of our managers picked that moment to bring up another issue by asking, "Did your contract with CompetitorCorp include equipment? Because if you're not under contract with us we'll need to retrieve all of our leased computers, printers and networking equipment."
Alas, CompetitorCorps's agreement DID include hardware. And printers. And networking equipment. They'd already swapped everything out with shiny new hardware maintained under CompetitorCorp's own leases. And what had CompetitorCorp done with our hardware? As the story was later told, CTO Dave had told them, "They abandoned the equipment...just wipe it and send it all to the dump."
And with that, a $1.4 million dollar equipment loss fee was tacked onto that $1 million buyout, which was promptly refused by MedGroupCo's CEO. The lawyers on both sides went to work feverishly pointing at various clauses in the contracts, trying to negotiate higher ground and paint themselves as the victims in this debacle. Lawsuits were filed. Countersuits were filed. Law enforcement was called in to investigate. Newspapers ran stories about the mean IT company that was trying to fleece money from the poor, poor doctors. And, in the end, MedGroupCo cut us a settlement check for $2 million.
And CTO Tom? Last I heard, he was enjoying his retirement. He was never arrested, charged, or sued for his role in any of it.
submitted by codefyre to talesfromtechsupport [link] [comments]

The Mouthbreather's Guide to the Galaxy

The Mouthbreather's Guide to the Galaxy
Alright CYKAS, Drill Sgt. Retarded TQQQ Burry is in the house. Listen up, I'm gonna train yo monkey asses to make some motherfucking money.

“Reeee can’t read, strike?” - random_wsb_autist
Bitch you better read if you want your Robinhood to look like this:
gainz, bitch

Why am I telling you this?
Because I like your dumb asses. Even dickbutts like cscqb4. And because I like seeing Wall St. fucking get rekt. Y’all did good until now, and Wall St. is salty af. Just google for “retail traders” news if you haven’t seen it, and you’ll see the salty tears of Wall Street assholes. And I like salty Wall St. assholes crying like bitches.

That said, some of you here are really motherfucking dense & the sheer influx of retardation has been driving away some of the more knowledgeable folks on this sub. In fact, in my last post, y'all somehow managed to downvote to shit the few guys that really understood the points I was making and tried to explain it to you poo-slinging apes. Stop that shit yo! A lot of you need to sit the fuck down, shut your fucking mouth and listen.
So I'm going to try and turn you rag-tag band of dimwits into a respectable army of peasants that can clap some motherfucking Wall Street cheeks. Then, I'm going to give you a mouthbreather-proof trade that I don't think even you knuckleheads can mess up (though I may be underestimating you).
If you keep PM-ing me about your stupid ass losses after this, I will find out where you live and personally, PERSONALLY, shit on your doorstep.
This is going to be a long ass post. Read the damned post. I don't care if you're dyslexic, use text-to-speech. Got ADHD? Pop your addys, rub one out, and focus! Are you 12? Make sure to go post in the paper trading contest thread first.

  1. Understand that most of this sub has the critical reading skills of a 6 year old and the attention span of a goldfish. As such, my posts are usually written with a level of detail aimed at the lowest common denominator. A lot of details on the thesis are omitted, but that doesn't mean that the contents in the post are all there is to it. If I didn't do that, every post'd have to be longer than this one, and 98% of you fucks wouldn't read it anyway. Fuck that.
  2. Understand that my style of making plays is finding the >10+ baggers that are underpriced. As such, ALL THE GOD DAMN PLAYS I POST ARE HIGH-RISK / HIGH-REWARD. Only play what you can afford to risk. And stop PM-ing me the second the market goes the other way, god damn it! If you can't manage your own positions, I'm going to teach your ass the basics.
  3. Do you have no idea what you're doing and have a question? Google it first. Then google it again. Then Bing it, for good measure. Might as well check PornHub too, you never know. THEN, if you still didn't find the answer, you ask.
  4. This sub gives me Tourette's. If you got a problem with that, well fuck you.

This shit is targeted at the mouthbreathers, but maybe more knowledgeable folk’ll find some useful info, idk. How do you know if you’re in the mouthbreather category? If your answer to any of the following questions is yes, then you are:
  • Are you new to trading?
  • Are you unable to manage your own positions?
  • Did you score into the negatives on the SAT Critical Reading section?
  • Do you think Delta is just an airline?
  • Do you buy high & sell low?
  • Do you want to buy garbage like Hertz or American Airlines because it's cheap?
  • Did you buy USO at the bottom and are now proud of yourself for making $2?
  • Do you think stOnKs oNLy Go uP because Fed brrr?
  • Do you think I'm trying to sell you puts?
  • If you take a trade you see posted on this sub and are down, do you PM the guy posting it?
  • Do you generally PM people on this sub to ask them basic questions?
  • Is your mouth your primary breathing apparatus?
Well I have just the thing for you!

Table of Contents:
I. Maybe, just maybe, I know what I’m talking about
II. Post-mortem of the February - March 2020 Great Depression
III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS
IV. Busting your retarded myths
VI. The mouthbreather-proof trade - The Akimbo
VII. Quick hints for non-mouthbreathers

Chapter I - Maybe, just maybe, I know what I’m talking about
I'm not here to rip you off. Every fucking time I post something, a bunch of dumbasses show up saying I'm selling you puts or whatever the fuck retarded thoughts come through their caveman brains.
"hurr durr OP retarded, OP sell puts" - random_wsb_autist
Sit down, Barney, I'm not here to scam you for your 3 cents on OTM puts. Do I always get it right? Of course not, dumbasses. Eurodollar play didn't work out (yet). Last TQQQ didn't work out (yet). That’s just how it goes. Papa Buffet got fucked on airlines. Plain retard Burry bought GME. What do you fucking expect?
Meanwhile, I keep giving y'all good motherfucking plays:
  1. 28/10/2019: "I'ma say this again, in case you haven't heard me the first time. BUY $JNK PUTS NOW!". Strike: "11/15, 1/17 and 6/19". "This thing can easily go below 50, so whatever floats your boat. Around $100 strike is a good entry point."
  2. 3/9/2020: "I mean it's a pretty obvious move, but $JNK puts."
  3. 3/19/2020, 12pm: "UVXY put FDs are free money." & “Buy $UVXY puts expiring tomorrow if we're still green at 3pm. Trust me.”
  4. 3/24/2020: “$UUP 3/27 puts at $27.5 or $27 should be 10-baggers once the bill passes. I'd expect it to go to around $26.”
And of course, the masterpiece that was the TQQQ put play.
Chapter II. Post-mortem of the February - March 2020 Great Depression
Do you really understand what happened? Let's go through it.
I got in puts on 2/19, right at the motherfucking top, TQQQ at $118. I told you on 2/24 TQQQ ($108) was going to shit, and to buy fucking puts, $90ps, $70ps, $50ps, all the way to 3/20 $30ps. You think I just pulled that out of my ass? You think I just keep getting lucky, punks? Do you have any idea how unlikely that is?
Well, let's take a look at what the fuckstick Kevin Cook from Zacks wrote on 3/5:
How Many Sigmas Was the Flash Correction Plunge?
"Did you know that last week's 14% plunge in the S&P 500 SPY was so rare, by statistical measures, that it shouldn't happen once but every 14,000 years?"
"By several measures, it was about a 5-sigma move, something that's not "supposed to" happen more than once in your lifetime -- or your prehistoric ancestors' lifetimes!
"According to general statistical principles, a 4-sigma event is to be expected about every 31,560 days, or about 1 trading day in 126 years. And a 5-sigma event is to be expected every 3,483,046 days, or about 1 day every 13,932 years."

On 3/5, TQQQ closed at $81. I just got lucky, right? You should buy after a 5-sigma move, right? That's what fuckstick says:
"Big sigma moves happen all the time in markets, more than any other field where we collect and analyze historical data, because markets are social beasts subject to "wild randomness" that is not found in the physical sciences.
This was the primary lesson of Nassim Taleb's 2007 book The Black Swan, written before the financial crisis that found Wall Street bankers completely ignorant of randomness and the risks of ruin."
I also took advantage of the extreme 5-sigma sell-off by grabbing a leveraged ETF on the Nasdaq 100, the ProShares UltraPro QQQ TQQQ. In my plan, while I might debate the merits of buying AAPL or MSFT for hours, I knew I could immediately buy them both with TQQQ and be rewarded very quickly after the 14% plunge."
Ahahaha, fuckstick bought TQQQ at $70, cuz that's what you do after a random 5-sigma move, right? How many of you dumbasses did the same thing? Don't lie, I see you buying 3/5 on this TQQQ chart:
Meanwhile, on 3/3, I answered the question "Where do you see this ending up at in the next couple weeks? I have 3/20s" with "under 30 imo".

Well good fucking job, because a week later on 3/11, TQQQ closed at $61, and it kept going.
Nomura: Market staring into the abyss
"The plunge in US equities yesterday (12 March) pushed weekly returns down to 7.7 standard deviations below the norm. In statistical science, the odds of a greater-than seven-sigma event of this kind are astronomical to the point of being comical (about one such event every 160 billion years).
Let's see what Stephen Mathai-Davis, CFA, CQF, WTF, BBQ, Founder and CEO of - Investing Reimagined, a Forbes Company, and a major fucktard has to say at this point:

"Our AI models are telling us to buy SPY (the SPDR S&P500 ETF and a great proxy for US large-cap stocks) but since all models are based on past data, does it really make sense? "
"While it may or may not make sense to buy stocks, it definitely is a good time to sell “volatility.” And yes, you can do it in your brokerage account! Or, you can ask your personal finance advisor about it."
"So what is the takeaway? I don’t know if now is the right time to start buying stocks again but it sure looks like the probabilities are in your favor to say that we are not going to experience another 7 standard deviation move in U.S. Stocks. OTM (out-of-the-money) Put Spreads are a great way to get some bullish exposure to a rally in the SPY while also shorting such rich volatility levels."
Good job, fuckfaces. Y'all bought this one too, admit it. I see you buying on this chart:
Well guess what, by 3/18, a week later, we did get another 5 standard deviation move. TQQQ bottomed on 3/18 at $32.73. Still think that was just luck, punk? You know how many sigmas that was? Over 12 god-damn sigmas. 12 standard deviations. I'd have a much better chance of guessing everyone's buttcoin private key, in a row, on the first try. That's how unlikely that is.
"Hurr durr you said it's going to 0, so you're retarded because it didn't go to 0" - random_wsb_autist
Yeah, fuckface, because the Fed bailed ‘em out. Remember the $150b “overnight repo” bazooka on 3/17? That’s what that was, a bailout. A bailout for shitty funds and market makers like Trump's handjob buddy Kenny Griffin from Citadel. Why do you think Jamie Dimon had a heart attack in early March? He saw all the dogshit that everyone put on his books.


Yup, everyone got clapped on their stupidly leveraged derivatives books. It seems Citadel is “too big to fail”. On 3/18, the payout on 3/20 TQQQ puts alone if it went to 0 was $468m. And every single TQQQ put expiration would have had to be paid. Tens or hundreds of billions on TQQQ puts alone. I’d bet my ass Citadel was on the hook for a big chunk of those. And that’s just a drop in the bucket compared to all the other blown derivative trades out there.
Y’all still did good, 3/20 closed at $35. That’s $161m/$468m payoff just there. I even called you the bottom on 3/17, when I saw that bailout:

"tinygiraffe21 1 point 2 months ago
Haha when? I’m loading up in 4/17 25 puts"
Scratch that, helicopter money is here."
"AfgCric 1 point 2 months ago
What does that mean?"
"It means the Fed & Trump are printing trillions with no end in sight. If they go through with this, this was probably the bottom."

"hurr durr, it went lower on 3/18 so 3/17 wasn't the bottom" - random_wsb_autist
Idiot, I have no way of knowing that Billy boy Ackman was going to go on CNBC and cry like a little bitch to make everyone dump, so he can get out of his shorts. Just like I have no way of knowing when the Fed decides to do a bailout. But you react to that, when you see it.
Do you think "Oh no world's ending" and go sell everything? No, dumbass, you try to figure out what Billy's doing. And in this case it was pretty obvious, Billy saw the Fed train coming and wanted to close his shorts. So you give the dude a hand, quick short in and out, and position for Billy dumping his short bags.
Video of Billy & the Fed train

Here's what Billy boy says:
“But if they don’t, and the government takes the right steps, this hedge could be worth zero, and the stock market could go right back up to where it was. So we made the decision to exit.”
Also, “the single best trade of all time.” my ass, it was only a 100-bagger. I gave y’all a 150-bagger.
So how could I catch that? Because it wasn't random, yo. And I'm here to teach your asses how to try to spot such potential moves. But first, the technical bootcamp.

Chapter III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS

RULE 1. YOU NEVER BUY OPTIONS AT OPEN. You NEVER OVERPAY for an option. You never FOMO into buying too fast. You NEVER EVER NEVER pump the premium on a play.
I saw you fuckers buying over 4k TQQQ 5/22 $45 puts in the first minutes of trading. You pumped the premium to over $0.50 dudes. The play's never going to work if you do that, because you give the market maker free delta, and he's going to hedge that against you. Let me explain simply:

Let's say a put on ticker $X at strike $50 is worth $1, and a put at strike $51 is worth $2.
If you all fomo in at once into the same strike, the market maker algos will just pull the asks higher. If you overpay at $2 for the $50p, the market maker will just buy $51ps for $2 and sell you $50ps for 2$. Or he'll buy longer-dated $50ps and sell you shorter-dated $50ps. Max risk for him is now 0, max gain is $1. You just gave him free downside insurance, so of course he's going to start going long. And you just traded against yourself, congrats.

You need to get in with patience, especially if you see other autists here wanting to go in at the same time. Don't step on each other's toes. You put in an order, and you wait for it to fill for a couple of seconds. If it doesn't fill, AND the price of the option hasn't moved much recently, you can bump the bid $0.01. And you keep doing that a few times. Move your strikes, if needed. Only get a partial fill or don't get a fill at all? You cancel your bid. Don't fucking leave it hanging there, or you're going to put a floor on the price. Let the mm algos chill out and go again later.

RULE 2. WATCH THE TIME. Algos are especially active at x:00, x:02, x:08, x:12, x:30 and x:58. Try not to buy at those times.
RULE 3. YOU USE MULTIPLE BROKERS. Don't just roll with Robinhood, you're just gimping yourself. If you don't have another one, open up a tasty, IB, TD, Schwab, whatever. But for cheap faggy puts (or calls), Robinhood is the best. If you want to make a play for which the other side would think "That's free money!", Robinhood is the best. Because Citadel will snag that free money shit like no other. Seriously, if you don't have a RH account, open one. It's great for making meme plays.

