dennisgorelik: 2020-06-13 in my home office (Default)
In the last few days stock market panicked about potential invasion of Russia to Ukraine.
I decided to find out who is spreading this panic.
I found that the primary source of the panic is Jake Sullivan.
He was born in 1976-11-28, so Jake Sullivan is half a year younger than me and about the same age as Putin was when he became the head of the Federal Security Service.
https://en.wikipedia.org/wiki/Jake_Sullivan#Biden_administration
On November 22, 2020, Sullivan was announced as President-elect Joe Biden's choice to be National Security Advisor.
Jake Sullivan serves as a National Security Advisor for 1.5 years already.
https://www.usatoday.com/story/opinion/2021/08/16/afghanistan-disaster-why-bidens-foreign-policy-team-failed-america/8145997002/
Biden wanted out of Afghanistan. It was on Sullivan to figure out how to achieve the president’s goal while ensuring we avoided potential pitfalls and problems. That’s clearly not what happened.
This is what Jake Sullivan said about potential Russian invasion to Ukraine:
https://en.wikipedia.org/wiki/Jake_Sullivan#Biden_administration
On December 7, 2021, Sullivan warned that Russia's Nord Stream 2 natural gas pipeline project will end in the event of Russian invasion of Ukraine.[39]

On January 14, 2022, Sullivan accused Russia of sending saboteurs into Ukraine to stage "a false-flag operation" that would create a pretext for Russia to invade Ukraine.[40] Russian Foreign Minister Sergey Lavrov dismissed the U.S. claim as "total disinformation."[41]

On February 11, 2022, Sullivan publicly warned about the likelihood of a Russian invasion of Ukraine prior to the end the 2022 Winter Olympics, urging all Americans to leave Ukraine immediately and indicating that there may be "no prospect of a U.S. military evacuation" once the invasion commences.[42] He claimed that "Russia has all the forces it needs to conduct a major military action."[43] Ukrainian President Volodymyr Zelensky said that warnings of an imminent Russian invasion are "causing panic and not helping" and asked for firm proof that Russia plans to invade Ukraine.[44]

Jake Sullivan claims remind me claims of Bush W crew about "weapons of mass destruction" in Iraq in 2002-2003. Somebody else was connecting the same dots:
https://www.npr.org/2022/02/11/1080164367/russia-ukraine-invasion-olympics-sullivan?t=1644670750017
Asked about past U.S. intelligence estimates that were proved wrong, including in the runup to the Iraq War, when Bush administration officials claimed that Iraq possessed weapons of mass destruction, Sullivan said things are different this time.

"In the situation in Iraq, intelligence was used and deployed from this very podium to start a war. We are trying to stop a war, to prevent a war, to avert a war," he said.
I think that Jake Sullivan prediction that "Russia is about to invade Ukraine" - is a false alarm.
Even if Putin will invade Ukraine, it is unlikely to happen now when everyone is watching.
dennisgorelik: 2020-06-13 in my home office (Default)
FB fell 21.58% from $323 at market close today 2022-02-02 16:00 to [$249.05 bid ... $249.25 ask] now (20:32)
Most of the fall happen in the first 3 minutes.
FB did not see $249.05 price since January 2021 (for 13 months).

FB fell because Facebook "Earnings per share" missed analysts expectations by 4.5%:
===============================
https://finance.yahoo.com/news/meta-q4-earnings-2021-161355797.html
                                      Actual  Expected
Revenue                               $33.67B  $33.4B
Earnings per share                    $3.67    $3.84 
Ad revenue                            $32.6B   $32.5B
Facebook monthly active users         2.9B     2.9B
Meta app family monthly active users  3.5B     3.5B
===============================
I think market overreacted about this Facebook miss.
But it is possible that investors were already nervous about this "Metaverse" transformation of Facebook.
My interpretation: Facebook spends more in order to grow faster.
Investors, probably, do not like that risk of fast growth of unproven technology.

Especially, considering, that the Fed plans to raise interest rates in March 2022 (about 7 weeks from now).

What do you think: would it be reasonable to buy FB call options in the morning?

FB at-the-money CALL options that expire in couple of days (FB220204C250) sell at 1076.45% Implied Volatility [70.90 bid ... 75.50 ask]
Such high level of Implied Volatility is comparable with Implied Volatility of GME at the height of the meme craze.
dennisgorelik: 2020-06-13 in my home office (Default)
This trading day looks like tech geeks buy their stocks during the day, but are afraid to hold these stocks overnight.

https://www.google.com/search?q=stock%3Afb
dennisgorelik: 2020-06-13 in my home office (Default)
1) I own 550 UAL shares on my IRA account.
Today UAL grew enough for me to decide to sell covered CALLs on these UAL shares.
So these CALLs sold:
~~~
SOLD -5 UAL 100 20 NOV 20 43 CALL @1.50
~~~
That means $750 premium collected to my IRA account.

