Dennis Gorelik

Got lucky today and sold 18,425 GUSH shares for $0.77/shares
But did not use my luck to sell more (should have exited for the sake of my sanity).
At the end of the day GUSH was at $0.61/share
I learned today that:
1) GUSH decayed over the weekend about 25%:
(GUSH dropped since Friday 21.19%, and opposing bear 3x ETF DRIP dropped 29.41%)
So they dropped on average (21.19% + 29.41%) / 2 = 25.3% which is a lot.
https://www.google.com/search?q=stock%3Agush
I should have remembered about weekend decay from my FAS/FAZ experience back in 2008.

2) GUSH grew [*] a little bit today, in spite that S&P 500 dropped a lot.
[*] GUSH grew relative to Sunday, but dropped relative to Friday due to the weekend decay.

I expected that S&P 500 would grow at least a little bit, because the Fed rate cut on Sunday.
I even disagreed with the Fed decision to cut rates as much.
But I was wrong. The markets panicked anyway. A lot. S&P 500 dropped 11.98%

I expected that GUSH will grow proportionally to S&P 500.
I was wrong. GUSH went in the opposite direction from S&P 500.
Looking backwards I may expect some of that GUSH comeback, considering how much GUSH (that is based on SPSIOPTR) dropped on the day I bought GUSH for the first time. But I did not expect that SPSIOPTR comeback to be that quick and prominent.

So it is clear now that I cannot do short-term market predictions. I can do long-term market predictions generally successfully, but my short-term market predictions are closer to random noise.

GUSH fell 25.50% today - down to $0.54/share
I bought 8077 GUSH shares at $.5143/share

I plan to start selling GUSH CALL options (with under 1 month expiration date) when GUSH will reach ~4x from the bottom [whatever that bottom will be].
For example, if GUSH will fall down to $0.30 in the next several days, then I will start selling GUSH CALL options when GUSH will come back up to $1.2

GUSH also plans reverse split on March 23, 2020 (40 shares will be exchanged to 1).
That will make selling options more convenient.

Do I sound like a crazy gambler to you?

1) After yesterday Craze on the stock markets, GUSH dropped further from $0.95/share down to $0.75/share

2) I missed that $0.75/share opportunity and bought 7,000 more GUSH shares in $0.97/share ... $1.00/share range, while chasing bull rally at the end of the day.

3) DRIP (3x Bear Oil&Gas ETF) is inverse to GUSH (3x Bull Oil&Gas ETF)
Normally, drop in DRIP should be ~equal to growth in GUSH.
However today DRIP dropped 23.89% while GUSH grew only 5.26% (see graph).
Most likely, that discrepancy was caused by delayed adjustment from yesterday, when GUSH dropped ~5x (way too much for 3x ETF).

4) I calculated, that yesterday GUSH 5x+ drop caused huge GUSH decay.

On 2020-03-09 GUSH went from $5.06 down to $0.95
That is 5.326x drop.
Which corresponds to 0.188 multiplication factor.
That corresponds to 0.729 drop in the underlying index SPSIOPTR (without 3x multiplication).
If the underlying index gradually returns back from 0.729 to 1.000 (from 1,706.360 to 2,340.720 that SPSIOPTR had on 2020-03-06), then it will be 1.371 increase in the underlying index.
That will correspond to 1.371 ^ 3 = 2.579x increase in GUSH price (assuming no GUSH decay on the way back up)

So 2020-03-09 GUSH decay was: 5.326x / 2.579x = 0.484 (more than 2x irreparable GUSH value loss).
Such huge single-day decay is very unusual.
The only comparable single-day decay I recall was with VIX-tracking bear ETF-s, such as SVXY on 2018-02-06

5) Considering that GUSH decayed more than 2x yesterday, it is a bit optimistic to expect GUSH to recover back to $134 level.
Still, if SPSIOPTR returns back from 1,718.51 (2020-03-06) to its maximum level 9,536.81 (2015-04-30) - it will be 5.54x price increase. Assuming no decay in GUSH, ideally GUSH may grow 5.54x ^3 = 170.90 times from $0.95/share level.
Which is $0.95 * 170.90 = $162.36