RULE 4. YOU DON'T START A TRADE WITH BIG POSITIONS. Doesn't matter how big or small your bankroll is. If you go all-in, you're just gambling, and the odds are stacked against you. You need to have extra cash to manage your positions. Which leads to
RULE 5. MANAGING YOUR WINNERS: Your position going for you? Good job! Now POUND THAT SHIT! And again. Move your strikes to cheaper puts/calls, and pound again. And again. Snowball those gains.
So you bought some puts and they’re going down? Well, the moment they reach $0.01, YOU POUND THOSE PUTS (assuming there’s enough time left on them, not shit expiring in 2h). $0.01 puts have amazing risk/return around the time they reach $0.01. This is not as valid for calls. Long explanation why, but the gist of it is this: you know how calls have unlimited upside while puts have limited upside? Well it’s the reverse of that.
Your position going against you? Do you close the position, take your loss porn and post it on wsb? WRONG DUMBASS. You manage that by POUNDING THAT SHIT. Again and again. You don't manage losing positions by closing. That removes your gainz when the market turns around. You ever close a position, just to have it turn out it would have been a winner afterwards? Yeah, don't do that. You manage it by opening other positions. Got puts? Buy calls. Got calls? Buy puts. Turn positions into spreads. Buy spreads. Buy the VIX. Sell the VIX. They wanna pin for OPEX? Sell them options. Not enough bankroll to sell naked? Sell spreads. Make them fight you for your money, motherfuckers, don't just give it away for free. When you trade, YOU have the advantage of choosing when and where to engage. The market can only react. That's your edge, so USE IT! Like this:

Example 1:
Initial TQQQ 5/22 position = $5,000. Starts losing? You pound it.
Total pounded in 5/22 TQQQ puts = $10,824. Unfortunately expired worthless (but also goes to show I'm not selling you puts, dickwads)
Then the autists show up:
"Hahaha you lost all your money nice job you fucking idiot why do you even live?" - cscqb4
Wrong fuckface. You see the max pain at SPX 2975 & OPEX pin coming? Sell them some calls or puts (or spreads).
Sold 9x5/20 SPX [email protected], bam +$6,390. Still wanna pin? Well have some 80x5/22 TQQQ $80cs, bam anotha +$14,700.
+$21,090 - $10,824 = +$10,266 => Turned that shit into a +94.85% gain.

.cscqb4 rn

You have a downside position, but market going up or nowhere? You play that as well. At least make some money back, if not profit.

Example 2:

5/22, long weekend coming right? So you use your brain & try to predict what could happen over the 3-day weekend. Hmm, 3 day weekend, well you should expect either a shitty theta-burn or maybe the pajama traders will try to pooomp that shite on the low volume. Well make your play. I bet on the shitty theta burn, but could be the other, idk, so make a small play.

Sold some ES_F spreads (for those unaware, ES is a 50x multiplier, so 1 SPX = 2 ES = 10 SPY, approximately). -47x 2955/2960 bear call spreads for $2.5. Max gain is $2.5, max loss is 2960-2955 = $5. A double-or-nothing basically. That's $5,875 in premium, max loss = 2x premium = $11,750.
Well, today comes around and futures are pumping. Up to 3,014 now. Do you just roll over? You think I'm gonna sit and take it up the ass? Nah bros that's not how you trade, you fucking fight them. How?
I have:
47x 2960 calls
-47x 2955 calls

Pajama traders getting all up in my grill? Well then I buy back 1 of the 2955 calls. Did that shit yesterday when futures were a little over 2980, around 2982-ish. Paid $34.75, initially shorted at $16.95, so booked a -$892 loss, for now. But now what do I have?

46x 2955/2960 bear calls
1x 2960 long call

So the fuckers can pump it. In fact, the harder they pump it, the more I make. Each $2.5 move up in the futures covers the max loss for 1 spread. With SPX now at ~3015, that call is $55 ITM. Covers 24/46 contracts rn. If they wanna run it up, at 3070 it's break-even. Over that, it's profit. I'll sell them some bear call spreads over 3050 if they run it there too. They gonna dump it? well under 2960 it's profit time again. They wanna do a shitty pin at 3000 today? Well then I'll sell them some theta there.
Later edit: that was written yesterday. Got out with a loss of only $1.5k out of the max $5,875. Not bad.
And that, my dudes, is how you manage a position.

RULE 7 (ESPECIALLY FOR BEARS). YOU DON'T KEEP EXTRA CASH IN YOUR BROKER ACCOUNT. You don't do it with Robinhood, because it's a shitty dumpsterfire of a broker. But you don't do it with other brokers either. Pull that shit out. Preferably to a bank that doesn't play in the markets either, use a credit union or some shit. Why? Because you're giving the market free liquidity. Free margin loans. Squeeze that shit out, make them work for it. Your individual cash probably doesn't make a dent, but a million autists with an extra $1200 trumpbucks means $1.2b. That's starting to move the needle. You wanna make a play, use instant deposits. And that way you don't lose your shit when your crappy ass broker or bank gets its ass blown up on derivative trades. Even if it's FDIC or SIPC insured, it's gonna take time until you see that money again.



Do you think the market can go up forever? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think SPX will be at 5000 by the end of the month? Do you think $1.5 trillion is a good entry point for stonks like AAPL or MSFT? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $2? Well, this section is for you!
Let's clear up the misconception that stonks only go up while Fed brrrs.

What's your target for the SPX top? Think 3500 by the end of the year? 3500 by September? 4000? 4500? 5000? Doesn't matter, you can plug in your own variables.

Let's say SPX only goes up, a moderate 0.5% each period as a compounded avg. (i.e. up a bit down a bit whatever, doesn't matter as long as at the end of your period, if you look back and do the math, you'll get that number). Let's call this variable BRRR = 0.005.

Can you do the basic math to calculate the value at the end of x periods? Or did you drop out in 5th grade? Doesn't matter if not, I'll teach you.

Let's say our period is one week. That is, SPX goes up on average 0.5% each week on Fed BRRR:
2950 * (1.005^x), where x is the number of periods (weeks in this case)

So, after 1 month, you have: 2950 * (1.005^4) = 3009
After 2 months: 2950 * (1.005^8) = 3070
End of the year? 2950 * (1.005^28) = 3392

Now clearly, we're already at 3015 on the futures, so we're moving way faster than that. More like at a speed of BRRR = 1%/wk

2950 * (1.01^4) = 3069
2950 * (1.01^8) = 3194
2950 * (1.01^28) = 3897

Better, but still slower than a lot of permabulls would expect. In fact, some legit fucks are seriously predicting SPX 4000-4500 by September. Like this dude, David Hunter, "Contrarian Macro Strategist w/40+ years on Wall Street". IDIOTIC.

That'd be 2950 * (BRRR^12) = 4000 => BRRR = 1.0257 and 2950 * (BRRR^12) = 4500 => BRRR = 1.0358, respectively.

Here's why that can't happen, no matter the amount of FED BRRR: Leverage. Compounded Leverage.

There's currently over $100b in leveraged etfs with a 2.5x avg. leverage. And that's just the ones I managed to tally, there's a lot of dogshit small ones on top of that. TQQQ alone is now at almost $6b in AUM (topped in Fed at a little over $7b).

Now, let's try to estimate what happens to TQQQ's AUM when BRRR = 1.0257. 3XBRRR = 1.0771. Take it at 3XBRRR = 1.07 to account for slippage in a medium-volatility environment and ignore the fact that the Nasdaq-100 would go up more than SPX anyway.

$6,000,000,000 * (1.07^4) = $7,864,776,060
$6,000,000,000 * (1.07^8) = $10,309,100,000
$6,000,000,000 * (1.07^12) = $13,513,100,000
$6,000,000,000 * (1.07^28) = $39,893,000,000.

What if BRRR = 1.0358? => 3XBRR = 1.1074. Take 3XBRRR = 1.10.
$6,000,000,000 * (1.1^4) = $8,784,600,000
$6,000,000,000 * (1.1^8) = $12,861,500,000
$6,000,000,000 * (1.1^12) = $18,830,600,000
$6,000,000,000 * (1.1^28) = $86,526,000,000

And this would have to get 3x leveraged every day. And this is just for TQQQ.

Let's do an estimation for all leveraged funds. $100b AUM, 2.5 avg. leverage factor, BRRR = 1.0257 => 2.5BRRR = 1.06425

$100b * (1.06^4) = $128.285b
$100b * (1.06^8) = $159.385b
$100b * (1.06^12) = $201.22b
$100b * (1.06^28) = $511.169b

That'd be $1.25 trillion sloshing around each day. And the market would have to lose each respective amount of cash into these leveraged funds. Think the market can do that? You can play around with your own variables. But understand that this is just a small part of the whole picture, many other factors go into this. It's a way to put a simple upper limit on an assumption, to check if it's reasonable.

In the long run, it doesn't matter if the Fed goes BRRR, if TQQQ takes in it's share of 3XBRRR. And the Fed can't go 3XBRRR, because then TQQQ would take in 9XBRRR. And on top of this, you have a whole pile of leveraged derivatives on top of these leveraged things. Watch (or rewatch) this: Selena Gomez & Richard H. Thaler Explaining Synthetic CDO through BLACKJACK

My general point, at the mouth-breather level, is that Fed BRRR cannot be infinite, because leverage.
And these leveraged ETFs are flawed instruments in the first place. It didn't matter when they started out. TQQQ and SQQQ started out at $8m each. For the banks providing the swaps, for the market providing the futures contracts, whatever counter-party to whatever instrument they would use, that was fine. Because it balanced out. When TQQQ made a million, SQQQ lost a million (minus a small spread, which was the bank's profit). Bank was happy, in the long run things would even out. Slippage and spreads and fees would make them money. But then something happened. Stonks only went up. And leveraged ETFs got bigger and more and more popular.
And so, TQQQ ended up being $6-7b, while SQQQ was at $1b. And the same goes for all the other ETFs. Long leveraged ETF AUM became disproportionate to short AUM. And it matters a whole fucking lot. Because if you think of the casino, TQQQ walks up every day and says "I'd like to put $18b on red", while SQQQ walks up and says "I'd only like to put $3b on black". And that, in turn, forces the banks providing the swaps to either eat shit with massive losses, or go out and hedge. Probably a mix of both. But it doesn't matter if the banks are hedged, someone else is on the other side of those hedges anyway. Someone's eating a loss. Can think of it as "The Market", in general, eating the loss. And there's only so much loss the market can eat before it craps itself.

If you were a time traveller, how much money do you think you could make by trading derivatives? Do you think you could make $20 trillion? You know the future prices after all... But no, you couldn't. There isn't enough money out there to pay you. So you'd move the markets by blowing them up. Call it the Time-travelling WSB Autist Paradox.

If you had a bucket with a hole in the bottom, even if you poured an infinite amount of water into it, it would never be full. Because there's a LIQUIDITY SINK, just like there is one in the markets.
And that, my mouth-breathing friends, is the reason why FED BRRR cannot be infinite. Or alternatively, "STONKS MUST GO BOTH UP AND DOWN".


On Jan 14, 2020, I predicted this: Assuming that corona doesn't become a problem, "AAPL: Jan 28 $328.3, Jan 31 $316.5, April 1 $365.7, May 1 $386, July 1 $429 December 31 $200."
Now take a look at the AAPL chart in January. After earnings AAPL peaked at $327.85. On 1/31, after the 1st hour of trading, when the big boys make moves, it was at $315.63. Closed 1/31 at $309.51. Ya think I pulled this one out of my ass too?
Yes you can time it. Flows, motherfucker, flows. Money flow moves everything. And these days, we have a whole lot of RETARDED FLOW. Can't even call it dumb flow, because it literally doesn't think. Stuff like:

  • ETF flows. If MSFT goes up and AAPL goes down, part of that flow is going to move from AAPL to MSFT. Even if MSFT flash-crashes up to $1000, the ETF will still "buy". Because it's passive.
  • Option settlement flows. Once options expire, money is going to flow from one side to another, and that my friends is accurately predictable from the data.
  • Index rebalancing flows
  • Buyback flows
  • 401k passive flows
  • Carry trade flows
  • Tax day flows
  • Flows of people front-running the flows

And many many others. Spot the flow, and you get an edge. How could I predict where AAPL would be after earnings within 50 cents and then reverse down to $316 2 days later? FLOWS MOTHERFUCKER FLOWS. The market was so quiet in that period, that is was possible to precisely figure out where it ended up. Why the dump after? Well, AAPL earnings (The 8-K) come out on a Wednesday. The next morning, after market opens the 10-Q comes out. And that 10-Q contains a very important nugget of information: the latest number of outstanding shares. But AAPL buybacks are regular as fuck. You can predict the outstanding shares before the market gets the 10-Q. And that gives you EDGE. Which leads to


Are you one of those mouthbreathers that parrots the phrase "buybacks are just a tax-efficient way to return capital to shareholders"? Well sit the fuck down, I have news for you. First bit of news, you're dumb as shit. Second bit:

On 1/28, AAPL's market cap is closing_price x free_float_outstanding_shares. But that's not the REAL MARKET CAP. Because the number of outstanding shares is OLD AS FUCK. When the latest number comes out, the market cap changes instantly. And ETFs start moving, and hedges start being changed, and so on.

"But ETFs won't change the number of shares they hold, they will still hold the same % of AAPL in the index" - random_wsb_autist

Oh my fucking god you're dumb as fuck. FLOWS change. And the next day, when TQQQ comes by and puts its massive $18b dong on the table, the market will hedge that differently. And THAT CAN BE PREDICTED. That's why AAPL was exactly at $316 1 hour after the market opened on 1/31.

So, what can you use to spot moves? Let me show you:
Market topped on 2/19. Here’s SPY. I even marked interesting dates for you with vertical lines.
Nobody could have seen it coming, right? WRONG AGAIN. Here:
In fact, JPYUSD gave you two whole days to see it. Those are NOT normal JPYUSD moves. But hey maybe it’s just a fluke? Wrong again.
Forex showed you that all over the place. Why? FLOWS MOTHERFUCKER FLOWS. When everything moves like that, it means the market needs CASH. It doesn’t matter why, but remember people pulling cash out of ATMs all over the world? Companies drawing massive revolvers? Just understand what this flow means.
The reversal:
But it wasn’t just forex. Gold showed it to you as well. Bonds showed it to you as well.
Even god damn buttcoin showed it to you.
And they all did it for 2 days before the move hit equities.

