<p>Dstark, is your son iron TV? If not how do we pay attention to him?</p>
<p>*iron should on </p>
<p>I was joking about paying attention to him. </p>
<p>Futures are down 8. This is going to be a volatile week for those of you playing the vix.</p>
<p>I like Peter Thiel’s comments on CNBC. </p>
<p>QE and low interest rates have distorted asset prices. </p>
<p>Time to do some more put spreads. Anybody have any other ideas?</p>
<p>Nine months to go up…1 month to go down. </p>
<p>Bought 10 more contracts today - 10/18 190.5 - 190 put spreads, sold 184.5 - 168 put spreads. I’m pretty well hedged in my other positions down to 10% losses, but I have about 50% in a s&p vanguard fund in 401k plans.</p>
<p>Doct, You can make .50?</p>
<p>I think a real hedge is long puts…short a call spread…</p>
<p>This trade gets you long at 184. Might be what you want. </p>
<p>I see that xiv is now down for the year…</p>
<p>I think I am going to kick myself for not hedging. I will try and not kick myself too hard. </p>
<p>My .50 or $500 trades are not used as a hedge but to generate income as the market is going down and also to reduce my losses. My hedges are things such as: 1/17 spy 143 - 205 call spread, 187 - 168, 162 - 95 put spreads with a breakeven of 188.27. I don’t like to pay for puts - especially since most of the time the market goes up.</p>
<p>Ok…</p>
<p>I am trying to decipher what you wrote. You are long the 143-205 call spread and long the 187-168 put spread and short the 162-95 put spread? </p>
<p>yes</p>
<p>If the market drops some more tomorrow, I may buy some googl call spreads before earnings.</p>
<p>Ok…,…</p>
<p>So…you paid 45.27 for the spreads and the spreads can maximize at 62 for close to a 38 percent return if the market rises to 205 which is around 10 percent from here. (187 on the spy). </p>
<p>The only way you really get hurt is if the market plummets or crashes…low probability events. Right? You are giving up most of your protection on the downside by doing the weekly put spreads, but the market would have to drop much more than normal quickly.</p>
<p>I think I paid 45.31. If the market plunges I can roll out the put spreads until the sun burns out or I must likely would roll them out to the point where I thought that I should get assigned. I’m not getting why you think I’m giving up my downside protection by doing weekly put spreads?</p>
<p>Because you are if we plummet…</p>
<p>You are long the. 187-168 put spread for protection … Below 184.5… You are short puts so you are giving up protection below 184.5. If you roll… You will still be short some puts that cut the protection…</p>
<p>You are only going to get hit if there is a quick big drop to the downside. That can happen. </p>
<p>the expirations are completely different. I don’t care what happens until I get close to 1/17/15 in my hedged positions. I will roll out the weekly if we get hit even crushed. I may buy some more puts that expire next year. If I think the market is really going to tank which I don’t believe, I may not buy put spreads but puts. Right now I don’t expect more than 10%. The fears in the market are nonsense - ebola - really??, the end of qe - give me a break.</p>
<p>I’ll have to figure the details of what I’m going to do later. Right now, I’m more interested in SI’s hotclicks 
</p>
<p>I think the end of qe being an issue is real. Ebola… Not so much. :)</p>
<p>I have no clue where we are going . </p>
<p>SI Hotclicks. :)</p>
<p>One of the most remarkable things about this awful couple of weeks is that we are not even in official “correction” mode yet. I agree that unless you are invested in Africa ebola is a nonevent except for psychological reasons. But given the whole qe thing and interest rates still essentially at zero, I continue to believe that we are in truly uncharted territory where anything can happen. Frankly, I think something really bad is more likely than something really good.</p>
<p>As a holder of xiv, I am obviously not very happy with the course of events. But I still think the right thing to do is stay the course and follow the plan, which I still believe in. It will turn around eventually (although that doesn’t guarantee that I won’t ultimately be a net loser).</p>
<p>If nothing else, the precipitous drop proves the wisdom of not being greedy with an instrument like this–you need to systematically take some profits on the way up to offset the damage attendant to the inevitable vix spikes.</p>