Posted on 10/30/2019 2:04:50 PM PDT by Eleutheria5
You ought to teach this stuff to kids. They can’t even add but do know the value of a $.
I hear ya. Those are largely my feelings as well.
I would say this as a counterpoint. It largely depends upon which underlyings are your preference. Me, I do not trade options very much on the volatility champions of the world, eg; AMZN, GOOG, NFLX, AAPL (though sometimes) I tend to prefer the big NYSE stocks, let’s say stocks in the SP100. MRK, JNJ, TLT, DE, CAT, EWZ etc; It also depends upon whether you like to spread options, and which spreads you like. Debit or credit, or butterflys & condors, etc; Or if you like outrights (eg; just long/short puts/calls) A dozen things depend upon a dozen things. Or if you like selling volatility and/or betting against it; or time decay.
It is said that trading options, you have absolute control over your losses. Well, yeah. But lots of options plays lose 100% or 90% and while OK, that’s “control”...you know the drill.
With outrights, you have to be willing to be down 40-50% and still have faith in your play.
With futures, you have pretty absolute control over your losses and you’re not in these trades for long periods (daytrading, mostly) You have sec 1256 tax treatment. If you want to bet on oil 6 months out, you can spread or buy duration calls/puts pretty cheaply. Or gold. Or soybeans. (or fifty other things)
Futures have a lot of advantages, but yes, you need the strong stomach. I have a terrible time trading the /ES because the thing roils my stomach bad. You can semi-duplicate the action of the /ES using SPY calls/puts (or, trade DIA, the QQQ, or the IWM for the Russell) but duration in those costs crazy money and then you become subject to massive time decay. Nothin’s free, bro.
I find the premise as nonsense.
Why? It presumes more from the Turks than was likely or logical. The Turks were not going to war with the U.S. in Syria over the Kurds. Trump saying no to Erodgan would have meant continuation of the status quo in Northern Syria, not war with Turkey.
That is not an argument pro or con about Trump’s change in policy. It is an argument against the author’s premise about that policy change. We have assets in the region that could simultaneously blunt an Iranian and a Turkish attack. Iran knows it and Erdogan knows it.
It is far fetched to expect actual war with Turkey or Iran, either separately or in concert. Neither of them have a death wish, and Putin is hardly Glenda the Good, but he’s rational. But when contemplating troop repositioning, the first thing you have to assume is that war might break out, and where that would put you. It is a valid and important consideration. Mr. Langfan, I think, is getting carried away with it. But who would have thought 101 years ago that some Serb nationalist would assassinate the crown prince of Austria, and that that would lead to such a terrible, protracted war. Prepare for the worst. Hope for the best.
“But when contemplating troop repositioning, the first thing you have to assume is that war might break out, and where that would put you. “
You have to weigh the validity and strength of the risk of that “might” condition, before acting on it. I think that risk was far too low to use it as an excuse for Trump’s policy change. I think that risk was, frankly, nil.
I think Trump’s general view of not wanting to be involved in Middle East wars, period, together with his feeling we had done all we could vis-a-vis ISIS in Syria, together with his political promises were collectively, as a group, the lone impetus for Trump’s policy change, but no grander strategy than that. I also think the last leg in that group was actually the most important to Trump, with 2020 elections 12 months away.
But then he sets up a garrison around the oil fields. It’s actually an astute move, but also contradictory. So you have to turn back to Langfan’s hypothesis and reframe it. Rather than be caught in a two-front war like Germany did, to no purpose, he takes a page from Art of the Deal, and grabs hold of the only source of leverage in the region, oil. And secures it for American allies and America.
2.29 in Alabama. Gas buddy shows gas cheaper than your claim all over Georgia. So something doesn’t add up. Also who cares. It’s still way cheaper than it was.
We are MORE likely to be caught in two front war over that oil between Turkey and Russia/Syria/Iran than over the Kurds. Before, we already held that oil AND a front between Assad, Erdogan and the Kurds. And that status quo had reached a stasis. We had little extra to do to keep it, and its leverage. Now, fighting will spread in Northern Syria as it did before, in a mutli-friend multi-foe fashion between Assad/Russia/Iran, ISIS again (aided as before by Turkey as Turkey’s surrogates against Assad), the Kurds and now Turkey, and it will spread via any “winners” to the oil fields; which you can bet, when the chips are down, Trump will not deem worth protecting in that malestrom with U.S. lives. In the reality of possible lost American lives your leverage theory will go pffft.