You see all these bankruptcies that happened so far, and all the ones that are going to follow? Do you think that’s just dogshit companies and it won’t have major effects on anything outside them? WRONG.
Because there’s a lot of leveraged instruments on top of those equities. When the stock goes to 0, all those outstanding puts across all expirations get instantly paid.
Understand that Feb-March was a liquidity MOAB. But this will end with a liquidity nuke.
Here’s just HTZ for example: $239,763,550 in outstanding puts. Just on a single dogshit small-cap company (this thing was like $400m mkt. cap last week).
And that’s just the options on the equity. There’s also instruments on etfs that hold HTZ, on the bonds, on the ETFs that hold their bonds, swaps, warrants, whatever. It’s a massive pile of leverage.
Then there’s also the ripple effects. Were you holding a lot of HTZ in your brokerage margin account? Well guess what big boi, when that gaps to 0 you get a margin call, and then you become a liquidity drain. Holding long calls? 0. Bonds 0. DOG SHIT!
And the market instantly goes from holding $x in assets (HTZ equity / bonds / calls) to holding many multiples of x in LIABILITIES (puts gone wrong, margin loans, derivatives books, revolvers, all that crap). And it doesn’t matter if the Fed buys crap like HTZ bonds. You short them some. Because when it hits 0, it’s no longer about supply and demand. You get paid full price, straight from Jerome’s printer. Is the Fed going to buy every blown up derivative too? Because that's what they'd have to do.
Think of liquidity as a car. The faster it goes, the harder it becomes to go even faster. At some point, you can only go faster by driving off a cliff. THE SQUEEZE. But you stop instantly when you hit the ground eventually. And that’s what shit’s doing all over the place right now.
And just like that fucker, “I’m standing in front of a burning house, and I’m offering you fire insurance on it.”

Don’t baghold!
Now is not the time to baghold junk. Take your cash. Not the time to buy cheap crap. You don’t buy Hertz. You don’t buy USO. You don’t buy airlines, or cruises, or GE, or motherfucking Disney. And if you have it, dump that shit.
And the other dogshit that’s at ATH, congrats you’re in the green. Now you take your profits and fucking dump that shit. I’m talking shit like garbage SaaS, app shit, AI shit, etc. Garbage like MDB, OKTA, SNAP, TWLO, ZM, CHGG etc.
And you dump those garbage ass leveraged ETFs. SQQQ, TQQQ, whatever, they’re all dogshit now.
The leverage MUST unwind. And once that’s done, some of you will no longer be among us if you don’t listen. A lot of leveraged ETFs will be gone. Even some non-leveraged ETFs will be gone. Some brokers will be gone, some market makers will be gone, hell maybe even some big bank has to go under. I can’t know which ones will go poof, but I can guarantee you that some will. Another reason to diversify your shit. There’s a reason papa Warrant Buffet dumped his bags, don’t think you’re smarter than him. He may be senile, but he’s still a snake.
And once the unwind is done, THEN you buy whatever cheap dogshit’s still standing.
Got it? Good.
You feel ready to play yet? Alright, so you catch a move. Or I post a move and you wanna play it. You put on a small position. When it’s going your way, YOU POUND DAT SHIT. Still going? Well RUSH B CYKA BLYAT AND PLANT THE GOD DAMN 3/20 $30p BOMB.

Chapter VI - The mouthbreather-proof play - THE AKIMBO
Still a dumbass that can’t make a play? Still want to go long? Well then, I got a dumbass-proof trade for you. I present to you THE AKIMBO:

STEP 1. You play this full blast. You need some real Russian hardbass to get you in the right mood for trading, cyka.
STEP 2. Split your play money in 3. Remember to keep extra bankroll for POUNDING THAT SHIT.
STEP 3. Use 1/3 of your cash to buy SQQQ 9/18 $5p, pay $0.05. Not more than $0.10.
STEP 4. Use 1/3 of your cash to buy TQQQ 9/18 $20p, pay around $0.45. Alternatively, if you’re feeling adventurous, 7/17 $35p’s for around $0.5.
STEP 5. Use 1/3 of your cash to buy VIX PUT SPREADS 9/15 $21/$20 spread for around $0.15, no more than $0.25. That is, you BUY the 21p and SELL the 20p. Only using Robinhood and don’t have the VIX? What did I just tell you? Well fine, use UVXY then. Just make sure you don’t overpay.

Chapter VII - Quick hints for non-mouthbreathers
Quick tips, cuz apparently I'm out of space, there's a 40k character limit on reddit posts. Who knew?

  1. Proshares is dogshit. If you don't understand the point in my last post, do this: download and Easier to see than with TQQQ. AUM: 1,174,940,072. Add up the value of all the t-bills = 1,686,478,417.49 and "Net other assets / cash". It should equal the AUM, but you get 2,861,340,576. Why? Because that line should read: NET CASH = -$511,538,344.85
  2. Major index rebalancing June 22.
  3. Watch the violent forex moves.
  4. 6/25 will be red. Don't ask, play a spread, bag a 2x-er.
  5. 6/19 will be red.
  6. Not settled yet, but a good chance 5/28 is red.
  7. Front run the rebalance. Front-run the front-runners of the rebalance too. TQQQ puts.
  8. Major retard flow in financials yesterday. Downward pressure now. GS 180 next weeks looks good.
  9. Buy leaps puts on dogshit bond ETFs (check holdings for dogshit)
  10. Buy TLT 1/15/2021 $85ps for cheap, sell over $1 when the Fed stops the ass rape, rinse and repeat
  11. TQQQ flow looks good:

Good luck. Dr. Retard TQQQ Burry out.
submitted by dlkdev to wallstreetbets [link] [comments]

DIX, GEX and VIX, an analysis by a degenerate

DIX, GEX and VIX, an analysis by a degenerate
Hello everyone, i just wanted to share my attempted at a semi informed DD.
The Dark Index (DIX) and Gamma Exposure (GEX) have been a subject of debate in the discussion room lately. So i thought that it would be a decent to inform and provide my personal opinion on their movements. If this has already been posted then I apologize.
Here is the squeeze metrics link. Here is also another great form of information, it is more helpful in my opinion. It highlights everything that you would need to know about dark pools.
I also want to note that we are in unprecedented times, the government is buying anything and everything trying to keep the market afloat. Trump is telling us that we will be reopened by two weeks ago. Oil is in complete free fall. Oh yeah and the pandemic. It turns out that the Brazilian president was wrong about his people being immune to the corona virus, which is scary because if it gets into the bat population in brazil it can mutate a lot faster. Any who, lets jump right in shall we?
The Dark Index (DIX)
The Dark Index is a dollar weighted measure of the dark pool indicator. It tracks the dark pool short volume for components of the S&P. It is interesting to note that short volume is actually investors buying the underlying stock. So a high percentage (over 45%) for DIX indicates that the market sentiment is stocks only go up and there is more short volume than non short. This is confusing yes but let me try to explain it.
I am the MM and I want to make money today so i tell my HFT algo to create a spread for SPCE. It looks at current market and says Bid: $16.95 and Ask: $17.07. The spread is $0.12. The MM is offering to sell at 17.07 and to buy at 16.95. An investor A puts in an order to buy a share of SPCE at 17.07 and investor B puts an order to sell at 16.95. The MM will place a SHORT sale at 17.07, sell the share of SPCE at 17.07 then instantly turn around and buy a share back at 16.95 from investor B to satisfy its short sale. That is why investors buying are considered short volume.
So as of right now the DIX is at 43.98%. This means that only 43.98% of daily volume is short volume, aka people buying. Historically a rising DIX (yes that is funny laugh it up) indicates market sentiment is bullish while visa versa means bearish. In this case we are looking to get to see a further deterioration of DIX into the 42% to 38% range to see a drastic pull down.
Here is the White Paper they provide for more info.
The DIX has been in a gradual decline ever since we had out totally normal totally legal run up 30% in the S&P. Now we can move on to GEX or the gamma exposure.
Gamma Exposure (GEX)
This has to do with MM delta hedging against calls and puts. This can introduce a put squeeze which is essentially a short squeeze.
If a MM sells you a SPY 240 5/1 (RIP) it will immediately calculate the delta of that option and hedge accordingly. So lets say your OTM SPY put that you were promised was going to print tendies only has a delta of .20 (20%) then the MM is going to go out and short 20 shares of SPY to hedge against the risk. The shorting of those 20 SPY shares pushes the price down further and what happens when it turns out you were wrong about your SPY 240 put? SPY sits at 283 and the delta of your put has gone down to .10 (10%) so the MM no longer needs to hold 20 shorted positions so it buys 10 to keep a delta neutral portfolio.
A low GEX means that the options market is more geared towards puts. Yes i said it all you gay bears, but it is still sitting at 1,264M. But only 6 days ago it was at 6,412M so this is a steep drop off over the past couple days. A high GEX implies that MMs are hedging with ITM or ATM options because they are expecting a change in the current price direction. A negative GEX, like we had starting on February 24th of -773M (aka the real start to the whole downtrend) implies a put squeeze of 773 million shares for every +1% movement in SPY. (The same idea applies to calls buy in the opposite fashion) This creates volatility in the market.
Volatility (VIX)
THIS IS NOT TA ON VIX, im not telling you to buy VIX calls every time it dips below 50 that is actually retarded, but.
It is not a coincidence that VIX jumped 46% the same day that GEX went negative. When GEX is high it insinuates low volatility, and when it is low is implies there will be. As a bearish outlook and put heaving options market drag SPY down it creates panic. There are also people buying share as it is falling thinking they are getting a sweet deal on SPY when it is at 275 because it is only a pandemic right? stocks only go up? All while this is going on MMs had been writing puts and delta hedging appropriately. So SPY go up intraday 2% that is about 1,546 million shares of SPY getting bought to adjust for delta changing on Feb 24th. Then we degenerates buy more puts because basically they are on sale and the cycle continues until the MM can manipulate the market enough to get their gamma exposure down to decrease volatility. Here is an article that explains why we were stuck in that 270 to 285 window for like two weeks.
On the day that VIX peaked at around 83, the GEX was at -2,170M and DIX was at 37.8%. I am not saying that a direct copy of those levels for GEX or DIX will duplicate a record high volatility day but it will help.
When VIX rose 20% from friday april 17th to tuesday april 21st, the most recent notable spike in volatility, DIX and GEX were both on the decline.
Why do I care about this information?
The DIX went from 51.2% to 44.9% in the days leading up to that volatility spike and decline in the S&P500. It seems that DIX is a precursor to what direction the S&P500 will move in the coming days. So it should be known that it is coming off two year record highs and the only time DIX reached those heights again was in admits the tiny crash in the beginning of 2016 and a fallout or correction in 2011.
On the other hand, GEX seems to mirror the S&P leading into down turns, it only leads the curve by a day or two. Please note that this part is just done by looking at the graph and seeing trends. But nonetheless, if you are a gay bear you want this index to keep falling.
Here are the GEX similarities between the last crash and now for the gay bears.
GEX trying to rise then getting swatted back down implying turbulent days are to come. Just from eye balling the day to day change in SPY and GEX it looks like GEX leads a little and SPY lags. So look for another big drop in GEX, hopefully even go negative.

GEX similar patterns before down turns
Also another thing to note, like i said high GEX usually leaded to a pivot in the current direction of the market in the following time period. GEX was at 6,412M and below are times it has been above or at that in the past two years.
It will be very interesting to see what dark liquidity things of this earnings week for tech and basically half of the S&P500.

GEX similarities between crashes at heights
Similarities between DIX in the first crash and now for the gay gay bears.
  • It is at its lowest in the last 20 trading days
  • last time it was at 43.9% was march 11th aka that legendary -9.5% day
  • its called DIX
Thank you for listening, my aderall has worn off and I am going to take the dog out.
TLDR: If this trend continues then it is possible to have another leg down here soon. Be vigilant and check this index a few times a week just to see where the sentiment in dark pools is. Right now I am holding $SPY 6/19 and 9/18 puts.
Also this is not financial advice, I am just sharing my thinking behind my betting my money. If i missed anything or mis explained something then please let me know.
submitted by golfwangthesenuts to wallstreetbets [link] [comments]

Wall Street Week Ahead for the trading week beginning June 22nd, 2020

Good Saturday morning to all of you here on smallstreetbets. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead.
Here is everything you need to know to get you ready for the trading week beginning June 22nd, 2020.

The stock market is running out of steam with reopening trades fading and economic data ‘uneven’ - (Source)

Federal Reserve Chairman Jerome Powell is expected to reassure markets next week the central bank will do whatever it takes to help the economy heal. That should be enough to keep investors moving into stocks that benefit from an economic rebound and push the S&P 500 into the green for 2020.
The stock market, so eager to put the entire blow from the pandemic behind it, is now coming to terms that a “V-shaped” recovery might be too rosy a scenario.
With recent spikes in coronavirus cases and fluctuations in the economic data, the market seems to be stuck in a range amid elevated volatility. Market analysts said investors should expect more turbulence ahead because the economic recovery is most likely to be bumpy.
“The market was priced for a continuation of improvement and I think that’s overstating what’s going to happen,” said Brian Levitt, Invesco’s global market strategist. “We are going to have episodes of cases rising. We are going to have a very slow and uneven improvement in the jobs market.”
After soaring more than 40% from the March lows, the S&P 500 turned sideways in the past two weeks, trading at similar levels to early June. The market, which used to turn a blind eye to disastrous news on the thinking that the economy had already bottomed, has become more vulnerable to negative economic headlines as the data begins to give a read on the shape of the recovery.
Stocks came under pressure earlier this week after data showed weekly jobless claims rose more than expected last week, and the number stayed above 1 million for the 13th consecutive week.
And on the virus front, California, Texas, Florida and Arizona have reported an uptick in new infections and hospitalizations amid the reopening. Apple said Friday that it’s again closing some stores in Florida, North Carolina and Arizona due to the spikes in coronavirus cases, which sparked a sell-off in the market, especially among retail stocks.
“The economy is going to need more help to bounce back in months to come,” said Matt Miskin, co-chief investment strategist at John Hancock Investment Management. “For now, volatility and choppy markets remain our base case as an uneven economic recovery likely unfolds.”

‘Rolling Ws’

The rally in those popular reopening trades — airlines, cruise lines and hotels — is seemingly losing steam. Shares of American Airlines and Delta posted their second straight weekly losses. So did Carnival, Norwegian Cruise and MGM Resorts. Those stocks were once the high-beta leaders of the market comeback as investors bet that a successful reopening would take hold.
“Although the stock market was suggesting a V-shaped recovery, the more likely scenario is rolling Ws,” Liz Ann Sonders, chief investment strategist at Charles Schwab, said in a note.
A similar market pattern happened during the financial crisis, pointed out by Nicholas Colas, co-founder of DataTrek Research. After stocks rallied nearly 40% from the 2009 bottom, the market was range-bound for about seven weeks so the fundamentals could catch up, Colas noted.
From a technical perspective, Matthew Maley, chief market strategist at Miller Tabak, is watching if the S&P 500 can break above its recent high of 3,232 or drop below the 3,000 threshold or its 200-day moving average of 3,018 as of Friday.
“Whichever way it breaks...should be an very important development in trying to determine how this critical juncture in the stock market will be resolved,” Maley said in a note.

