Trading | Buzz Chronicles

*THREAD*

Scalp vs Swing Intraday trades and FOMO of “I can’t close it’s going higher.”

You’ll find yourself often caught between these feelings.

Looking at LTF for an entry, the market moves +10% and suddenly you find yourself looking to turn it into a swing.

The likely outcome in the MAJORITY of situations is:

Price pumping
Feel great about PNL
Look for higher targets
Price corrects
PNL drops
Either panic close before reversal
Or close at Break Even

The process is damaging to your balance and your psychology.

The reason is that your LTF entry is often unsuited as a swing entry point and if it is, your mentality is not prepared or able to hold for the swings.

This is an issue scalpers have to battle consistently. They will nail 3-4% moves while watching price often run 8-12% after.

You have to understand why you took your entry, what your expectations are and how you can manage the trade.

Converting from a LTF trade into a HTF one comes down to greed. We see green PNL and automatically start getting carried away with expectation.

In these conditions however there needs to be some grace given to that thought process. It’s possible but under management.

Aditya Trivedi
@itsAdityaT

Most of the successful traders here are option sellers.

Ever wondered why?

Why we have chosen option selling?

Find our below

1: Being wrong and still making money.

We as option sellers can be wrong with our market view and still end up making money because of the power of theta decay and adjustments to some extent.

Adjustments work better as get closer to expiry since decay is the highest.

2: Theta decay

The biggest reason and one of the prime reasons is the theta decay.

Option sellers always have an advantage because the as time passes, the option premium falls even if the underlying instrument doesn't move.

3:Playing directional view

Option selling also enables us to take a directional view. In fact, directional view along with theta decay makes it a solid combination.

Debit spreads and credit spreads works great for a directional view.

4: Playing Neutral view

We can make money in option selling even if the market doesn't move as the otm options will go to 0 with the help of theta decay. It's the most fascinating thing.

This is what attracted many into option selling.

BlueToothDDS
@BlueToothDDS

$FISV investor day this week provided some new insights into the composition of — and more importantly, the growth engines within — each of its 3 operating segments

Will attempt to deep dives on each to build on some of my musings from earlier in the year on this topic 🤗 https://t.co/Amlnje1Qiq

3) The revenue mix of $FISV today (post FDC merger) is roughly ~40% merchant acquiring, ~45% issuer processing and other payments related services, and ~15% core bank processing. Will take these in turn, then highlight growth levers I\u2019m most excited to watch in the coming years pic.twitter.com/yhvkCQrsF8
— BlueToothDDS (@BlueToothDDS) March 6, 2020

Will also try to bridge to an earlier thread laying out the $FISV growth algorithm and the operational/financial levers that support its medium-term outlook of 15-20% FCF/share growth

Here we focus on the top line, most notably the impressive acceleration across all 3 segments https://t.co/8HzMhEC5Bj

12) $FISV has both operational levers ($0.6B revenue synergies, $1.4B combined cost synergies + add\u2019l cost take out) and financial levers ($30B+ deployable FCF) to support its 15-20% compounded FCF/share growth

... and this is all before underlying business momentum (tomorrow) pic.twitter.com/JBtlGQIfBT
— BlueToothDDS (@BlueToothDDS) December 9, 2020

Let’s start with Merchant:

1) This segment, which ~40% of $FISV revenue today, is the #1 merchant acquirer globally processing $3T+ annually for 6M merchants worldwide

2/3 of revenue is from SMBs, ~20% from mid-to-enterprise merchants, remaining ~15% is wholesale processing

2) 🇺🇸 is 3/4 of the $FISV Merchant segment and the scale of this business is unmatched: it processes 40% of all in-person purchases in the US, covers 80% of all US zip codes and accounts for 10% of US GDP. This book of business is the most balanced in the industry https://t.co/Qlkk7lz3jQ

4) $FISV merchant business is the largest US acquirer processing $2.4 trillion of payments annually (including through JVs with BAC, WFC, PNC, C) accounting for 10% of \U0001f1fa\U0001f1f8 GDP. This segment includes Clover, which focuses on SMBs and is $105B runrate today growing at 40%+ annually pic.twitter.com/M5j4mbeiJX
— BlueToothDDS (@BlueToothDDS) March 6, 2020

3) Internationally, $FISV Merchant has strong position in EMEA (top 3 through various JVs and alliances) and several high growth countries, among others: India 🇮🇳 (top 3 with ~15% share), Argentina 🇦🇷 (~50% market share today), Brazil 🇧🇷 (routing ~30% of all electronic payments)

It takes two to contan...
@2Contango

THREAD

Goldman Warns If The Short Squeeze Continues, The Entire Market Could Crash (Zero Hedge Premium)

Last Friday (Jan 22) we advised readers who thought they had missed the move in Gamestop (they hadn't), to position appropriately in the most shorted Russell 3000 names:

which included such tickers as $FIZZ, $DDS, $BBBY, $AMCX, $GOGO and a handful of other names, as it was likely that the short-squeeze was only just starting.

