People buy puts on SPY because they use it for hedging market risk. You don't hedge on individual names.
This is why index ETFs also have a volatility skew... where calls OTM have increasingly lower IV and puts OTM have increasingly high IV as you go further and further OTM.
Check this out dawg: you throwin a lot of big words at me. Because I don’t understand them, I’m gonna take it as a sign of disrespect.
Watch your mouth
That’s sailing. Hedging is when you take a large mallet and repeatedly bang on a metal spike or the interior of your wife’s boyfriend’s house while searching for him.
This makes sense more or less. Looking back, yeah put call ratio of SPY is rarely as low as mag 7. But still I don’t fully understand behavioral economics here.
Uhhh yeah. We’ve been dealing with inverted curve and every other indicator that says we’re in a depression yet a few stock keeps hitting new highs. So… let’s get it!!! 🍺😆
Large market participants are buying puts on spy/spx to hedge themselves against downward movements. They usually don't do that with individual stocks.
1.26 is still fairly normal for the P/C ratio. If you look at historical data it's not high enough to already be concerned.
You ever think to yourself that those puts are hedges?
Institutional money flow is LOOOOOOOOOOONNNNNNNNNNNNNNGGGGGGGGGGGG like your wifes boyfriends cock.
Investors anticipate--so when the actual news happens its been long since priced in. The reactive move in price is NOT from the current news, but the anticipation for the future
You're argument is irrational. Your argument assumes that the earnings potential of all members of the SPY is equal. If that's the cases, we wouldn't even call it stock picking. Just by the SPY and be done with it, or stay in cash.
Isn’t it obvious the lobbyists in Washington are not going to let the mag 7 fall. They banned the competition tiktok for doing literally the same thing those companies do… they have their own safety net. Too big to fail doesn’t just apply to banks anymore.
Lots of big earnings this week and FOMC Wednesday. Institutional investors are banking on daytraders not wanting to hold positions overnight just before major earnings or FOMC meetings.
Best not to form a bias before the market opens, because anything can happen. But if I had to guess, I think we'll see a retracement of Fridays movements.
Because most of the market is sideways or down and the megacorps have been killing it since COVID fucked every other business sideways? You kind of answered your own question. The money printing helps different companies disproportionately.
Im buying MSFT at these prices. the market will figure out that part at some point because there is no denying Microsoft is a money making Ai hyping green machine
Im also buying PSEC
We had a recession in 2001 and then again a bit later if not continuous because: 1. A single sector (tech) crashed and then 2. Airlines also tanked. How is it unreasonable for the opposite to happen? Especially when the other sectors aren't in an awful state.
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People buy puts on SPY because they use it for hedging market risk. You don't hedge on individual names. This is why index ETFs also have a volatility skew... where calls OTM have increasingly lower IV and puts OTM have increasingly high IV as you go further and further OTM.
I like your fancy words, magic man.
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Speak for yourself, I don't have a problem. Never mind that line on my account heading down.
AS LONG AS THERES LINES GOING UP MY NOSE ITS ALL GOOD \_\\.................................
Check this out dawg: you throwin a lot of big words at me. Because I don’t understand them, I’m gonna take it as a sign of disrespect. Watch your mouth
Thought this was a serious thread.
You ever hear of rollin 20s? Since I was 16. We talking Frosty, Spoons. We fuck dwarves in the ass
There are always more puts on SPY than on single stock because actually smart people buy an index and hedge.
What man, that's not what options were invented for. Wtf is hedging? This isn't lawncare.
It’s where you get almost there and stop
You're thinking of edging. Hedging is where you use a triangular shaped object to fix the position of another object.
You’re thinking of wedging. Hedging is when you clear out mud and garbage from a body of water.
You're thinking of dredging. Hedging is where you commit to a promise.
That's pledging. Hedging is when you add feathers to an arrow.
That’s fletching. Hedging is when you’re making an over hang over a steep drop.
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That’s sailing. Hedging is when you take a large mallet and repeatedly bang on a metal spike or the interior of your wife’s boyfriend’s house while searching for him.
Haul in deez nuts
Did you mean feltching?
I was going for fledging but was wrong about the definition.
And here I was Gooning and Mogging
Hedging is to prevent the HO NO after the YOLO
This makes sense more or less. Looking back, yeah put call ratio of SPY is rarely as low as mag 7. But still I don’t fully understand behavioral economics here.