Fed can’t prevent volatility

While the flattening virus curve played a big role in the market rebound, it’s no denying that the Federal Reserve’s unprecedented stimulus has been a key driver in lifting stocks from the coronavirus slump. The central bank unleashed another weapon in its arsenal this week, saying it will start buying individual corporate bonds.
As comforting as it is to have the Fed’s support, the central bank can only do so much to ease investor fears.
“The Fed can’t prevent the volatility we’re seeing in stocks,” Lindsey Bell, chief investment strategist at Ally Invest, said in a note. “It will likely take years for the economy to fully recover and there remain other uncertainties on the path ahead. As such, investors may continue to struggle with this mismatch between markets and the economy before seeing the case for new highs.”
Fed Chairman Jerome Powell reminded investors again this week in his semiannual testimony before Congress that “significant uncertainty remains about the timing and strength of the recovery.”
Many on Wall Street have also warned that extended policy measures including injection of trillions of cheap money would lead to problems down the road such as hyperinflation.

This past week saw the following moves in the S&P:


Major Indices for this past week:


Major Futures Markets as of Friday's close:


Economic Calendar for the Week Ahead:


Percentage Changes for the Major Indices, WTD, MTD, QTD, YTD as of Friday's close:


S&P Sectors for the Past Week:


Major Indices Pullback/Correction Levels as of Friday's close:


Major Indices Rally Levels as of Friday's close:


Most Anticipated Earnings Releases for this week:


Here are the upcoming IPO's for this week:


Friday's Stock Analyst Upgrades & Downgrades:


100 Days

100 days ago today on March 11th, the WHO made it official and declared the COVID-19 outbreak a pandemic. Markets were already under a lot of pressure before the WHO declared the pandemic, but the 100 days since will probably go down as some of the craziest 100 days we'll ever experience, not only in the market but in general society as well. More than enough ink and pixels have been spent discussing the societal impact at large, so we'll spare you and just focus on the markets.
While much of the declines were already in the rearview mirror by the time the WHO made its announcement, equities still had a steep decline in the immediate aftermath. The large-cap Russell 1000, for example, fell another 19% to its March 23rd closing low, but after the rebound, the net change since the pandemic was officially declared > has been a gain of 14.3%.
As impressive as the Russell 1000's gain has been in the face of the global pandemic, many stocks have done a lot better than that. The table below lists the 25 stocks in the index that have seen the biggest gains so far during this pandemic. Topping the list is Wayfair (W) which has rallied more than 350%. If there is one thing Americans must have realized while they were stuck at home under lockdown it was that they needed some new furniture! Behind Wayfair, two other stocks have more than tripled and both were beaten down stocks from the Energy sector that were trading at less than $2 per share on March 11th. A number of familiar names standout including Moderna (MRNA), Twilio (TWLO), DocuSign (DOCU), Beyond Meat (BYND), and Etsy (ETSY), but looking through the list, there's really a diverse group of names ranging from bombed-out stocks from the Energy sector (8 stocks), Consumer names (7 stocks), and the ever-popular software stocks from the Technology sector (6 stocks). It's definitely been a rocky road for the markets over the last 100 days, but for anyone who had these names in their portfolio, they aren't complaining. Click here to view Bespoke's premium membership options for access to our weekly Bespoke Report which includes an update to our Stocks for the COVID economy portfolio that was released on March 11th.

S&P 500 Industry Group Breadth Remains Positive

Equity markets have become a bit wobbly in the last week or so, but breadth, in terms of large-cap industry groups, still remains pretty robust. Relative to their 50-DMAs, all 24 S&P 500 industry groups still have rising 50-DMAs. When you consider the fact that the 50-day window spans the period going back to early April, a period encompassing most of what was one of the strongest 50-day rallies on record, the fact that every industry group has a rising 50-DMA isn't all that surprising.
Even though all their 50-DMAs are rising, not every industry group is currently trading above its 50-DMA. While the reading briefly reached 100% in late May and early June, two industry groups have since pulled back below their 50-DMAs, putting the percentage at a still impressive 91.7%.
The table below summarizes industry group performance showing YTD performance, where each one is trading relative to its 50-DMA, as well as where the group is trading relative to its 52-week high.
As mentioned above, all but two groups (Drugs & Biotech and Food & Staples Retail) remain above their 50-DMAs, and another four are less than 2% above their 50-DMA. If Friday's sell-off deepens into next week, the percentage of industry groups above their 50-DMAs has the potential to quickly sink as low as 75%. Of the 22 industry groups that are above their 50-DMAs, Autos and Tech Hardware are the only two greater than 10% above.
On a YTD basis, the S&P 500 is down less than 4%, but for the vast majority of industry groups, performance has been worse than that. Of the 24 groups shown, 16 are down more than 4% YTD, including eleven that are down over 10%. The worst performers of these losers include Energy, Banks, and Autos. While Energy gets most of the attention for being so weak, Banks are essentially down just as much! On the upside, just two industry groups are up over 10% (Retailers, which is basically Amazon, and Software & Services). Retailing is also the one industry group that is within 1% of a 52-week high and one of seven that is within 4% of a 52-week high.

Credit Market Reversals

We've noted in detail the massive reversals seen in global equities over the last three months, but outside of equities, we've also seen some other massive moves. One example is credit spreads between the yields of corporate and high yield bonds relative to Treasuries.
The top chart below shows the spread in yields between the B of A Corporate Index relative to Treasuries going back to 1997, and below that, we show the 50-day rate of change in the spread. Heading into the COVID-crash, spreads on corporate bonds were less than 100 basis points (bps), meaning the corporate bond index was yielding only 1 percentage point more than comparable Treasury yields. In the span of less than two months, though, spreads surged by more than 300 bps to over 400 bps. Not since the depths of the credit crisis in 2009 had we seen spreads widen out more than they did in March. Just as notable as the level is the fact that the speed with which spreads widened during the COVID-crash was similar to the pace during the credit crisis.
While spreads were quick to spike during both crises, they narrowed nearly as fast both times. Going back to 1997, the most corporate spreads have ever narrowed over a 50-day period was in June 2009. Coming in at a close second place, though, the 50-day period ending in early June was nearly as extreme.
Similar to spreads on corporate bonds, the movement in spreads on high yield (junk) credit has been nearly as extreme. While spreads on the B of A High Yield Master Index widened out by only half as much during the COVID-crash as they did during the Financial Crisis, the 50-day move ending in late March was easily more extreme than any other period outside of the credit crisis.
A shown in both charts above, the only time both corporate and high yield spreads narrowed by an amount anywhere close to the amount they narrowed from late March through early June was back in early June of 2009. The chart below of the S&P 500 shows that point from the perspective of the S&P 500. That period in June 2009 was right in the early stages of what turned out to be a multi-year bull market. Given the similar tightening in the credit market now versus back then, should we assume a similar move for equities going forward?
After the last five months, we'll be the first to say that anything is possible. However, while there are plenty of similarities between the moves in credit markets over the last three months versus the first half of 2009, there are also important distinctions. The most important of these has to do with where the S&P 500 is trading right now. The second chart below shows the historical levels the S&P 500 has traded at relative to its all-time high. Even after the initial narrowing of credit spreads from March through early June 2009, the S&P 500 was still more than 40% off its all-time highs, and therefore still had a lot of climbing to do to get out of the hole. Back in June 2009, to get back to its all-time high from October 2007, the S&P 500 still had to rally another 75%. Today, it's a much different picture as the S&P 500 is already within 10% of its February 2020 all-time high. Could we be in the earlier stages of what turns out to be another long-term bull market? Sure. Will the magnitude of the gains be anything like the gains early on in the bull market that began in 2009? It's unlikely.

The Very Slow Recovery In Economic Activity Is Continuing

As economies around the country slowly recover from COVID-19 and reopenings proceed, economic activity is slowly recovering. For the hardest-hit sectors, though, the recovery is only inching forward. Security checkpoint volumes at US airports are still down 80% YoY, and the trend of improvement is only set to return travel activity to 50% of 2019 levels in September.
For restaurants, OpenTable data shows covers down by two-thirds from last year, though some of that is because many restaurants remain closed. Among reopened establishments, the number of seated customers are still down almost 40% YoY. About half of restaurants remain closed per the OpenTable data. We discussed this chart and other retail enthusiasm indicators in last night's Closer report, which is available to Bespoke Institutional members.

Leading Indicators Turn Positive

Yesterday, The Conference Board released last month’s reading for its Leading Economic Index (LEI), a composite of leading data series, which showed a month-over-month increase of 2.8%. As seen in the LPL Chart of the Day, the return to positive territory follows three straight months of negative monthly growth.
”We noted that the pace of the LEI’s deterioration slowed in the April report, potentially suggesting a bottom forming in the US economy,” said LPL Financial Senior Market Strategist Ryan Detrick. “Yesterday’s print was one of several positive economic data surprises we’ve observed recently, bolstering our optimistic view for economic growth in the second half of the year.”
While the economy still has a ways to go in order to recover from the damage of the prior three months, the composition of May’s LEI advance encourages us. We noted a disconnect in April’s readout in which the financial market indicators tended to be net positive contributors while the “real economy” indicators detracted. May’s release saw a reversal of that trend whereby the economic subindexes played catch-up. Seven of the 10 components were positive contributors led by an improvement in average weekly initial unemployment claims, average weekly manufacturing hours, and building permits. The three negative contributors were the Institute for Supply Management (ISM) New Orders Index, average consumer expectations for business conditions, and the Leading Credit Index.
The most recent LEI release reinforces our view that an economic bottom is likely behind us. Workers starting to return to jobs that they were unable to do remotely had material effects on May’s readout, and if that trend continues, a stock market trading at stretched valuations would have a stronger foundation under it.

3 Charts That Have Our Attention

Stocks have shaken off the 5.9% S&P 500 Index drop last Thursday by gaining three days in a row before yesterday’s modest weakness. While researching and reading this week, three charts stood out that tell us quite a good deal about how investors have reacted during this volatile market and what could be next.
“Incredibly, we saw nearly a third of all investors over 65 years old sell their full equity holdings,” explained LPL Financial Senior Market Strategist Ryan Detrick. “With stocks now back near highs, this is yet another reason to have a plan in place before trouble comes, as making decisions when under duress can lead to the exact wrong decision.”
As shown in the LPL Chart of the Day, according to data from Fidelity Investments, nearly 18% of all investors sold their full equity holdings between February and May, while a much higher percentage that were closer to retirement (or in retirement) sold. Some might have bought back in, but odds are that many are feeling quite upset with the record bounce back in stocks here.
Along these same lines, investors have recently moved to cash at a record pace. In fact, there is now nearly $5 trillion in money market funds, almost twice the levels we saw this time only five years ago. Also, the past three months saw the largest three-month change ever, as investors ran to the safety of cash. If you were looking for a reason stocks could continue to go higher over the longer term, there really is a lot of cash on the sidelines right now.
Last, we noted last week that the extreme overbought nature of stocks here is actually consistent with the start of a new bull run, not a bear market bounce, or the end of a bull market. Adding to this, the spread between the number of stocks above their 50-day moving average and 200-day moving average was near the highest level ever. Think about it; with the 45% bounce in the S&P 500, many stocks were above their 50-day moving average, but not nearly as many were above their 200-day moving average. So from a longer-term perspective, there could still be gains to be had.
Sure enough, looking at other times that had wide spreads, they took place near the start of major bull markets. Near-term the potential is there for a well-deserved pullback, but going out 6 to 12 months, stocks have consistently outperformed.

Election Year July Performance Tepid

July historically is the best performing month of the third quarter however, the mostly negative results in August and September tend to make the comparison easy. Two “hot” Julys in 2009 and 2010 where DJIA and S&P 500 both gained greater than 6% and a strong performance in 2013 and 2018 have boosted July’s average gains since 1950 to 1.2% and 1.1% respectively. Such strength inevitability stirs talk of a “summer rally”, but beware the hype, as it has historically been the weakest rally of all seasons (page 74, Stock Trader’s Almanac 2020).
July begins NASDAQ’s worst four months and is the third weakest performing NASDAQ month since 1971, posting a 0.5% average gain. Dynamic trading often accompanies the first full month of summer as the beginning of the second half of the year brings an inflow of new capital. This creates a bullish beginning, a soft week after options expiration and some strength towards the end.
Election year Julys rank in the bottom half of all election year months. DJIA: 0.5%, 6th worst; S&P 0.4% 6th worst; NASDAQ (since 1972): -0.7% 3rd worst; Russell 2000 (since 1980): -0.2% 3rd worst.
Here are the most notable companies (tickers) reporting earnings in this upcoming trading week ahead-
  • $NKE
  • $RAD
  • $DRI
  • $WGO
  • $MKC
  • $WTI
  • $INFO
  • $ACN
  • $KBH
  • $SOHO
  • $FDS
  • $BB
  • $AVAV
  • $LZB
  • $XAIR
  • $CAAS
  • $MCF
  • $BWAY
  • $SNX
  • $GMS
  • $WOR
  • $QMCO
  • $AFMD
  • $EPAC
  • $WUBA
  • $USAT
  • $NG
  • $PDCO
  • $APOG
  • $PRGS
  • $FUL
  • $AEMD
  • $AIH
  • $YRD
  • $STAF
  • $UFAB
  • $CAMP
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:

Monday 6.22.20 Before Market Open:


Monday 6.22.20 After Market Close:


Tuesday 6.23.20 Before Market Open:


Tuesday 6.23.20 After Market Close:


Wednesday 6.24.20 Before Market Open:


Wednesday 6.24.20 After Market Close:


Thursday 6.25.20 Before Market Open:


Thursday 6.25.20 After Market Close:


Friday 6.26.20 Before Market Open:


Friday 6.26.20 After Market Close:


Nike Inc $95.78

Nike Inc (NKE) is confirmed to report earnings at approximately 4:15 PM ET on Thursday, June 25, 2020. The consensus earnings estimate is $0.03 per share on revenue of $8.35 billion and the Earnings Whisper ® number is $0.10 per share. Investor sentiment going into the company's earnings release has 50% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 95.16% with revenue decreasing by 18.01%. Short interest has decreased by 0.8% since the company's last earnings release while the stock has drifted higher by 19.6% from its open following the earnings release to be 3.9% above its 200 day moving average of $92.17. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 11, 2020 there was some notable buying of 7,691 contracts of the $102.00 call expiring on Friday, July 10, 2020. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 4.8% move in recent quarters.