We were right and all of the stocks listed above - and others - exploded higher the coming Monday,

and all other days of the week, with results - encapsulated by the WallStreetTips vs Wall Street feud - that have become the only topic of conversation across America, while on WSB the only topic has been the phenomenal gains generated by going long said most shorted stocks.

To wit, the basket of top shorts we compiled on Jan 22 has tripled in the past week.

And while some are quick to blame last week's fireworks on the "dopamine rush" of traders at r/wallstreetbets who seek an outlet to being "copped up with little else to do during the pandemic"

while also blaming widespread lockdowns and forgetting that it has been Bloomberg that was among the most vocal defenders of the very lockdowns that have given us the short squeeze of the century), the reality is that at the end of the day

$Patrick\U0001f578$

Patrick🕸
@STILLTish

A reminder of the Newsnight expose on The Tavistock.

Homophobia was a factor in the resignation of over forty staff over a three year period.

Girls openly telling staff they suffered homophobia in the family and at school.

Eventually they ended up identifying as trans.

Parents openly stated they would prefer a trans kid rather than a gay one subject to parental pressure? Director of GIDs pushing prescribing despite clinical concerns.

Ram Bhupatiraju
@RamBhupatiraju

🔟Investing concepts that blew my mind🤯when I read them, and greatly helped my investing journey.

Would love to know about some of yours.

@saxena_puru @BrianFeroldi @GavinSBaker @7Innovator @dhaval_kotecha @Gautam__Baid @richard_chu97 @10kdiver @FromValue @investing_city

Below thread has the references to each of these 10 concepts.

Note : Many of these are my past Tweets related to these topics. Not trying to self promote them. Adding them only because they have the original links, added context and my highlights & fav pts.

Let's dive in. ⬇️⬇️

1⃣ Benjamin Graham's Mr. Market analogy.

An extremely useful concept, especially when

Market is panicking (& throwing out good Co's at bargain prices) & when

Market is too complacent (& awarding high valuations to hype and

Excellent compilation of quotes from Benjamin Graham's "The Intelligent Investor". \U0001f44f

cc: @dmuthuk @Gautam__Baid https://t.co/LNKNVXVj1b
— Ram Bhupatiraju (@RamBhupatiraju) May 25, 2020

2⃣ Philip Fisher's hyper-focus on growth stocks (written 60 years ago).

Very useful and mostly still applicable stuff on how to deeply analyze Growth Co's (except Stock based Compensation & Adjusted EBITDA of

Great summary of Philip Fisher's "Common Stocks and Uncommon Profits". It's no secret that this is one of THE BEST books for Individual investors but it's still enlightening to re-read the book or these summaries.\U0001f44d

cc:@saxena_puru @Gautam__Baid @dmuthuk https://t.co/u16X3CKj8V
— Ram Bhupatiraju (@RamBhupatiraju) June 4, 2020

3⃣ Peter Lynch’s empowering writing on the edge of the individual investor when they invest in what they know (or can

Peter Lynch's "Use Your Edge" essay has some great lessons for individual investors. \U0001f44f

Solid advice at the end of the article (my fav points highlighted).\U0001f447https://t.co/nkUVDh0NVA pic.twitter.com/aQ1eFr2SGC
— Ram Bhupatiraju (@RamBhupatiraju) November 25, 2020

Joe Marshall
@Joe_Marshall0

Draft legislation to implement the UK-EU deal now published

A few quick thoughts (although very much first

It seems like the bill contains a mix of some of the options outlined in our @instituteforgov explainer on UK ratification

https://t.co/WUa3MSkABL

Clause 29 seems to be a catch all clause - so existing domestic law is treated as subject to the UK-EU deal where it has not been specifically amended to implement it (where this is required) (more from @ProfMarkElliott
https://t.co/FEBrdG09Cy)

Cl 29 of the Future Relationship Bill is certainly interesting. If I\u2019ve understood correctly, it is, in effect, an automatic Henry VIII clause that requires existing domestic law to be treated as subject to the Agreements to the extent that they have not been implemented. pic.twitter.com/nyL52YOslD
— Mark Elliott (@ProfMarkElliott) December 29, 2020

Also seem to be separate provisions for the social security coordination protocol to form part of domestic law (clause 26)

Clause 31 includes a general implementating power (a big Henry VIII power, that allows the use of secondary legislation to do anything an act of parliament could do). Seems to be affirmative. Exercisable by gov and also devolved administrations. Inevitable given short time.

$Keshav Sood, FRM\xae$

Keshav Sood, FRM®
@Keshav_Sood101

Despite DII selling since Sept 2020, markets have continued to move up due to continued FII participation.

Demand recovery is still uncertain and uneven. Complete opening up of economy leads to the risk of a second wave.

COVID- A disguise in blessing. COVID has taught many businesses how to curtail expenses and improve margins.

