HOW TO MAKE MONEY SELLING PUTS

The low-risk method for turning limit orders into cash.

It doesn't take a genius to know that the stock market is overvalued.

Airbnb shares hit the market today and doubled right away. This in a time when half the planet is shut down and many people are scared to travel.

Of course, that's just one example. There are plenty more companies with impaired fundamentals now trading at or near al-time highs.

It is very hard to find a bargain anywhere, similar to June / July where everything popped, only to tank in value by September.

This means you have three options:

1) Sit in cash.

2) Buy now, expecting both a future drop and recovery.

3) Sell puts , treating them like limit orders and collecting cash while you wait for share prices to fall.

We'll focus on number three.

Also, quick disclaimer: I'm obviously no financial expert and this thread is purely for entertainment purposes only.

Anyway, back to the main content.

Franklin Investors are asking if they vote YES when will they get back full payment & what is time limit for winding up. This thread answers their questions which none is answering and all investors want to know

Investors need to refer to #SEBI Rule 14.5 which governs Distribution of Proceeds realized by MF from investments which are illiquid at time of winding up

If amounts are realized from illiquid investment after 2 years of winding up it has to be transferred to Investor Education Fund

Hence the mutual fund is required to sell all bonds within 2 years of winding up i.e. 23rd April 2020. So investors will get back entire amount by 22nd April 2022.

So Winding Up Process cannot continue indefinitely as is being misunderstood by most of investors Experts & even MF

Special Purpose Acquisition Company (SPAC) has become very popular globally, especially in USA. SPACs are known as blank cheque companies, because its a shell company with cash. What is it? How does it work? This is a thread.

(1) A group of people, known as the promoters / founders will list a company (SPAC) on the stock exchange. They are the key management who are also shareholders of the SPAC.

(2) SPAC is a listed company, but has no assets, no business, nothing. It only has cash raised from IPO. Shell company with lots of money.

(3) Once listed, the SPAC will use this money to acquire another company and merge it into the SPAC. Once merged, the company is no longer a SPAC, as it now has assets & a core business and operates like any listed company.

(4) The money raised from IPO will be kept in a trust, until an acquisition is identified, closed & approved by regulators & shareholders. The operating expense of the SPAC is borned by promoters until the SPAC turns into company.

A thread on 𝐇𝐨𝐰 𝐓𝐨 𝐀𝐝𝐣𝐮𝐬𝐭 𝐚 𝐒𝐭𝐫𝐚𝐝𝐝𝐥𝐞

1/n

1. First of all one should know when to do a straddle, ideally when premiums are good and view is 𝐬𝐢𝐝𝐞𝐰𝐚𝐲𝐬 or when you are not expecting a huge trend.

2. When you do place a straddle, you will have good premiums so you will be covered for a good amount of move.

2/n

3. Find your breakevens, and ideally delta should also be neutral.

4. Do not adjust until your BEP is breached or the delta exceeds (+/-)40, whatever happens first, generally delta limit will breach first.

5. When delta reached lets say -40 it means you have to roll puts.

3/n

6. Just book profits in the current short put and roll put up by matching the premiums, delta should again be close to neutral but one can choose to have a little -ve delta since if there is mean reversion, PEs will spike.

7. This means you will be going Inverted(Short ITM)

4/n

8. Keep repeating the same process until expiry OR till either one option reaches 100 delta which will mean that you basically are short/long one future lot.

9. As soon as any option reaches 100 delta, just book the straddle be it in loss or profit, dont adjust at all.

5/n

With a fixed supply of money, holding the money itself is similar to investing in a global index fund which offers no yield but appreciates with global productivity. Anyone can be an investor; zero fees, experience, or professional management required.

Anyone who earns money can expect to keep it and watch it appreciate, without needing to do any more work.

With easy money, you need to beat inflation to keep the value you earned & for that, you need several professionals working full-time trained for years and plenty of luck

Imagine if every child could expect any money they earn or get as a gift to appreciate over time without needing professional management. How much more would children grow up to value saving and low time preference?

Imagine if every professional could focus on their job and watch their savings accumulate & gain value without needing to have a side job trying to figure out what stocks, bonds, commodities, and other arcane instruments to buy & who to hire to manage them all?

Imagine if the old, retired, and widowed could just count on their savings maintaining value without having to follow & speculate on global macro trends & insane monetary policies.

Our major new analysis of the EU-UK trade deal highlights ten areas that must be addressed urgently to deal with non-tariff trade barriers looming come January 1st.

Although the Johnson deal is better than a WTO arrangement, it will still result in ‘considerably higher barriers’ to trade.

identifies areas of concern ranging from regulatory challenges and data issues to membership of the Erasmus scheme and climate change.

Commenting @BestForBritain CEO @pimlicat has said:

“This deal was negotiated at speed, and it shows. It is far from the comprehensive deal voters were promised”

“it is woefully thin on services that account for the lion’s share of our economic power, and it bares little resemblance to a modern trading agreement.”