I don’t believe Trump will go crying home to mommy at the first drop of blood. There’s no more certain way to assure endless, pointless warfare than to have America’s enemies believe its President is gun shy. They’ll then attack American troops wherever they’re found, believing this will precipitate more withdrawals. That was Saddam’s strategy after Baghdad fell, and to Bush’s credit, he held firm. If Trump set up shop garrisoning and holding the oil fields, that’s either where he will stand, or he’s incoherent.
He first “abandoned” the Kurds, then brokered a cease fire, then came around the back from Iraq and grabbed the oil fields, and says it’s to keep it out of the hand of the ISIS fighters recently freed, and use it to help US allies, such as the Kurds. Now he’s looking to send in armored support. This is either some sort of elaborate football play, a “Hail Mary” or “Statue of Liberty Pass,” or something, or it makes no sense at all.
“He first “abandoned” the Kurds, then brokered a cease fire, then came around the back from Iraq and grabbed the oil fields”
No, not true. We were already there, at that area in northern Syria holding those oil fields, that we and the Kurds had taken from ISIS, before the agreement with Erdogan. DOD sent some additional troops there on fears the new uncertainty in northern Syria would reinvigorate ISIS. From all I have read it was a DOD decision as leaving the oil fields was not part of the agreement Trump was making with Erodgan - as part of abandoning our protection of the Kurds - but was still in the DOD commitment in the area.
“This is either some sort of elaborate football play, a “Hail Mary” or “Statue of Liberty Pass,” or something, or it makes no sense at all.”
I think it is none of the above. The oil fields are important to Syria, Iraq and Turkey as part of the local oil supplies that can be traded and used among them. I think over time they will be returned to Syrian control once there is Syrian/Russian control in the area that can keep them out of the hands of ISIS.
Right now Syria/Russia have to consolidate the recent agreements vis-a-vis Turkey. That will be followed by growing extended Syrian re-control of northern Syria. Once that is consolidated, I think they will negotiate about a hand off of the oil fields to Syrian state control, expecting Syria/Russia will keep them out of ISIS hands. Then the U.S. will retreat further from the Syrian mess created by Bush/Obama.
So then Russian demands that US troops immediately leave Syria, and then objecting strenuously to the taking of the oil fields that the US already supposedly had control over is mere boob bait for Boris, and really Trump and Putin are...ha ha...colluding? I think we are a few pieces short in a complex puzzle. Langfan takes a guess, you take a different one, I shrug my shoulders and wish Columbo was into foreign policy. Something is afoot, and every day the answer gets more difficult to guess.
One thing is certain, major steps are being taken to completely eliminate the last vestige of ISIS, keeping the oil field out of their hands, killing their leaders, persuading European countries to take charge of the Euro-ISIS prisoners that the Kurds do not want to babysit anymore.
Just wanted to say one more thing about “options”.
Like many things about the market & participating in same, it may seem pretty obvious, but..
A portfolio dominated by options has embedded within it a lot of collective theta decay. I have had situations where I’ve had -700 in daily theta. (right now: -266) That means that EVERY DAY the overall port loses $700. It also means that if you’d like to show a profit on the day, you have to trade for a >$700 profit, which of course can mean that the established positions move in your favor and make money, and perhaps you sell out of them.
How do you have that? Have 25 positions, all options. Mostly just 3 and 5 lots, but maybe you have one or two biggies, 30-50 options. Maybe an underlying makes a big fast move and you are “forced” into action; either by shutting off any further losses OR, capturing nice gains by buying a pile of protective options DITM so as not to buy too much IV.
And of course, you can get into trouble selling options in times of very low volatility. That’s because when the market returns to higher volatility, those sold calls will almost certainly go against you. Selling opts in very low IV is nearly a sure-fire method of trashing yourself and it DEFINITELY includes selling covered calls...which I consider both an elementary AND a complex strategy but otherwise the WORST strategy.
It’s an elementary strategy because it’s almost universally the first strategy a trader uses when transitioning out of “only stocks”. Such a trader may believe they understand CCs pretty well but such a trader almost NEVER understands that selling CCs “as a habit”, as “a play you like”, as a play “you do monthly/weekly” inevitably will create a “sell in times of low vol” and produce tears when the market reverts to higher vol.
Thanks Eleutheria5. The claim is ridiculous on its face. President Trump's reimposition of sanctions prevented war with Iran. Since that time, Iran's resumed its downward spiral.
I thank you for all this advice, but it’s way over my head. But thanks.
No connection...
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