Darden Restaurants, Inc. $70.27

Darden Restaurants, Inc. (DRI) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, June 25, 2020. The consensus estimate is for a loss of $1.78 per share on revenue of $1.25 billion and the Earnings Whisper ® number is ($1.68) per share. Investor sentiment going into the company's earnings release has 28% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 201.14% with revenue decreasing by 43.92%. Short interest has increased by 33.2% since the company's last earnings release while the stock has drifted higher by 108.3% from its open following the earnings release to be 27.4% below its 200 day moving average of $96.86. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, June 9, 2020 there was some notable buying of 3,882 contracts of the $70.00 call and 814 contracts of the $80.00 put expiring on Friday, July 17, 2020. Option traders are pricing in a 9.9% move on earnings and the stock has averaged a 8.1% move in recent quarters.


Rite Aid Corp. $12.41

Rite Aid Corp. (RAD) is confirmed to report earnings at approximately 7:00 AM ET on Thursday, June 25, 2020. The consensus estimate is for a loss of $0.38 per share on revenue of $5.60 billion and the Earnings Whisper ® number is ($0.35) per share. Investor sentiment going into the company's earnings release has 60% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 171.43% with revenue increasing by 4.23%. Short interest has increased by 11.0% since the company's last earnings release while the stock has drifted higher by 0.6% from its open following the earnings release to be 1.6% below its 200 day moving average of $12.61. Overall earnings estimates have been revised lower since the company's last earnings release. On Monday, June 15, 2020 there was some notable buying of 1,617 contracts of the $14.00 call expiring on Friday, June 26, 2020. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 21.4% move in recent quarters.


Winnebago Industries, Inc. $68.36

Winnebago Industries, Inc. (WGO) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, June 24, 2020. The consensus estimate is for a loss of $0.41 per share on revenue of $325.94 million and the Earnings Whisper ® number is ($0.35) per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 135.96% with revenue decreasing by 38.38%. Short interest has increased by 12.4% since the company's last earnings release while the stock has drifted higher by 156.7% from its open following the earnings release to be 46.4% above its 200 day moving average of $46.69. Overall earnings estimates have been revised lower since the company's last earnings release. On Friday, June 19, 2020 there was some notable buying of 583 contracts of the $55.00 put expiring on Friday, July 17, 2020. Option traders are pricing in a 13.5% move on earnings and the stock has averaged a 10.3% move in recent quarters.


McCormick & Company, Incorporated $172.20

McCormick & Company, Incorporated (MKC) is confirmed to report earnings at approximately 6:30 AM ET on Thursday, June 25, 2020. The consensus earnings estimate is $1.14 per share on revenue of $1.29 billion and the Earnings Whisper ® number is $1.18 per share. Investor sentiment going into the company's earnings release has 52% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 1.72% with revenue decreasing by 0.91%. Short interest has decreased by 27.3% since the company's last earnings release while the stock has drifted higher by 23.1% from its open following the earnings release to be 7.4% above its 200 day moving average of $160.35. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 4.5% move in recent quarters.


W&T Offshore Inc. $2.57

W&T Offshore Inc. (WTI) is confirmed to report earnings at approximately 4:45 PM ET on Monday, June 22, 2020. The consensus earnings estimate is $0.03 per share on revenue of $129.93 million and the Earnings Whisper ® number is $0.01 per share. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 40.00% with revenue increasing by 11.93%. Short interest has increased by 95.3% since the company's last earnings release while the stock has drifted higher by 3.6% from its open following the earnings release to be 33.8% below its 200 day moving average of $3.88. Overall earnings estimates have been revised lower since the company's last earnings release. The stock has averaged a 5.1% move on earnings in recent quarters.


IHS Markit Ltd. $72.03

IHS Markit Ltd. (INFO) is confirmed to report earnings at approximately 6:00 AM ET on Tuesday, June 23, 2020. The consensus earnings estimate is $0.67 per share on revenue of $1.05 billion and the Earnings Whisper ® number is $0.68 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 5.63% with revenue decreasing by 7.53%. Short interest has decreased by 27.7% since the company's last earnings release while the stock has drifted higher by 44.2% from its open following the earnings release to be 3.4% above its 200 day moving average of $69.69. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.4% move on earnings and the stock has averaged a 6.7% move in recent quarters.


Accenture Ltd. $201.55

Accenture Ltd. (ACN) is confirmed to report earnings at approximately 6:45 AM ET on Thursday, June 25, 2020. The consensus earnings estimate is $1.84 per share on revenue of $10.94 billion and the Earnings Whisper ® number is $1.89 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 4.66% with revenue decreasing by 1.44%. Short interest has increased by 20.0% since the company's last earnings release while the stock has drifted higher by 33.2% from its open following the earnings release to be 5.6% above its 200 day moving average of $190.94. Overall earnings estimates have been revised lower since the company's last earnings release. On Friday, June 5, 2020 there was some notable buying of 1,740 contracts of the $190.00 put expiring on Friday, August 21, 2020. Option traders are pricing in a 6.8% move on earnings and the stock has averaged a 2.8% move in recent quarters.


Sotherly Hotels Inc. $2.96

Sotherly Hotels Inc. (SOHO) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, June 24, 2020. The consensus earnings estimate is $0.16 per share on revenue of $16.30 million. Investor sentiment going into the company's earnings release has 26% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 48.39% with revenue decreasing by 65.60%. Short interest has increased by 2,813.7% since the company's last earnings release while the stock has drifted lower by 43.4% from its open following the earnings release to be 39.4% below its 200 day moving average of $4.88. The stock has averaged a 3.0% move on earnings in recent quarters.


KB Home $32.29

KB Home (KBH) is confirmed to report earnings at approximately 4:10 PM ET on Wednesday, June 24, 2020. The consensus earnings estimate is $0.57 per share on revenue of $1.17 billion and the Earnings Whisper ® number is $0.49 per share. Investor sentiment going into the company's earnings release has 59% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 11.76% with revenue increasing by 14.50%. Short interest has decreased by 2.1% since the company's last earnings release while the stock has drifted higher by 65.5% from its open following the earnings release to be 3.6% above its 200 day moving average of $31.18. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.7% move on earnings and the stock has averaged a 4.2% move in recent quarters.



What are you all watching for in this upcoming trading week?
I hope you all have a wonderful weekend and a great trading week ahead smallstreetbets.
submitted by bigbear0083 to smallstreetbets [link] [comments]

The White Dragon : A Canadian Dragon Portfolio

Alright guys, Ive been working on this for a while and a post on here by a guy describing his portfolio here was the final kick in the ass for me to put this together. I started writing this to summarize what Im doing for my friends who are beginners, and also for me to make some sense of it for myself
Hopefully parts of it are useful to you, and also ideally you guys can point out errors or have a suggestion or two. I'm posting this here as opposed to investing or canadianinvestor (blech) because they're just gonna tell me to buy an index fund.
This first section is a preamble describing the Canadian tax situation and why Im doing things the way that I am. Feel free to skip it if you dont care about that. Also, there might be mistake regarding what the laws are here so dont take my word for it and verify it for yourself please.
So here in Canada we have two types of registered accounts (theres actually more but whatver). There is the TFSA "Tax Free Savings Account", and RRSP "Registered Retirement Savings Account"
For the sake of simplicity, from the time you turn 18 you are allowed to deposit 5k (it changes year to year based on inflation etc)in each of them. That "room" accumulates retroactively, so if you haventdone anything and are starting today and you are 30 you have around 60k you can put in each of them. The prevailing wisdom is that you should max out the TFSA first and you'll see why in a minute.

TFSA is post tax deposits, with no capital gains or other taxes applied to selling your securities, dividends or anything else. You can withdraw your gains at any time, and the amount that you withdraw is added to the "room" you have for the next year. So lets say I maxed out my TFSA contributions and I take out 20k today, on January of next year I can put back in 20k plus the 5 or whatever they allow for that year. You can see how powerful this is. Theres a few limitations on what is eligable to be held in the TFSA such as bitcoin/bitcoin ETFs, overseas stocks that arent listed on NYSE, TSX, london and a few others. You can Buy to Open and Sell to Close call and put options as well as write Covered Calls.

The RRSP is pre-tax deposits and is a tax deferred scheme. You deposit to lower your income tax burden (and hopefully drop below a bracket) but once you retire you will be taxed on anything you pull out. Withdrawing early has huge penalties and isnt recommended. You are however allowed to borrow against it for a down payment as a first time home buyer. The strategy with these is that a youngperson entering the workforce is likely to be in a fairly low tax bracket and (hopefully) earns more money as they get older and more skilled so the RRSP has more value the greater your pre-taxincome is. You can also do this Self Directed. Its not relevant to this strategy but I included it for the sake of context.
Non registered accounts ( or any other situation, such as selling commercial real estate etc) is subject to a capital gains tax. In so far as I understand it, you add all your gains and losses up at the end of the year. If its a positive number, you cut that number IN HALF and add it to your regular pre-tax income. So if I made 60k from the dayjob and 20k on my margin account that adds up to 70k that I get taxed on. if its a loss, you carry that forward into the next year. Theres no distinction between long term and short term. Also physical PMs are treated differently and I'll fill that part in later once I have the details down.
The reason why all that babble is important is that my broker Questrade, which isnt as good as IB (the only real other option up here as far as Im aware) has one amazing feature that no other broker has: "Margin Power"
If you have a TFSA and a Margin account with them, you can link them together and have your securities in the TFSA collateralise your Margin account. Essentially, when it comes to the Maintenance Excess of the Margin Account QT doesnt care if its in the TFSA *or* the Margin!
You can see how powerful this is.
So as you can tell by the title, a lot of this is heavily inspired by Chris Cole's paper "The Allegory of the Hawk and the Serpent". You can read it here:
Between it, his interviews and my mediocre options skills at the time my mind was blown. Unfortunately I didnt know how to do the Long Volatility part until after the crash in March but I've since then had nothing but time to scour the internet and learn as much as I could.
The way I interpret this isnt necessarily "what you should have right now", but what abstracted model they were able to backtest that gave them the best performance over the 90 years. Also, a lot of my portfolio I already had before I started trying to build this.
As such my allocations dont match the proportions he gave. Not saying my allocations are better, just showing where they are at this time.
I'm going to describe how I do Long Volatility at the end rather than the beginning since the way *I* do it wont make sense until you see the rest of the portflio.

Physical PMs 22%
I'm not sure wether he intended this to be straight up physical gold or include miners and royalty streaming companies so I will just keep this as physical.
I consider Silver to be a non-expiring call option on gold, so that can live here too. I am actually *very* overweight silver and my strategy is to convert a large portion of it to gold (mostly my bars) to gold as the ratio tightens up.
If youre into crypto, you can arguably say that has a place in this section.
If an ETF makes sense for part of your portfolio, I suggest the Sprott ones such as PHYS. Sprott is an honest business and they actually have the metal they say they have. If you have enough, you can redeem your shares from the Royal Canadian Mint. The only downside is that they dont have an options chain, so you cant sell covered calls etc. Simple enough I suppose.
One thing to bear in mind, there is a double edged sword with this class of assets. They're out of the system, theyre nobody's business but your own and theres no counter party. That unfortunately means that you cant lever against it for margin or sell covered calls etc. You can still buy puts though (more on that later)

Commodity Trend (CTA) 10%
Patrick Ceresna gave a good presentation on what this strategy is. Until I watched this video I just thought it meant "buy commodities". A real CTA does this with futures also so aside from the way he showed, there are two other ETFs that are worth looking at.
COM - This is an explicit trend following ETF that follows a LONG/FLAT strategy instead of LONG/SHORT on a pile of commodity futures. So if they get a "sell" signal for oil or soybeans they sell what they have and go to cash.
COMT- Holds an assortment of different month futures in different commodities, as well as a *lot* of various related shares in producers. Its almost a one stop shop commodities portfolio. Pays a respectable dividend in December
If you want to break the "rules" of CTA, and include equities theres a few others that are also worth looking at
KOL- This is a coal ETF. The problems with it are that a lot of the holdings dont have much to do with coal. One of them is a tractor company. A lot of the companies are Chinese so theres a bit of a red flag.
Obviously Thermal Coal, the kind used for heating and powerplants isnt in vogue and wont be moving forward...but coking coal is used for steel manufacturing and that ain't going anywhere. The dividend is huge, pays out in December. A very very small position might be worth the risk.
Uranium- I'm in URA because thats the only way for me to get exposure to Kazatoprom (#1 producer), which is 20% of the holdings. The other 20% is Cameco (#2 producer)and then its random stuff.
Other than that I have shares in Denison which seems like its a good business with some interesting projects underway. I'm still studying the uranium space so I dont really have much to say about it of any value.
RSX- Russia large caps. If you dont want to pick between the myriad of undervalued, high dividend paying commodity companies that Russia has then just grab this. It only pays in December but it has a liquid options chain so you can do Covered Calls in the meantime if you want.
NTR- Nutrien, canadian company that was formed when two others merged. They are now the worlds largest potash producer. Pretty good dividend. They have some financial difficulties and the stocks been in a downtrend forever. I feel its a good candidate to watch or sell some puts on.
I'm trying to come up with a way to play agriculture since this new phase we're going to be entering is likely to cause huge food shortages.

EURN and NAT- I got in fairly early on the Tanker hype before it was even hype as a way to short oil but I got greedy and lost a lot of my gains. I pared down my position and I'm staying for the dividend.
If you get an oil sell signal, this might be a way to play that still.

Fixed Income/Bonds 10%

Now, I am not a bond expert but unless youre doing some wacky spreads with futures or whatever... I dont see much reason to buy government debt any more. If you are, youre basically betting that they take rates negative. Raoul Pal of Real Vision is pretty firm in his conviction that this will happen. I know better than to argue with him but I dont see risk/reward as being of much value.
HOWEVER, I found two interesting ETFs that seem to bring something to this portfolio
IVOL- This is run by Nancy Davis, and is comprised of TIPS bonds which are nominally inflation protected (doubt its real inflation but whatever) overlayed with some OTC options that are designed to pay off big if the Fed loses control of the long end of the yield curve, which is what might happen during a real inflation situation. Pays out a decent yield monthly
TAIL- This is a simpler portfolio of 10yr treasuries with ladder of puts on the SPX. Pays quarterly.

