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Options traders are bracing for a stock-market crash

marketwatch.com

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Re: Options traders are bracing for a stock-market crash

#31

Post by rchaud »

positr0n wrote: post #26
rchaud wrote: post #17

Earlier quoted context omitted.

In times of economic upheaval/resets, labour does not find bargains, capital does. Housing prices might take a hit, but by the time they pop up on the open market, you won't be buying from a distressed seller, but rather a numbered corporation domiciled in Delaware that's picked up all those properties in cash, cheap.

Who wouldn't sell houses on the open market?

People who need cash asap and can't wait 30 days minimum to pay agents and lawyers and wait for the cheque to clear. A lot of people have medical bills, school loans, credit card debt etc that will take precedence in their decision making .

Plenty of companies are out there offering quiet cash deals, they will find these properties much faster than agents with their paperwork and fees can swoop.

Re: Options traders are bracing for a stock-market crash

#32

Post by dehugger »

s1artibartfast wrote: post #23
maxioatic wrote: post #22

Earlier quoted context omitted.

Usually people save money in a savings account.

Future homeowners don't. I suspect there is a pretty strong correlation between people who invest their money and those who buy houses. It is hard to imagine anyone affording a a mortgage if their savings are rotting away at 5% less than inflation.

Your assertion that future home owners don't is false.

Anecdotal Source: Every single person I know who has bought a house, myself included.

If you wish to counter this source please provide data supporting your claim that all home owners have stock options to liquidate.

Re: Options traders are bracing for a stock-market crash

#33

Post by s1artibartfast »

dehugger wrote: post #32
s1artibartfast wrote: post #23

Earlier quoted context omitted.

Future homeowners don't. I suspect there is a pretty strong correlation between people who invest their money and those who buy houses. It is hard to imagine anyone affording a a mortgage if their savings are rotting away at 5% less than inflation.

Your assertion that future home owners don't is false. Anecdotal Source: Every single person I know who has bought a house, myself included. If you wish to counter this source please provide data supporting your claim that all home owners have stock options to liquidate.

Where are you making this stuff up from? I never used the word options.

You don't know anyone that has sold stock to pay for a down payment?

Re: Options traders are bracing for a stock-market crash

#34

Post by s1artibartfast »

DrillShopper wrote: post #30
SR2Z wrote: post #29

Earlier quoted context omitted.

You understand that most Americans (>60%) own stock, right? You're just patronizing everyone who isn't in Silicon Valley with a statement like this.

">60% of Americans own stock" does not tell the whole story. First, how many Americans only own stock as part of their 401(k) or IRA and can't liquidate it without affecting their retirement? Second, how many Americans own stock portfolios with sufficient value that they could liquidate them and purchase a house for cash, as the initial response implied? I guarantee you it's less than 60%.

How did I imply that?

I'm talking about down payments, paid for by stock sale, 401k, or IRA loans.

Maybe I'm crazy and you're right, but I think most people use these vehicles to save for and fund their house purchase, not a regular savings account.

Re: Options traders are bracing for a stock-market crash

#35

Post by maxioatic »

s1artibartfast wrote: post #28
maxioatic wrote: post #27

Earlier quoted context omitted.

Depends on how soon you are planning to buy. The usual rule of thumb for a big purchase (house, car, etc) is that if you’re planning on it occurring in 3-5 years, put money in a savings account. Otherwise, yeah you should probably invest it.

I agree there is a time and place for it. 5 years is a bit long IMO. The S&P500 is up 250% in the last 5 years, while savings would have netted maybe 10% growth in that time. I imagine some sort of hedge would be appropriate, but have definitely been burnt by taking money out of the market too soon. Im just shocked that some people think stock is some SV alternate reality. I grew up in a rural community before the in…

Yeah agree, I think it's really about personal risk tolerance.

I do agree 5 years is a while, but it's also easy to say that right now based on the last 5 years. It's not terribly difficult to find 5 year periods where returns aren't very good or flat out bad (e.g. starting investing in 2000).

Re: Options traders are bracing for a stock-market crash

#36

Post by immibis »

acuozzo wrote: post #6
tomcar288 wrote: post #4

if everyone's expecting a market crash and prepared for it (that means it should already be priced in), how can there still end up being a crash? seems counter intuitive.

It becomes self-fulfilling, no? Like a bank run started by a rumor. More money flowing away from the market into safe(r) investments than flowing in causes valuations to plummet.

Yes and no. If everyone who expects a crash has sold already, and there wasn't a crash yet, how could it trigger one?

The stock market has been found to behave completely randomly, even when taking into account all available information.

Yes, there was a crash at the beginning of COVID-19, and the market recovered disproportionately to the amount of pandemic-related destruction. There are also many really bad things that happened and did not cause crashes. And there are crashes that happen out of nowhere.

They say that esteemed economists have predicted 92 of the last 5 recessions.

Re: Options traders are bracing for a stock-market crash

#37

Post by acdha »

positr0n wrote: post #26
rchaud wrote: post #17

Earlier quoted context omitted.

In times of economic upheaval/resets, labour does not find bargains, capital does. Housing prices might take a hit, but by the time they pop up on the open market, you won't be buying from a distressed seller, but rather a numbered corporation domiciled in Delaware that's picked up all those properties in cash, cheap.

Who wouldn't sell houses on the open market?

Echoing rchaud’s comment, it takes longer to buy houses if you need to get a mortgage with a serious assessment because banks suddenly rediscover diligence in a down market, and there are always stories about having a deal fall through because the buyer’s loan didn’t get approved. If the property would need work to clean up for showing, people might also figure that they’re not getting so much less if they don’t have to pay a realtor, handyman, or cleanup crew.

If you weren’t old enough or in the right neighborhoods to see it in the last bubble, there were shady companies mailing postcards to every house and plastering neighborhoods with poorer / older people with fliers. They appeared to be looking for people with medical bills, old people who needed money for assisted living, etc. who needed money right now and might be swayed by a quick transaction. I noticed how you could cross into a less affluent neighborhood and suddenly it was like every pole had a “ca$h for ugly homes” sign on it.

Re: Options traders are bracing for a stock-market crash

#38

Post by doubleg72 »

s1artibartfast wrote: post #34
DrillShopper wrote: post #30

Earlier quoted context omitted.

">60% of Americans own stock" does not tell the whole story. First, how many Americans only own stock as part of their 401(k) or IRA and can't liquidate it without affecting their retirement? Second, how many Americans own stock portfolios with sufficient value that they could liquidate them and purchase a house for cash, as the initial response implied? I guarantee you it's less than 60%.

How did I imply that? I'm talking about down payments, paid for by stock sale, 401k, or IRA loans. Maybe I'm crazy and you're right, but I think most people use these vehicles to save for and fund their house purchase, not a regular savings account.

No, retirement accounts are not for saving to buy a house.

Re: Options traders are bracing for a stock-market crash

#40

Post by [deleted] »

s1artibartfast wrote: post #33
dehugger wrote: post #32

Earlier quoted context omitted.

Your assertion that future home owners don't is false. Anecdotal Source: Every single person I know who has bought a house, myself included. If you wish to counter this source please provide data supporting your claim that all home owners have stock options to liquidate.

Where are you making this stuff up from? I never used the word options. You don't know anyone that has sold stock to pay for a down payment?

[deleted]
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