101–110 of 352 posts
The problem with these kinds of bets is the Fed Put. That's the invisible force levitating stocks. I don't really see that changing unless/until the country genuinely enters a debt or currency crisis. The path is unsustainable, but they'll keep it going as long as they possibly can.
Does anyone else remember the conspiracy theories around the "plunge protection team"?
Earlier quoted context omitted.
Yeah I feel like 200m of PLTR put options would distort the market so much the contracts would struggle to overcome their own premium. They must be referring the the value of the shares the contracts represent?
On a single contract, maybe, but remember that the counterparty is usually a market maker who doesn't take directional risk, their game is to bet that the cost of delta hedging is less than the premium they collect, and that's more of an implied vs realized volatility thing than a directional thing. Even if we took it for granted that Michael Burry was smart money, to a first order approximation the dealers don't car…
There is enough bullish momentum that a trade of this size can actually be placed (of course in chunks).
I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.
They are only selling puts...that's a half-hearted short. They have the resources to borrow shares and bag the whole amount without a time constraint...why not do that?
How many bad predictions does he need to make before people stop caring what he has to say?
I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.
The market will correct before mid-terms next year. This is almost a certainty. By how much and when exactly - now, that's where the shorting profits are. PS. Burry infamously made several more bets after the "big short", bets that misfired. That is, his record is far from being 100% right.
Will it be another "correction" where it pulls back ~10% before going up another 15%? The powers that be have too much invested in the market continuing to move up, you are basically betting that Trump, a bunch of billionaires and the FED are going to let the market crash to curb inflation and income inequality. That feels like a bad bet to me.
By their very nature the markets can overwhelm any desire to "[not] let the market crash]"
Hasn’t he been incorrectly predicting massive crashes every few years ever since he was right that one time? How many bad predictions does he need to make before people stop caring what he has to say?
I'm not sure the bet is as big as it seems from the headline. When you buy options, you pay a fixed premium to get the right to buy/sell a very large value of shares, called the notional. But the notional is not what you are losing if it goes wrong, you lose the premium. The premium can be quite a small number compared to the notional.
Hasn’t he been incorrectly predicting massive crashes every few years ever since he was right that one time? How many bad predictions does he need to make before people stop caring what he has to say?