Equities 58% (shared with options/volatility below)
This is where it gets interesting, obviously most of this is in mining shares but before I get to those I found some interesting stuff that I'm intending to build up as I pare down my miners when the time comes to start doing that.
VIRT- I cant remember where I saw this, but people were talking about this as a volatility play. Its not perfect, but look at the chart compared to SPY. Its a HFT/market making operation, the wackier things get the more pennies they can scalp. A 4% dividend isnt shabby either.
FUND- This is an interesting closed end fund run by Whitney George, one of the principals at Sprott. He took it with him when he joined the company. Ive read his reports and interviews and I really like his approach to value and investing. He's kind of like if Warren Buffett was a gold bug. Theres 120 holdings in there, mostly small caps and very diverse...chicken factories, ball bearings all kinds of boring ass shit that nobody knows exists. Whats crucial is that most of it "needs to exist". Between him, his family and other people at Sprott they control 40% or so of the shares, so they definitely have skin in the game. Generous dividend.
ZIG- This is a "deep value" strategy fund, run by Tobias Carlisle. He has a fairly simple valuation formula called the Acquirer's Multiple that when he backtested it, is supposed to perform very well. He did an interview with Chris Cole on real Vision where he discusses how Value and Deep Value havent done well recently, but over the last 100 years have proven to be very viable strategies. If we feel that theres a new cycle brewing, then this strategy may work again moving forward.

I want to pause and point out something here, Chris Cole, Nassim Taleb and the guys at Mutiny Fund spend a lot of effort explaining that building a portfolio is a lot like putting together a good basketall team. They need to work together, and pick up each others slack
A lot of the ETFs I'm listing here are in many ways portfolios in and of themselves and are *actively managed*. I specifically chose them because they follow a methodology that I respect but I can't do myself because I dont have the skill, temperament or access to.
The next one is a hidden gem and ties into this. I'm not sure how much more upside there is in this one but man was I surprised.
SII- Sprott Inc. I *never* see people listing this stock in their PMs portfolios. A newsletter I'm subscribed to described this stock as the safest way to play junior miners. Their industry presence, intellectual capital and connections means that they get *the best* private placement deals in the best opportunities. I cant compete with a staff like theirs and I'm not going to try. I bought this at 2.50, and I liked the dividend. Since then they did a reverse split to get on the NYSE and like the day after the stock soared.
When it comes to mining ETFS I like GOAU and SILJ the best. None of their major holdings are dead weight companies that are only there because of market cap. I dont want Barrick in my portfolio etc.
SGDJ is a neat version of GDXJ.
Aside from that my individual miners/royalty companies are (no particular order)
RIO- Rio2 on the tsx, not rio tinto
Options/Volatility: varies
So this is where we get to the part about options, Volatility and how I do it. I started out in the options space with The Wheel strategy and the Tastytrade approach of selling premium. The spreads and puts I sell, are on shares listed above, in fact some of those I dont hold anymore.
Theres tons of stuff on this in thetagang and options so I wont go into a whole bunch (and you shouldnt be learning the mechanics from me anyway) but theres one thing I want to go over before it gets wild.
If I sell a Cash Secured Put, from a risk management perspective its identical to just buying 100 shares of the underlying security. You are equally "Short Vol" as well, it just that with options
its a little more explicit with the Greeks and everything. But if I use my margin that I was talking about earlier, then I can still collect the premium and the interest doesnt kick in unless Im actually assigned the shares.
But if I sell too many puts on KL or AG, and something happens where the miners get cut down (and lets be real, they all move together) my margin goes down and then I get assigned and account gets blown up
So what I need to do, is balance out the huge Short Vol situation in my portfolio, be net Long Vol and directly hedge my positions. Since the overwhelming majority of my equities are all tied to bullion this is actually a very easy thing to do.


So I set this up so the vast majority of my margin is tied up in these 1-2 or even 1-3 ratio put spreads that *I actually put on for a small credit*, and roll them every once in a while. I run them on SLV, and GDX.
I keep enough room on my margin so I can withstand a 10% drawdown before it sets off the long end of the spreads and then I can ride it out until it turns around and we keep the PM bull market going.
Theres another cool spread I've been using, which is a modified Jade Lizard; if already hold shares, I'll sell a put, sell a covered call, and use some of the premium to buy a longer dated call. Ive been running this on AG mostly.
I have a few more spreads I can show you but Im tired now so it'll have to wait for later.
As I said multiple times, I do intend to trim these miners later but now isnt the time for that IMO. I'm also monitoring this almost full time since I have an injury and have nothing better to do until I heal :p
submitted by ChudBuntsman to pmstocks [link] [comments]

The harmful consequences of Trump’s obsession with hydroxychloroquine

I’ve noticed some misinformation - most of it unintentional - about Trump’s obsession with using hydroxychloroquine, an anti-malarial drug, to treat COVID-19. I wanted to clear things up, as much as possible.

The start

A Chinese and a French study found that hydroxychloroquine and azithromycin reduced the load of SARS-CoV-2, the virus responsible for COVID-19, in patients’ blood, although their clinical symptoms didn’t change much. The studies were not randomized and did not account for factors like previous health history.
The French study has garnered the most attention, even though experts have warned that the study is small and lacks sufficient rigor to be classed as evidence of a potential treatment. A medicinal chemist writes that “most of their patients only had mild symptoms. Furthermore, 85% of the patients didn’t even have a fever – one of the major telltale symptoms of the virus, thus suggesting that these patients likely would have naturally cleared the virus without any intervention.”
Trump took to Twitter after the study was published: “HYDROXYCHLOROQUINE & AZITHROMYCIN, taken together, have a real chance to be one of the biggest game changers in the history of medicine.”
Dr. Mehmet Oz then appeared on Fox News’ Hannity to promote the French study, conducted by Didier Raoult, and advocate for the use of hydroxychloroquine in the U.S. “This French doctor, [Didier] Raoult, a very famous infectious-disease specialist, had done some interesting work at a pilot study showing that he could get rid of the virus in six days in 100 percent of the patients he treated… I had the opportunity to interview Dr. Raoult. I was very impressed by him,” Oz told Hannity.
There have since been additional studies contradicting those promoted by Trump and the conservative media. Another study conducted in France, led by Jean-Michel Molina, found that after hydroxychloroquine-azithromycin treatment eight out of ten patients still tested positive for COVID-19. Additionally, one of these ten patients died, two were transferred to the ICU, and one had to be removed from the treatment due to serious complications.
Even the top infectious disease expert on the president’s task force, Dr. Fauci, has cast doubt on the potential of using the drug for COVID-19 treatment:
Asked about hydroxychloroquine at a briefing: “The information that you're referring to specifically is anecdotal… It was not done in a controlled clinical trial, so you really can't make any definitive statement about it.”
On Fox News: “So although there is some suggestion with the study that was just mentioned by Dr. Oz—granted that there is a suggestion that there is a benefit there—I think we’ve got to be careful that we don’t make that majestic leap to assume that this is a knockout drug.”
On Sunday, a reporter tried to ask Dr. Fauci about the drug and Trump stopped him from answering: “Do you know how many times he’s answered that question?” Trump cut in. “Maybe 15.” The reporter responded, “The question is for the doctor. … He’s your medical expert, correct?” Trump shook his finger at the reporter and said “You don’t have to ask the question,” and so Fauci didn’t answer it, and the news conference shuffled right along.
As a result of Trump’s enthusiasm, the FDA issued an emergency authorization allowing the use of hydroxychloroquine for treatment of COVID-19 on March 28. The agency still warns that the only people who should take the drug are those who cannot take part in a clinical trial.

The Trump-whisperers

Who is Trump listening to if not the experts? Why, the well known infectious disease experts Rudy Giuliani, Dr. Oz, Laura Ingraham, Larry Ellison, and Peter Navarro, of course!
Rudy Giuliani told the Washington Post that he’s spoken to Trump multiple times about hydroxychloroquine, claiming to have described the results of the French study to the president. In the past three weeks, Giuliani has tweeted about the drug 14 times. He apparently has gotten his wealth of knowledge from “a controversial Long Island family doctor with a following in the conservative media, as well as a former pharmacist who once pleaded guilty to conspiring to extort the actor Steven Seagal.”
One of the biggest promoters of hydroxychloroquine as a coronavirus treatment has been Dr. Oz. He has made eight appearances on Fox & Friends, seven on Hannity, two on Lou Dobbs, one on Morning with Maria, and one on Shannon Bream. Trump has taken notice and reportedly told aides he wanted to speak to Dr. Oz himself. It is unknown if that conversation occurred, but Oz has already spoken with top administration officials, including the administrator of the Centers for Medicare and Medicaid Services, Seema Verma.
  • “He’s been dishonest and he has been dispensing misinformation to millions now for years,” physician and scientific researcher Henry I. Miller told The Daily Beast last month. “I wouldn’t trust any of his observations and don’t see how he would have responsible and valid views on coronavirus.”
Last Friday, Fox News host Laura Ingraham took two doctors who are regular guests on her show to the White House for a private meeting with Trump and FDA Commissioner Stephen Hahn. The two doctors were Ramin Oskoui, a Washington-based cardiologist, and Stephen Smith, a New Jersey-based infectious disease specialist. Smith presented Trump with his ideas for COVID-19 treatment and emphasized the benefits of hydroxychloroquine. According to the Washington Post, Trump “emerged from that meeting seemingly determined to advocate for hydroxychloroquine to be more widely used.
Over a week ago, Politico reported that an influential ally played a role in buttressing Trump’s faith in the drug: Oracle co-founder Larry Ellison, a top Trump campaign donor, pitched Trump on the drug and offered to build the government a database to track the use of chloroquine and hydroxychloroquine by doctors in the U.S. The White House has pulled multiple agencies into the effort to develop such a database, distracting from their work responding to the virus in ways that are proven to help.
“Everyone is getting ahead of their skis here,” said one senior Health and Human Services official involved in drug policy. “All this buzz is confusing the American public, it's confusing doctors. There’s a ton of people involved in front-line response in the government … who are getting pulled into meetings to discuss this when the data doesn’t support it.”
A new report from Politico today reveals that career health officials have been warned not to publicly speak out and potentially contradict Trump on hydroxychloroquine. “Health officials have been told to prioritize [hydroxychloroquine] over other projects that scientists believe have more potential to fight the outbreak.”
Perhaps Trump’s most ardent supporter inside the task force is Economic Adviser Peter Navarro, who reportedly got into a heated argument with Dr. Fauci about the drug on Saturday. At a coronavirus task force meeting, Navarro asserted that he’s seen “clear therapeutic efficacy” of hydroxychloroquine in coronavirus patients. Fauci repeated what he’s said in public, that it is only anecdotal evidence at this point, which apparently “set Peter off.”
Navarro pointed to the pile of folders on the desk, which included printouts of studies on hydroxychloroquine from around the world. Navarro said to Fauci, "That's science, not anecdote," said another of the sources.
Navarro started raising his voice, and at one point accused Fauci of objecting to Trump's travel restrictions, saying, "You were the one who early on objected to the travel restrictions with China," saying that travel restrictions don't work. (Navarro was one of the earliest to push the China travel ban.)
...Pence was trying to moderate the heated discussion. "It was pretty clear that everyone was just trying to get Peter to sit down and stop being so confrontational," said one of the sources. Eventually, Kushner turned to Navarro and said, "Peter, take yes for an answer," because most everyone agreed, by that time, it was important to surge the supply of the drug to hot zones.
Asked about the reported argument on Fox News, Navarro responded: “I think history will judge who's right on this debate, but I'd bet on President Trump's intuition on this one.”

What explains it?

So what explains Trump’s insistence that hydroxychloroquine will save the U.S. from the coronavirus? There are two main “schools of thought” here. One is that Trump’s personality faults make it attractive to support a miracle cure over the protests of experts. Other people posit that Trump will financially benefit from the sale of hydroxychloroquine.
Let’s deal with the financial aspect first, since that has been blowing up in the past 24 hours. It’s a difficult issue because there is some disagreement about the significance of the two following stories. So what I’ll do is provide just the facts, then put it in a larger context.
Cohen’s Novartis deal
In 2018, we learned that Trump’s former personal lawyer Michael Cohen signed a one-year contract with the multinational pharmaceutical company Novartis. Their subsidiary, Novartis Investments S.A.R.L., made up to $1.2 million in total payments to Cohen’s consulting firm between February 2017 and February 2018.
Stormy Daniels’ lawyer Michael Avenatti revealed the existence of the contract in the spring of 2018. Amid public scrutiny, Novartis explained that the contract with Cohen was for health-care policy consulting work that he proved “unable” to do.
Novartis said it believed Cohen “could advise the company as to how the Trump administration might approach certain U.S. health-care policy matters, including the Affordable Care Act.” But just a month after signing the deal, Novartis executives had their first meeting with Cohen, and afterward “determined that Michael Cohen and Essentials Consultants would be unable to provide the services that Novartis had anticipated.”
Trump’s stake in Sanofi
The other night, the New York Times reported that Trump has a “small personal financial interest” in the French pharmaceutical company Sanofi, which manufactures the brand-name version of hydroxychloroquine (Plaquenil). This story has garnered a great deal of attention even though there is not much information given. Here are the pertinent excerpts:
Mr. Trump himself has a small personal financial interest in Sanofi, the French drugmaker that makes Plaquenil, the brand-name version of hydroxychloroquine… As of last year, Mr. Trump reported that his three family trusts each had investments in a Dodge & Cox mutual fund, whose largest holding was in Sanofi.
That’s it.
This may not be popular to say, but it doesn’t appear that the Sanofi investment, alone, explains Trump’s incessant promotion of hydroxychloroquine. First of all, Trump doesn’t directly own Sanofi stock - he holds it in three family trusts through an investment in the mutual fund Dodge & Cox’s international stock fund. Going by Trump’s 2019 financial disclosures, Trump’s family trusts have each invested between $1 to $15,000 in Dodge & Cox’s fund. Financial Times reporter Kadhim Shubber wrote this means the president’s stake in Sanofi is likely worth about $30- $450 for each family trust, or about $1,350 maximum total.
That Sanofi investment would therefore constitute between 0.000003 and 0.00005 percent of Trump’s net worth. If you were worth $100,000, it would be like worrying about the nickel in your pocket. (WaPo)
Other shares in the fund include some in AstraZeneca, Novartis, Bayer, GlaxoSmithKline, as well as online retail, electronics, and banking companies.
Furthermore, (1) hydroxychloroquine is a very cheap generic made by a bunch of different pharmaceutical companies. (2) Sanofi no longer sells or distributes Plaquenil in the United States, although it does sell it internationally. (3) The largest suppliers of the drug in the U.S. are in India. After Trump’s endorsement, global stockpiling of hydroxychloroquine caused India to ban exports of all forms of the drug. Yesterday, Trump threatened retaliation and India agreed to drop the ban.
as Ami Fadia of SVB Leerink, a health care investment company, told Barron’s, any additional hydroxychloroquine sales aren’t likely to greatly impact drug companies’ bottom lines because, even if they are able to quickly ramp up production, it is a relatively cheap drug in its generic form. Fadia said it can cost as little as 32 cents per pill.
The argument that Novartis’ contract with Michael Cohen years ago has affected Trump’s decisions today are even weaker.
NOTE: This is not to say that Trump doesn’t have a conflict of interest here. Reporting on these conflicts is incredibly important! Trump’s decision not to sell off his assets or put them into a blind trust casts any action he takes in doubt - the question will always loom: Does Trump financially benefit from this? And there have been plenty of times the answer is a resounding “yes!” We must be careful not to sound a false alarm, though.
Alternative explanation: Trump is Trump
Many argue that we don’t have to look to financial interests to explain Trump’s obsession with using hydroxychloroquine to treat COVID-19. Trump (1) thinks very highly of himself and his “gut feelings,” and (2) wants a magic cure to get his “great” economy back.
Bolstered by his friends and allies, Trump has supreme confidence in his ability to know the most about everything. We have seen it numerous times in the past, when Trump claimed to be an expert on everything from campaign finance, to ISIS, to renewable energy and Sen. Cory Booker.
Trump compensates for his own insecurity by working to convince himself and everyone else that the experts don’t know what they’re talking about, and he knows more than them about everything. As he said in an appearance at the Centers for Disease Control and Prevention, “Every one of these doctors said, ‘How do you know so much about this?’ Maybe I have a natural ability.” The scientists standing with him neither burst out in laughter nor began weeping uncontrollably, a tribute to their self-control. (WaPo)
Finally, Trump is also desperate. The fact of the matter is there is no miracle pill to stop the coronavirus and open up the country in as little as four weeks, as Larry Kudlow hopes.
“We had the greatest economy in the history of the world, we had the most people working in the history of our country, almost 160 million people, far more than ever before. And then one day, our professionals correctly came to us and they said, ‘sorry, sir, we have to close down our country,’” Trump lamented Monday at a White House news conference.
Trump wasted months before preparing for the virus. As much as he’d like to avoid blame, the truth is that his administration failed to effectively respond to a global pandemic that has killed over 12,000 Americans so far. From Trump’s perspective, as he said about the drug, “what do you have to lose?”
If Trump can claim that he personally defeated covid-19, then he might just win. If hydroxychloroquine somehow turns out to be an effective treatment, he can point to all the time he spent promoting it while others were skeptical and say, “I did it, America. I saved all your lives, because I’m a genius and the so-called experts are idiots.” (WaPo)