Starting to collect important questions for 2021 and beyond in this thread.

Please send questions you are interested in too!

1. Will demand for compute continue to double every few months? Tons of implications for semiconductor design and manufacture.

2. What will be the next major use of mRNA vaccines? What will our new understanding of protein folding lead to?

3. How will better data and workflows improve our health care system (prediction, prevention, price of care, outcomes, compliance)?

4. Will we fully unbundle undergrad and graduate school into the information/learning component (which should be a fraction the cost for multiples the quality) and the networking component?

5. Digital art creation and collection make sense to me, but how will digital art be displayed?

1/ Who are the investors in GBTC?

Why is there a premium?

And what is the sweet trade they’re taking advantage of?

A thread 🧵

2/ Grayscale’s Bitcoin Trust made headlines again with their record 1-day addition of 16,244 Bitcoin, adding to their stack of over 630,000 Bitcoin and an AUM of ~$23B. Evidently business is good...So who are their investors? And is GBTC’s premium an incentive or disincentive?

3/ What is the Grayscale Bitcoin Trust (GBTC)?Grayscale owns BTC in the trust & investors buy shares to represent a # of BTC. There’s a 2%/yr fee+a “premium.”The premium is the diff. btwn underlying BTC value(Native Asset Value or “NAV”)vs. mkt price of holdings(what shares cost)

4/ There are 2 layers of investors. There are the base layer investors - accredited investors selected to buy into the private placement of the fund at the “NAV” price aka the price of the underlying BTC value

5/ They can send USD or Bitcoin and receive a # of shares equivalent to the BTC value (0.00094919 BTC/share). One catch is its 1 way - Once you put BTC into the trust, it can’t be redeemed. Investors can sell their shares, but the BTC will remain in the trust and off the market

Checking in on the energy investing framework as we approach year end 2020

First we revisit the rules. 1) Equities follow crude

2) Crude timespreads momentum dictates crude price momentum. Strengthening timespreads = strengthening crude price

3) Over the medium term, crude follows a) global inventories & b) Emerging Markets (BRICS) growth.

In a nutshell, as goes the global business cycle, so goes the energy cycle

#1 Crude vs OECD inventories #2 Crude vs BRICs GDP

The energy cycle consists of inventory build & draw periods

Draws=bullish
Builds=bearish

Energy equities (red, inverted) and crude inventories

A thread on the Tasmota TLS MitM attack I found a few months ago since getting a proper blog post about it is taking me forever.

Tasmota is an open source firmware that runs on a number of ESP8266-based IoT home automation devices, which talks to an MQTT broker for management.

MQTT can be run over TLS to provide confidentiality and integrity, but given the constraints of running on an ESP8266 device, standard TLS certificate validation is rather heavy. As an alternative, Tasmota implements fingerprint based validation, like SSH

The fingerprint validation can do "trust on first use" (TOFU) and just remember the server's public key. This can work well if you're hosting your own MQTT server, and you can just use a self signed certificate. The fingerprint algorithm was even based on how SSH does it.

If you read RFC4253, it describes the RSA key format with the following encoding

string "ssh-rsa"
mpint e
mpint n

where e is the public exponent (usually 65537) and n is the modulus.

Slight problem. RFC4253 doesn't explain what an mpint is.

You have to go dig up RFC4251 for what an mpint is. The precise details don't really matter for this bug, but the critical detail is that an mpint is length-prefixed, which makes it unambiguous where when mpint ends and the next begins.

Tasmota's implementation missed this.

1. Some initial thoughts on the U.K.-EU trade deal, in advance of seeing the text, which is reported to be 2,000 pages plus...A THREAD (1/10)

2. As has been said repeatedly, this is what was described at the start of the process as a hard Brexit: the U.K. will be outside the Single Market and the Customs Union. There will be no tariffs or quotas but customs checks etc will erect substantial trade barriers in EU trade

3.There will be nothing for services except in areas where the EU will unilaterally grant equivalence. The EU will play hardball on this eg at end Nov EU made it clear that European derivatives trading will be limited to platforms inside the EU or third countries with equivalence

4. There will be areas where some products will be excluded from the trade deal. Seed potatoes has been mentioned - there may be other surprises yet.

5. Who moved? It seems as if the U.K. moved substantially on fish and the EU moved on its initial position on the LPF and the arbitration mechanism: it wanted something which involved automatic ratcheting - it feels more like a standard FTA between EU and non-European countries.

1. You will read today many ignorant assertions, of this ilk ...

https://t.co/5d5jgqVDqI

... to the effect that the EU has introduced "significant barriers to free trade e.g. customs and regulatory checks".

But the EU has introduced no new barriers.

2. Simply, the UK has redefined itself as a "third country" and positioned itself outside the EU's existing regulatory

3. As a third country, it will now have to deal with all the pre-existing regulatory barriers that have been erected over time, which apply (to a greater or lesser extent) to other third countries.