"China +1" Theme can be a good opportunity for India

Capex Cycle Recovering

tyson brody
@tysonbrody

In which Chamath quite literally says Robinhood “should go to fucking jail” for obeying legal collateral requirement

E19 is HERE \U0001f4a7\U0001f426\U0001f4a7

Breaking down & debating Robinhood's decision:
-- understanding the full WSB saga
-- how/why it happened
-- how it can be prevented in the future & more

\U0001f447\U0001f447
\U0001f50a: https://t.co/w8QSGBUQSi
\U0001f4fa: https://t.co/OU5W2qn7JN
— The All-In Podcast \U0001f4a7\U0001f426 (@theallinpod) January 30, 2021

Like he actually connects the two and mentions collateral requirements and says RH should go to jail

This is maybe the worst discussion I’ve heard of GME from people who clearly know better. They’re encouraging people to “watch billions” to understand how hedge funds work.

Oh just got to the point where they call for a short term transaction tax to REPLACE the capital gains tax.

Chamath calls lowering the cap gains tax “genius”

Oh now Chamath believes the class actions will work because of the “implied losses,” because users clearly lost tens of billions theoretical gains!

The solution is to move accounts to other brokers (like sofi)

Yash Mehta
@YMehta_

Option Trading is very difficult to master as there are so many things to understand.

Here is a master thread related that will help a beginner to understand about Options Trading.

A complete course worth Rs 50K for free.

1/ A detailed thread on basics of Option Greeks and how it impacts Options

There are various Options Greeks like: Delta, Gamma, Vega, Rho, Theta.

A complete guide on how these #Option Greeks impact option price.
— Yash Mehta (@YMehta_) September 4, 2022

2/ Basic Option Trading Strategies:

There are many option strategies to trade. But keeping your strategy simple is the key.

In this thread, all the basic option trading strategies are being

Option trading is tough but here\u2019s what can make it easier for you

8 option strategies that you can use in any market (sold as a \u20b9 50,000 course !)
— The Chartians (@chartians) September 17, 2022

3/ What are the things that you should look at before taking any Option

They say options trading can make YOU BANKRUPT - is it true ?

If yes then why ?

A thread on Risk management and Position sizing in options trading (worth 50k\u20b9 course)\U0001f9f5
— The Chartians (@chartians) September 23, 2022

4/ Is Option Selling Possible with Rs 1 Lakh Capital?

Even a beginner can start trading in option selling with capital as low as Rs 1 Lakh.

What are the techniques one can use and how to mitigate the infinite loss risk is shared in this

101 guide on how you can start option selling to generate active returns with less capital (Rs 1 Lakh) \U0001f9f5:

A course on option selling available for free.
— Yash Mehta (@YMehta_) August 19, 2022

Nilesh Kadam
@NileshTrader

Dealing with Losses.

Perfectionists are often motivated by avoidance. The need to avoid unpleasant emotional experiences. Traders who seek the perfect system are also likely to be motivated by the need to avoid unpleasant experiences.

With trading losses, the only pain that you will suffer is the emotional reaction to a loss. If you concentrate on avoiding losses rather than on maximizing your overall gain, you are unlikely to succeed at trading.

Traders may all incur the same loss but suffer vastly different emotional responses. A lot depends on their past experiences not only while trading but in the broader arena of life.

More competitive u are, More uncomfortable u are about taking loss. From an early age, we programmed to compete, to win, to accomplish, to be top of the class, to always be right & to succeed at whatever we set out to do. Losses are equated with losing to be avoided at all costs.

Newcomers to trading often start off with a string of positive experiences. Unfamiliar with the basics of money management, they are often over-confident and prepared to bet large amounts of their capital in the expectation of further gains.

Eric Basmajian
@EPBResearch

It is difficult to change a 10-year trend.

Long-term expectations do not change as frequently as daily market fluctuations would make it seem.

A quick update on Treasury rates through the lens of the DKW model

*As of Dec. 31*

1/

In previous threads, I made the distinction between long-term secular trends in growth and inflation and shorter-term (2-6 quarters) trends in nGDP

Consensus continues to conflate the inflation story, mixing and matching long-term and short-term charts to fit what is generally a secular inflation narrative.

Here are my two cents to make the distinction clear.

1)
— Eric Basmajian (@EPBResearch) January 4, 2021

Right now, the long-term trends are unaltered because long-term trends just don't change that fast but we have a very strong cyclical upturn in the economy, centered primarily on the shift to goods consumption bolstering the manufacturing sector and industrial commodities.

3/

As long as the industrial sector continues to roar, TSY rates will have an upward bias as rates generally follow the trend in nGDP growth

A 10yr TSY has longterm expectations embedded in the rate so several qrters, while important, won't necessarily change the longterm trend

4/

This is confirmed by the Dec update to the DKW model which breaks down *actual* inflation expectations, the expected real short-term rate (real growth), term premium, liquidity premium etc.

The DKW model is one of many models that is useful but has many limitations.

5/