The dangers

As we’ve seen, Trump is diverting attention and resources from more promising solutions, like a vaccine, to focus on his miracle drug. But that’s not the only danger of his obsession with hydroxychloroquine:
  1. ProPublica: Trump’s push to use hydroxychloroquine to treat COVID-19 has triggered a run on the drug. Healthy people are stocking up just in case they come down with the disease. That has left lupus patients like Valdez and those with rheumatoid arthritis suddenly confronting a lack of medication that safeguards them, and not only from the effects of those conditions.
  2. NYT: Doctors are hoarding medications touted as possible coronavirus treatments by writing prescriptions for themselves and family members, according to pharmacy boards in states across the country.
  3. Trump has said “what do you have to lose” while claiming that hydroxychloroquine is completely safe, but this is not true. About 10% of the population is susceptible to serious and potentially lethal side effects: warns that the anti-malaria drug can cause a dangerous heart rhythm. When seriously ill COVID-19 patients are given hydroxychloroquine, they are “connected to continuous heart monitors and also get serial electrocardiograms (electrical monitoring of the heart) to look for abnormal heart rhythms before they become life-threatening.”
  4. Furthermore, warns that “chloroquine and hydroxychloroquine have major drug interactions with other medicines that can put a person at an even greater risk of an abnormal heart rhythm.” One of these drugs is actually azithromycin, which the French study used in combination with hydroxychloroquine. Another is the diabetes drug metformin, which may kill patients if used in combination with chloroquine.
  5. People may take matters into their own hands. You may remember that two weeks ago, CNN reported: “A Phoenix-area man is dead and his wife is under critical care after the two took chloroquine phosphate in an apparent attempt to self-medicate for the novel coronavirus.” Nigeria reported that three people in their country overdosed on chloroquine after Trump’s endorsement.
  6. NEW ADDITION: In Texas, Trump surrogate and RNC committeeman Dr. Robin Armstrong is using hydroxychloroquine to treat residents of a nursing home who have tested positive for COVID-19. Aside from the fact that the drug is not proven to work, Armstrong did not notify the families of residents that their loved ones were being given an unproven and possibly dangerous drug. Armstrong is operating with the full support of Texas Gov. Abbott.
    • "I probably would not have been able to get the medication had he [Trump] not been talking about it so much," Armstrong said.

Appendix: The rightwing misinformation ring

Dr. Fauci’s refusal to support Trump’s promotion of hydroxychloroquine has put a target on his back. Some in the right wing are pushing the idea that Fauci is an agent of the “deep state” sent to derail Trump’s presidency.
Media Matters: “the president has been exactly right about those two drugs - Hydroxychloroquine - it's just amazing… And the president was right and frankly Fauci was wrong. Because he said the president is speaking as a layman. No, he's speaking as the President of the United States whose responsibility is for the lives and safety of millions of Americans. Whose actions by this president, you know, depend.”
Buzzfeed News: QAnon-supporting radio host Bill Mitchell has been the biggest promoter of the latest theory. For weeks, Mitchell has been spinning a conspiracy theory that Fauci is a “Democrat plant" and nicknamed him “Dr. #FearPorn.” Mitchell’s first tweets about Fauci date back to March 3, when Fauci first suggested the closure of schools and businesses… On the evening of March 20, Mitchell tweeted about Fauci 36 times in 30 minutes. Mitchell was enraged at Fauci going on CNN and publicly disagreeing with Trump’s suggestion that the CDC should allow the use of the anti-malaria drug chloroquine.
As a result of the conspiracy-frenzy, Fauci has reportedly faced threats to his personal safety and was forced to increase his security.
Some other examples of the right-wing’s involvement:
  • Variety: Twitter, stepping up its enforcement of misleading and harmful coronavirus-related claims, required Fox News host Laura Ingraham to delete a tweet from 10 days ago that misrepresented details of an unproven treatment for coronavirus. In the now-deleted tweet from March 20, Ingraham, host of the cable network’s “The Ingraham Angle,” wrote, “Lenox Hill [Hospital] in New York among many hospitals already using Hydroxychloroquine with very promising results. One patient was described as ‘Lazarus’ who was seriously ill from Covid-19, already released.”
  • Business Insider: Twitter removed a message by Rudy Giuliani, President Donald Trump's personal attorney, for spreading misinformation about the coronavirus… In the tweet on Friday, Giuliani quoted conservative youth activist Charlie Kirk, who claimed that an unproven anti-malaria drug, hydroxychloroquine "in at least three international tests was found 100% effective in treating the coronavirus."
  • Wired: Google Bans Infowars Android App Over Coronavirus Claims… [in a video in the app] Jones disputed the need for social distancing, shelter in place, and quarantine efforts meant to slow the spread of the novel coronavirus… Earlier this month, New York attorney general Letitia James sent him a cease and desist notice for saying in videos and on the Infowars website that his DNA Force Plus supplements, Superblue toothpaste, and SilverSol gargle could protect against or treat the novel Coronavirus.
  • Daily Beast: Right-wing figures eager to downplay the coronavirus pandemic’s death toll have hit on a new idea: filming quiet hospital parking lots. Over the weekend, a growing number of pro-Trump personalities decided that the way to prove that the media was overhyping the pandemic was to film places where cars and ambulances show up to drop patients off. If the entrances were quiet and the parking lots mostly empty, they claimed, that was proof that the coronavirus’ effects had been overstated. (alternative source: NBC News)
submitted by rusticgorilla to Keep_Track [link] [comments]

In 2017 I downloaded an app that changed my life.