Most likely, these UAL CALLs I sold - will expire worthless (2020-11-20), as usual.
UAL is at $41.12/share now (UAL is unlikely to be above $43/share strike price in 11 days).

2) I think markets are overoptimistic today (due to optimistic news from Pfizer about Covid vaccine).

3) Today my FAZ PUTs sell order that I created few months ago - also executed (because FAZ suddenly dropped ~20+%).
dennisgorelik: 2020-06-13 in my home office (Default)
Don't Worry, Be Happy song was written during the fallout from October 1987 financial crisis (that developed as rapidly as the crisis we have now in March 2020).


Thanks to [personal profile] formview for the reminder.
dennisgorelik: 2020-06-13 in my home office (Default)
The remaining piece of my sanity suggested to me, that I have to sell the rest of GUSH at market price -- and just cut losses.
I do not work with that 3x instrument correctly and do not have right temperament to do that.

So I sold the rest of GUSH at ~$0.56/share
I could have sold at better price, and possibly, GUSH may still grow 3x from the current price in the next few days.
But that does NOT matter.
I should not use 3x instrument as an investment.

Instead of GUSH - I bought United Airlines at $32/share.
That is my long-term bet that Coronavirus concerns are seriously overblown and people will start flying again after the panic will subside.
How long will it take people to calm down - I do not know. May be several weeks, may be several months. But with long term stock investment - that does NOT matter.

BTW, GUSH went down today in spite of S&P 500 going up.
That is, probably, the compensation for GUSH going up yesterday when S&P 500 went up.
dennisgorelik: 2020-06-13 in my home office (Default)
~~~~~
https://finance.yahoo.com/news/federal-reserve-cuts-rates-to-zero-restarts-quantitative-easing-qe-210001968.html
But the Fed on Sunday slashed rates by 100 basis points, less than two weeks after it had already made an impromptu 50 basis point cut.
~~~~~

1) I think that this sudden rates cut is too extreme.
I agree with "Cleveland Fed President Loretta Mester, who supported all the actions but preferred only a 50 basis point cut to a target range of between 0.5% and 0.75%."

2) That interest rates cut also benefits my risky GUSH purchase.
I should, probably, use tomorrow market growth and sell some of my GUSH shares.

3) Friday's sudden 10% growth in the last 20 minutes of trading (15:40 EDT ... 16:00 EDT) -- most likely explained by the leak about impending Federal Reserve Interest rates cut.
dennisgorelik: 2020-06-13 in my home office (Default)
GUSH started at $0.71/share (31% down) today and drifted a bit down.
I bought 348 GUSH shares at $0.60/share

I would like to see +6% ... +8% GUSH price increase every day for the next 2 weeks.

Would something like that happen?

Update [17:24 EDT]:
Unfortunately, instead of modest gain of 6% - 8% I was hoping for, GUSH rose +43.33% today up to $0.77/share
That high volatility makes me scared.
If on Monday there will be another jump like that - I may consider selling GUSH CALL option earlier than I planned.
dennisgorelik: 2020-06-13 in my home office (Default)
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?
dennisgorelik: 2020-06-13 in my home office (Default)
Craze continues.
GUSH dropped 27.52% today.
I bought 15,000 GUSH in the range of [$0.69 ... $0.734] per share.

My rationale is that "World Health Organization declares virus a pandemic" -- sounds way more scary than it, actually, is.

"Pandemic" - means that disease had spread to 3 or more countries. That does NOT mean that catastrophic number of people die.

So, I think, after several days/weeks general public will calm down and investors will start buying again.
dennisgorelik: 2020-06-13 in my home office (Default)
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
dennisgorelik: 2020-06-13 in my home office (Default)
GUSH is 3x bull ETF for Oil&Gas.
2019-04-22 GUSH price reached $134/share.
That was 10 months ago.
Today I bought 7,660 GUSH for $1.30/share
An hour later, GUSH fell further down, and I bought 19,576 GUSH for $1.08/share.

Then GUSH fell again down to $0.95/share but I did not have free cash to buy more.
If I will be able to buy GUSH tomorrow and such a low price -- I would buy GUSH again.

What do you think: will GUSH 1 week from now cost more or less than today?

Profile

dennisgorelik: 2020-06-13 in my home office (Default)
Dennis Gorelik

June 2025

S M T W T F S
1234 567
891011 12 13 14
15161718192021
22232425262728
2930     

Syndicate

RSS Atom

Most Popular Tags

Style Credit

Expand Cut Tags

No cut tags
Page generated Jul. 3rd, 2025 08:00 am
Powered by Dreamwidth Studios