4. The degree to which this trade deal is effective can be measured by the extent to which these entry is handicapped by these pre-existing barriers, and what steps have been agreed to mitigate the effects.

5. However, as long as the UK is a third country, outside the Single Market, traders will have to deal with significant entry barriers when sending goods to the EU. These are an unavoidable consequence of leaving the Single Market.

Worried about the stock market?

Is this really the top?

Pull up a (virtual) chair and let’s chat 🪑

👇

So. Things are getting a little crazy out there.

TikTokers are spewing financial advice.

Carole Baskin is peddling penny stocks.

Everybody’s like “OMG my mom’s-best-friend’s-cousin made so much money in the market, c’mon it’s so easy!”

Makes you feel a little like this, right?

(couldn't resist the Zoolander reference)

Anyways,

Your portfolio is up, but Wall Street is throwing around the b-word (bubble) and you’re afraid it’s about to pop.

What do you do now?

The dominant narrative around the $gme story is that some weirdos in their mom’s basement are manipulating the stock market.

That’s is so, so wrong.

[thread]

A prominent user of the #wallstreetbets community has been publicly posting about their position and positive outlook on $GME since September 2019. #YOLO

They didn’t pick the stock randomly. There are reasons to like GameStop. Google “Ryan Cohen” for more on that.

[2/?]

So, many on #wallstreetbets already liked $GME since late 2019.

Then, someone realized that there was a lot of money shorting that stock, essentially betting that the stock would go down.

And, I mean A LOT of money!

[3/?]

Shorting a stock, in simplest terms, is borrowing shares of a stock for a fixed amount of time, and immediately selling it at the current market price.

When the stock price goes down, you buy it back at the lower price, pay the lender back and pocket the profit.

[4/?]

There are lots of legitimate uses for shorting a stock, like hedging your risk, which is sort of like buying an insurance policy.

However, that’s not what the impacted hedge funds were doing. They were making a big risky bet that GameStop’s stock was going down.

[5/?]

Good evening and welcome to this week’s edition of 11 Wall Street.

This is a weekly thread where i look at happenings in the US equity space in the outgone week.

Please retweet from the very first tweet, so those on your timeline do not miss out.

If you have any questions or comments, please feel free to share.

It was a red week across board. The Dow Jones Industrial Average (commonly known as the Dow) fell by 0.91%.

The S&P 500 index fell by 1.48% and the NASDAQ composite index dipped by 1.54%.

Last week marked the commencement of the earnings season, with a number of banks releasing their earnings.

JP Morgan released its Q4 2020 numbers. It made $31.6 billion in revenue and an earnings per share of $3.79

Citigroup made $16.5 billion in revenue, and an earnings per share of $2.08.

Wells Fargo made$17.9 billion in revenue and an earnings per share of $0.64

@ttmygh @htsfhickey @fleckcap What a great podcast!

Summary of stocks mentioned follows...

THREAD.

@tttmygh @htsfhickey @fleckcap

@htsfhickey @fleckcap $AEM is considered the premier miner cuz location of mines, only in North America and 1 in Finland. Also great acquisitions at the bottom. Earned $.80 in the Q, up 122% YoY, hiked div 75%, near record production, in spite of some planned shutdowns.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $AEM Analysts estimate $4.07 conservatively this year, PE 15. And that for the premier gold stock with the best locations and the best management. And that's the highest PE.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $AEM in growth phase, 20% over the next couple of years, they've spent all the capital. Expect their cost to come down as the production goes up.

@htsfhickey @ttmygh @fleckcap

@htsfhickey @fleckcap $NEM PE 12, just had the best Q in history, div policy based on cash flow (was enormous), increased divs 2x, possibly another 50% increase coming. Won't grow production but will grow cash flow & earnings.

@htsfhickey @ttmygh @fleckcap

People often ask why structural variants (SV) are so important and why $BNGO is laser focused on revolutionizing the way they are detected in the clinic. Doesn’t the success of $PACB and $ILMN show that sequencing and the small variants it detects are what matters?

Let’s look at what happens in the industrialized world when a doctor orders a genome to be analyzed. If a child has a suspected genetic disease, medical guidelines recommend successive testing rounds until a pathogenic variant is found or all techniques have been exhausted. $BNGO

Before we go into detail, let’s start by pointing out that this NEVER involves long-read whole genome sequencing by $PACB or Nanopore. Never, nowhere. Those are niche sequencing technologies for reference genome projects but not practical for the clinic. $BNGO

Long-read sequencing COULD matter in the clinic in the future if they get cost down & throughput significantly higher. As comparison, a whole genome w/ $PACB HiFi takes several days per patient per sequencer. Unusable in the clinic. Each Saphyr can run 96 patients per week! $BNGO

The tests start with chromosomal microarray (CMA), karyotyping, and then repeat expansion testing, single gene or gene panel testing, and whole exome sequencing. This long and expensive process still leaves 50% of children undiagnosed. $BNGO