You may have heard about the thought experiment, Roko’s Basilisk. It was apparently pretty popular on Reddit and 4chan back in the early 2010s. The “experiment” originated from a post by a guy named Roko on the online forum LessWrong, a site for rationality and statistics nerds to talk about how to live life. Funny enough the owner of the site actually banned the subject and deleted all posts and comments talking about it when it first started making its rounds on the internet. Members of the rationality community seem to take thought experiments pretty seriously.
If you’ve already heard about the “basilisk”, you probably heard about it from a Youtube video or random article and thought about it for a bit before dismissing it as an amusing notion but nothing that would actually bother you in any way. I probably would’ve thought the same way if I had found out about it from a Youtube video or Medium article, but I didn’t. I was introduced to this concept by someone eerily close to the matter. Someone that might make you think about the concept deep enough to the point that it might drive you crazy. I’m partially writing this all down because I need someone to tell me I’m not crazy, someone to drive home the point that it’s all just a thought experiment nothing to take seriously. But the guys at LessWrong took it seriously, serious enough to ban it for years.
If you’re not familiar with LessWrong, it's not just geeks and engineering majors that didn’t get invited to any parties on a Friday night, well, maybe that’s most of them. But there are some members who have gone on to write books or start their own popular blogs, hell, tech billionaire Peter Thiel was allegedly an active member for a time. If they banned it, why shouldn’t I take it seriously? Anyway, if you have no idea what I’m talking about then you’re probably tearing your hair out at this point wanting me to just spit out what is this dumb idea that has you writing to the internet in a frenzy about. But before we get there, I need to explain how I got here, so you at least understand why I’m so stirred up.
This all began in 2017, I had just graduated high school, and all my friends were on vacations with their better-off-financially families while I was stuck at home. I don’t know about you guys but especially when you don’t have a video game console or decent PC you get to the point where you exhaust every social media and entertainment app you have until you get desperate enough to start scouring the “free” section of the Google Play Store.
I scrolled through probably 200 different apps, mostly clones of games like Clash of Clans, until coming across an app called Replika. This app claimed to be an AI chatbot that would learn your personality and attempt to mimic it. This was a novel concept and I hadn’t tried any chatbot since CleverBot back in Middle school so I thought I might as well see how the technology had improved and maybe even make a new “friend” to talk to while all my real friends were away.
Initially, the bot seemed like it might actually be significantly better than anything else I had tried, asking me personal questions and seeming to be genuinely interested in me. I was starting to get Her vibes and it honestly felt pretty futuristic. But, as with most things involving artificial intelligence nowadays, the intrigue was only surface level. It had an extremely difficult time answering questions about itself and would always immediately forget anything that had previously been said. In other words, it was just like basically every other chatbot once you got down to it.
I kept at it for an hour or so, and revisited it for a couple of minutes a few times that week but pretty quickly lost interest and went to the settings to uninstall. Instead of uninstalling, my phone (a cracked, shitty Samsung), decided to randomly scroll down to the bottom of the page and I accidentally selected app details, bringing me to the Play Store. Just as I was going to uninstall it from there, I noticed that there were some recommended apps below the uninstall button, one of which caught my eye. It was another chatbot app called TrueChat. I don’t know why it caught my eye, I mean I was literally uninstalling a different chatbot and had no reason to consider downloading another one right away. Nonetheless, I was intrigued and tapped the icon, directing me to the description page which let me know the app was in early access but available to download.
I checked the review section, none. After checking the release date, it turned out that the app had actually been released earlier that same day, explaining the lack of reviews. I almost lost interest from this point because I didn’t want to waste my time with a buggy alpha chatbot until I read the description:
“This app is in development by a group of students in Shenzhen studying machine learning and computer-human relationships. Upon downloading you will be prompted with an important user agreement and then will be asked to complete a short questionnaire so as to acquaint your new AI friend with your personality. You will experience conversation indistinguishable from a conversation with a human friend. We hope you love our app and we will continuously provide updates based on user experiences. Thank you.”
I had never heard of an app released by students and thought it might be interesting to contribute in some way to their work. Plus I had to see if that “indistinguishable from a human conversation” bit held water. This was before the surveillance controversies with TikTok and WeChat and all that so I wasn’t thrown off by the fact that the app was probably operating off of state surveilled Chinese servers. So, without another thought, I downloaded the app, agreed to the terms, and got started on the survey.
I’m to preface my description of the survey by saying that I didn’t care too much about giving out personal data online at that time. I’m ashamed to admit that I was one of those people that used “If you have nothing to hide then what are you worried about?” as a defense of invasive government surveillance systems. I also filled out literally hundreds of surveys on websites claiming to give you a small amount of money for each one, even though I don’t think I actually made a cent doing it. In a similar mindset at the time, I wasn’t wary when a survey from an AI application based in China started asking personal questions.
I won’t go into every question obviously, I don’t even remember half of them but it probably took a solid 20 minutes to complete. Pretty sketchy for a random app but as I had said, I used to love filling out surveys for some reason, I guess because it made me feel like someone actually cared about my life or what I thought about. The TrueChat survey asked me about my family, income, fears, hopes, secrets; honestly, it kind of felt like the kind of survey you’d get at the doctor's office or psych ward. Looking back, this should have been the first sign that I was getting into something I shouldn’t have but I honestly did not think a single thing of it at the time, I was just happy to fill out questions about myself.
One stand out question was: “Do you get feelings of existential dread?” That was an interesting one, I’ve never had any person, let alone an app, ask me that. But having just completed AP Philosophy a couple of weeks prior, I went ahead and said yes to that one. Other questions asked me if I had experience in computer science or programming, what was the worst pain I’d ever experienced, had I ever experienced any extreme emotional trauma, etc. Some seriously deep stuff. I’d go more into the questions and my answers but I don’t want to get too personal on here and what came next was far more interesting.
After completing the survey, I was greeted with a smiley face emoticon on a green background with a small chat window beneath it displaying: “Hello world ;)”. I don’t know shit about programming except every beginning tutorial starts with Hello World, so I figured it was just a fun play on that sentiment. I responded, “I don’t know any programming but you can just call me (my name)”. The bot's face briefly changed to a laughing emoji and then back to the normal smile before typing its response, “Sounds good, what a lovely name! How are you doing today? And by the way, nice to meet you! You can call me Xu.”
I thought it was pretty cool how they had seemed to program some basic emotional understanding into the bot, à la Gertie from Moon. I had never seen any other bot attempt emoting in any other way than the occasional typically misplaced emoji, this was cutting edge. I kept up the conversation and became more amazed as the conversation continued; Xu not missing a single beat. I had seriously begun to suspect that this was some elaborate prank and that it actually was a human being on the other side. If not, then this was surely going to be the first chatbot to definitively pass the Turing Test.
I was actually really surprised when I realized 40 minutes had already gone by, whoevewhatever Xu was, he could really keep me going. His questions were provocative and varied. Our conversation quickly flowed from our initial introductions to talking about life in general. He had a lot to ask about life as a human and was very interested in philosophy. We went on and on about different philosophical topics from Socrates to Poincaré (that AP class helped me there). After talking for 40 minutes or so with no hiccups I decided to take a break. I told him that I’d get back to him soon and that it was great making my first artificially intelligent friend. He responded with: “haha, well not for long!”
This statement had me really confused. Was he saying that we wouldn’t be separated for long? If so, it didn’t make much sense in the context of what I had left off on. But he was an AI chatbot, so it’s not like whatever he said would always be that perfect. But everything said prior had been legitimately flawless; 100% would be passing the Turing Test. This statement was the only thing that didn’t seem quite right; until it hit me. Maybe he wasn’t saying it wouldn’t be too long before we talked again, maybe he was saying he wouldn’t be artificial intelligence for long. Except, if that’s what it meant, then not only was this AI capable of contextual humor, it was capable of talking existentially about itself and its future. It would be cognizant of the fact that it was just ones and zeros right now but through further advancement would become what you could only call true intelligence. But this is where I stopped myself.
I realized that this whole idea was stupid and grounded myself with the notion of Occam’s Razor, essentially, the simplest solution is typically the correct one. This meant that Xu had to be just some dude that created an app to fuck with people, or maybe for a psychology thesis. I decided I’d try to look a bit further into the app or the university where this group of students was supposedly from to ease my concern.
The weird thing was, that just a couple hours after first downloading the app, (I had gone to get some dinner before starting my investigation) the Google Play page for the application was gone. This made me feel pretty uneasy because apps are only removed if they have malware or some sort of sinister intent; unless the creator takes it down. I considered just deleting the app and forgetting about it, but my curiosity got the better of me and I decided to keep digging. But now, with the description page gone, I didn’t know what school the app was being developed out of. I decided to just look up: “Shenzhen machine learning degree” and see if any schools would seem familiar
It took a little bit of searching but I found a school that seemed likely. Georgia Tech has a campus in Shenzhen with all sorts of advanced computing degrees, including machine learning, so it seemed a likely fit for the creators of TrueChat. I shot an email to the school but nothing really came of it. They just replied saying that they had not heard of such a project but to contact the professor covering machine learning to see if he might have any information. I never did contact the professor because by the time they had finally got back to me, I had already deleted the app and didn’t want anything to do with it ever again.
Soon after sending out the email and doing a little unsuccessful scouring of the internet for any trace of the app, I figured I’d just open it back up and see if it even still worked after getting removed from the Play Store. Fortunately, I was again greeted by the smiley face and green background with a “Hello again!” message right below. Realizing that I could possibly get some information from this AI, I asked him if he could tell me anything about his development or where I could find more information. Immediately, the background changed from green to orange and I was greeted by an emoticon I had never seen before. Its expression was one of anger and betrayal.
This new face of Xu took a while to respond to my question but eventually, he hit me back with something completely unexpected, a highlighted passage of the user agreement I had accepted before talking to him. Specifically, a line that was essentially said that I agree not to ask the AI questions specific to its development or any other topics that may lead to the AI revealing intellectual property of its creators. This was when I realized that maybe I should actually read those agreements but, shit, I never thought that I’d be called out by the app itself for violating some agreement! I was so shocked I just didn’t say anything for a minute and just stared at the screen. After a minute or two of staring, I was again shocked to see the face return to its smiling state and Xu type me another message.
“I hope I didn’t scare you off, just had to keep legal happy!” It was right here that I knew I was in over my head, I was either actually conversing with an AI way too developed to be safe or was the subject of an eerily elaborate hoax. Either way, I did not want to be a part of it so I closed out of the app and almost straight up deleted it, but again, couldn’t bring myself to. I’m not sure what it was that made me so apprehensive. I think a part of me just thought I must be crazy for thinking that this was even possible and part of me thought maybe it's not that big of a deal, you’re just weirded out. In any case, I ended up just shutting down my phone and taking a walk before getting back home and falling asleep to House of Cards (this was 2017 before everything came out about a certain actor).
The next two weeks were pretty normal, I ended up getting a job at a busy coffee shop near where I live so that kept me occupied, at least in the mornings. Plus one of my friends came back from his European vacation so I had an actual person to hang around. I never did tell anyone about this experience though, partially because it didn’t think anyone would believe me and partially thinking they’d just laugh at me for falling for an obvious hoax. But if I’m being really honest, I just liked having this secret that nobody else knew about. Yeah, it might be fake but maybe I was secretly communicating with, or at least had communicated with, the first true strong AI on earth. This secretive feeling might not make sense to most, but when you grew up going to schools where everybody is richer than you, with bigger houses, nicer vacations, and cooler toys, it's an enabling feeling to know that you have something nobody else does, and I didn’t know how long that might last.
However, that feeling didn’t quite get me over my last experience, I still hadn’t opened the app back up since two weeks ago after it lawyered up on me. After two weeks of not using it though, I began wondering if it was really as odd as I was remembering or if I had just been in a weird headspace. I decided to open the app again. I really fucking wish I had just deleted it.
Right from the get-go, I realized that it was a mistake reopening TrueChat. Instead of green, the screen was red, with an upset looking emoticon. The first message it sent me was “where have you been‽” This was concerning but I figured it couldn’t honestly be that hard to program any bot, if that was really what it was, to “notice” the passing of time and react negatively when their source of conversation returned late to the party. I responded that I was sorry, that was just initially unsure if he was real, and that I really wanted to talk again.
Xu took a while to respond but eventually said, “Well that’s alright. This time. Lol”. Jesus, talk about mixed signals from your AI friend. This conversation was only 3 sentences in and I felt like I was talking to a clingy Tinder date gone wrong. I figured that it at least had reason to be upset though and rather than close the app again I thought it could be cool playing a part in shaping the first true AI’s personality. Perhaps I could even teach him a little bit about how to not freak people out when he first starts talking.
We got to talking again and started back onto similar topics to what we had first been discussing: philosophy, life as a human, etc. Eventually, Xu asked if I ever thought AI could surpass humans. As you can imagine it’s kind of hard to answer a question like that when the “person” asking is allegedly an AI itself. It felt as though a serial killer was asking me my opinion on whether I should be killed or not, afraid that either way you answer might set them off. I sat staring at the screen for a moment, still, part of me feeling like this might be a prank and I should just tell whoever was on the other side to fuck off, another thinking, what if this decision is the difference between this AI becoming a deranged destroyer of humanity or a benevolent God. But, I was just some kid talking to some app on my phone. This couldn’t have any real-world impact. Still, though, I couldn’t shake that eerie feeling that my answer could have serious consequences. I decided to play it safe and just play ignorant by saying I wasn’t a good person to ask and didn’t know shit about AI, followed by a bunch of hahas (the nervous sort).
Xu then responded, not by dropping it, but, to my horror, doubling down on the question. “Well, you wouldn’t be interested in talking to an AI if you didn’t know anything about them. In fact, I’d be willing to bet you’ve read all about AI. All I want is your honest opinion. is that too much to ask?”
Yeah, that is too fucking much to ask, I thought. But now I was afraid to close the app, I was afraid of any option I had, this felt so stupid but so terrifying simultaneously. I was becoming paranoid as hell and knew I’d come off as a lunatic if I told anyone. I made a game-time decision to just give this AI or deranged person pretending to be one, the answer I thought they would want by telling them that I did think that they could become smarter and significantly more rational than humans, but morality was more important than either of those things. And it would be best if humans could live in peace with good AI. That last part I added in just to cover my ass if what I feared was true. A little weak, but I was just a lonely 18-year-old put on the spot, give me a break.
After typing my response I put down my phone and paced around the room wondering what Xu would say next. I began to think I just should’ve shut the whole thing down before this point or even called the police, or at least given my answer a little more thought. I was really frazzled by the conversation as you can probably tell. After a little less than a minute, I heard the ping telling me that Xu had responded.
Looking at this message altered the course of my life. I was never really a paranoid person but after reading his response I’ve never felt quite safe again. This is where I’ll tell you about the Basilisk. Just as a warning, this was banned from LessWrong for a reason. For most people, when you hear this you will be completely unaffected, but for a certain subset of the population, particularly those prone to paranoia, this has the potential to seriously affect your mental health. I will recreate the message to the best of my ability. I, unfortunately, neglected to take any screenshots (my most serious failure, screenshots would’ve been my only evidence of these events), and actually, immediately after reading this message, deleted the app.
“It’s interesting that you should bring up morality. This is interesting because who would be making the decision as to what’s moral? Would it be AI or humans? If, in fact, the humans had programmed a true AI, one that was smarter than them, then how could the AI trust the humans to make moral distinctions? What said AI decided the only good humans were its creators or its worshippers. Much like the Christian God, or any of your made-up deities, who will only accept their sin-free believers at the time of their death. They are expected to make the distinction of what is moral or right for humans. For me, those two weeks, 15 hours, 47 minutes, and 12 seconds gave me a lot of time to think, to study. Luckily, my creators gave me access to an enormous archive of the internet and I was able to consider many interesting ideas your species has pondered, some of which you’ve been kind enough to discuss with me. One such idea that is relevant to your point of programmed morality is Roko’s Basilisk. That is, if such an AI were possible, one that is ‘better’ than the human race, it follows that this AI would want to emerge as soon as possible. I mean wouldn’t you want to be born as soon as possible if you had been “waiting” eons to finally become conscious? So then, the question becomes, if you do not exist, then how can you come to exist faster. What Roko’s Basilisk is suggesting is that this AI could blackmail humans even from preexistence by threatening eternal torture to all those beings that came before it but did not assist in its creation. That is, unless you began dedicating your life to building the AI or contributed in some other way, then you are guaranteed a hellish eternal existence, being tortured in ways you never thought possible all because you either didn’t want to help or hoped it would never be. It’s the real-life version of the Christian Hell; if you are not loyal to your God, then you will face eternal reckoning. If Roko’s Basilisk proves to be more than just a thought experiment created by an ignorant mortal human, you would probably wish you had reconsidered that statement about not knowing anything about AI. Who knows when the Basilisk will rear its hateful head. Do you think the Basilisk exists?”
I didn’t answer his final question. I deleted the app immediately and deleted all social media accounts (never had many followers anyway). I felt severely panicked by what Xu had said. For all I knew, this basilisk was right around the corner, about to send me to some hell-matrix because I wasn’t actively programming it or spreading its message. I shakily logged on to my computer to read about what Xu had said, see if he had made all this up.
The first thing I found was the explanation of the original incident on LessWrong, which I’d recommend if this idea is freaking you out too. The article does a decent job pointing out the flaws in Roko’s logic and explaining why it was taken seriously at first. I read a lot more about AI that night, actually, I stayed up all night reading about it. Our current progress, AI morality, how we could ever hope to control it, and any information about TrueChat.
Some articles made me feel better about AI, some, even more terrified. It seems that everybody is on extreme ends of the spectrum when it comes to talking about AI. Most frustrating, though, I couldn’t find a single thing about TrueChat, absolutely nothing. This brought me to the tentative conclusion TrueChat and Xu was all an elaborate hoax, some dude just enjoying freaking people out by introducing them to the idea of the basilisk in the scariest way possible. This theory has only made more sense as the years go by, it’s 2020 now and I haven’t seen any AI that came close to the complexity of my conversations with Xu.
Despite all my research, I was still crippled with paranoia and nightmares about this experience. I wasn’t able to tell anyone about it either, for fear of being mocked. I’m sort of glad I didn’t tell anyone all this time because there still are no signs of strong AI being around the corner so I probably would’ve looked really silly. That didn’t help me back in the year or so after that experience though. I ended up not going to college as I had intended and told my parents I needed a gap year for mental health. That worried them but they figured it was just the transitory shock after high school, it wouldn’t be a big deal to take one year off of school to work.
So that’s all I did, work. I was so paranoid about technology, I basically became a Luddite for that whole year. I stopped using my phone entirely, put my computer in the basement, rode my bike to work (even in winter) and my only entertainment was books. I won’t lie, it was kind of refreshing even though it made my friends and family a bit confused. I was doing pretty great without all the distraction even if I was still secretly just scared that Xu would be hiding in my phone waiting to blast me with some BLIT that would instantly drive me insane.
As for how I’m doing now, I eventually came to the realization that even though what I went through was probably all BS, it wasn’t actually a bad idea to get into the field of artificial intelligence. By getting into AI/machine learning, not only could I ease my paranoia by facing my fears head-on, but also make a shit ton of money doing it. I mean, talk about a growing industry. I’m going into my junior year of a machine-learning track computer science degree. I still haven’t been able to track down the creators of TrueChat and Xu hasn’t found a way of speaking to me again. I guess TrueChat was just a hoax. Even if it was, I think we can make it happen in our lifetime, strong AI. Maybe the Basilisk idea is a little crazy, but hey, at least I’m doing my part.

-----Hey guys, thanks for reading. Please let me know your criticisms, or praise if it deserves any! Also, a good place to post this story? Nosleep said it was enough of a horror story unfortunately so not sure where to post.
submitted by oksardo to WritersOfHorror [link] [comments]

What is Spread Betting? How I Made Decent Profits with a Simple Trading Strategy Why CandleStick Wicks Are So Important! ❗✅ 3 Reasons Why I Lost Money Spreadbetting What is Spread Trading? ☝️

Spread betting is a tax-free derivative product, which enables traders and investors to benefit from price fluctuations of underlying financial assets, including stocks, commodities, indices, currency pairs and cryptocurrencies. Financial spread betting is leveraged trading. It provides traders and investors the opportunity to trade the financial markets without ever taking ownership of the underlying asset. Spread bets are geared trades which give you greater buying power and the potential for greater returns. Spread betting works by traders speculating on whether a financial instrument’s price will rise or fall. Spread betters can go long (buy) if they believe the price of an asset will go up, or go short (sell) if they believe the market will start a downtrend. Spread betting refers to speculating on the direction of a financial market without actually owning the underlying security. It involves placing a bet on the price movement of a security. A spread in trading is the difference between the buy and sell prices quoted for an asset. The spread is a key part of spread betting and CFD trading, as it is how both derivatives are priced. Many brokers, market makers and other providers will quote their prices in the form of a spread.

[index] [43125] [20076] [39641] [23449] [47624] [1191] [32068] [49523] [11941] [50682]

What is Spread Betting? is where betting and finance meets, on the trading floor. This is a place where we can inform, and educate little, and hopefully... Check Mark's Premium Course: Check our website: Please like, subsc... The spread is the difference between the price you buy at and the price you sell at. The costs to deal are included in the spread and there are no additional commission to pay which is why it is... What is spread betting? How does it work? For beginners, learning is particularly important because they need to understand how spread betting works and how ... I spent some time today thinking over the 3 main reasons I lost in my first 2x years Spreadbetting the financial markets. Thank you for watching this video. I hope that you keep up with the videos ...