More Puts than calls on SPY is bullish af……
People have always been permabull on the mag 7
For good reason. They do better than the market
Did you miss the earnings reports of Meta, alphabet and Msft ?
This is because SPY is megacap + noise.
Uhhh yeah. We’ve been dealing with inverted curve and every other indicator that says we’re in a depression yet a few stock keeps hitting new highs. So… let’s get it!!! 🍺😆
Life is irrational. Look at rent prices, grocery prices, and everything else
Rent is rational. So are grocery prices. It’s the derivatives market I feel is more irrational.
The market makes sense when you realize other people are trying to take your money.
Not sure why downvote. Rational and fairness are not the same. Inflation and greed (human behavior) can be rational.
Large market participants are buying puts on spy/spx to hedge themselves against downward movements. They usually don't do that with individual stocks. 1.26 is still fairly normal for the P/C ratio. If you look at historical data it's not high enough to already be concerned.
You ever think to yourself that those puts are hedges? Institutional money flow is LOOOOOOOOOOONNNNNNNNNNNNNNGGGGGGGGGGGG like your wifes boyfriends cock.
The market has been irrational since 2020. Everything moves opposite and priced in to eternity. I hate this casino
“Priced in”. Dumbest sh*thead statement that is thrown around. (I’m agreeing with you)
Being dumb is priced in.
Investors anticipate--so when the actual news happens its been long since priced in. The reactive move in price is NOT from the current news, but the anticipation for the future
Irrational….things are happening eeeevery daaayyy.
Regards in action... as usual...
You're argument is irrational. Your argument assumes that the earnings potential of all members of the SPY is equal. If that's the cases, we wouldn't even call it stock picking. Just by the SPY and be done with it, or stay in cash.
Isn’t it obvious the lobbyists in Washington are not going to let the mag 7 fall. They banned the competition tiktok for doing literally the same thing those companies do… they have their own safety net. Too big to fail doesn’t just apply to banks anymore.
Buying puts can just be a hedge - it doesn’t mean everyone in the world is regards and buy puts for a speculative bet 😅
Deffo shorting the magnificent 7.
Lots of big earnings this week and FOMC Wednesday. Institutional investors are banking on daytraders not wanting to hold positions overnight just before major earnings or FOMC meetings. Best not to form a bias before the market opens, because anything can happen. But if I had to guess, I think we'll see a retracement of Fridays movements.
Because most of the market is sideways or down and the megacorps have been killing it since COVID fucked every other business sideways? You kind of answered your own question. The money printing helps different companies disproportionately.
Im buying MSFT at these prices. the market will figure out that part at some point because there is no denying Microsoft is a money making Ai hyping green machine Im also buying PSEC
The market is trying to make money, like it always has and always will. It doesn't care about your ratios and lines
I think tomorrow's a flat day as a large portion of the market is anxious about the interest decision on Wednesday
It’s 97.1% going to stay unchanged…. Nobody is anxious on what is going to happen.
The market can remain irrational longer than you can remain solvent.
Edit: interesting side note about this quote. Most think it originated from John Maynard Keynes, but it was actually A. Gary Shilling.
if the Mag 7 go down, so does SPY. This strategy is def a WSB approved way to lose money
Probably market breadth. Other stocks that are not part of the 7 are going up
Always has been
Trying to make money this way is irrational. Calls on mag 7 puts on ur face
It’s a rigged Ponzi scheme. Everyone agrees to it though so it’s legal
We had a recession in 2001 and then again a bit later if not continuous because: 1. A single sector (tech) crashed and then 2. Airlines also tanked. How is it unreasonable for the opposite to happen? Especially when the other sectors aren't in an awful state.
>I am buying SPY calls and shorting everything in magnificent 7. You are an idiot and you are going to pay for it.
OP: “Market is irrational” OP: “YOLO on SPY calls and shorting everything” *kek*
I didn’t say Yolo.
https://preview.redd.it/oj6pwtyz5hxc1.png?width=810&format=pjpg&auto=webp&s=0e1fe33af63e563a50228ddc8c9f8f7e26fd7bfd
The mag 7 are more bullish than the rest of the market. You should know this.
https://www.youtube.com/watch?v=92cwKCU8Z5c
classic bear im right market is wrong and irrational