Whos buying in the dip ?
- Thread starter renovator
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unfunkable
Active Member
btfd!
Remember the million dollar short
Silver Options Trader Bets $1 Million on Price Drop by July
http://www.bloomberg.com/news/2011-...rader-bets-1-million-on-37-slide-by-july.html
Silver Options Trader Bets $1 Million on Price Drop by July
http://www.bloomberg.com/news/2011-...rader-bets-1-million-on-37-slide-by-july.html
projack said:
So he's screwed if silver doesn't go below $25 by then?
Who's buying the dip?
According to Zerohedge, APMEX is trying to
http://www.zerohedge.com/article/ap...s-buy-any-quantity-silver-clients-3-over-spot
Source: www.zerohedge.com
According to Zerohedge, APMEX is trying to
http://www.zerohedge.com/article/ap...s-buy-any-quantity-silver-clients-3-over-spot
Source: www.zerohedge.com
heyimderrick
Active Member
Watch for volatility when US markets open. Margin requirements raised 9% by CME effective after business close on April 26. You may get a better buying opportunity in a day or two.
BigBen
New Member
heartastack said:
Not exactly.
He basically can sell those Silver $25 PUTS anytime he wants "up and until the expiry day in July, when they expire to be worth nothing", if the price starts to go down. See PUTS increase in value as price goes down, so you can use them to profit just like shorting.
Put it like this (pun intended
)Short Silver, Sell $100,000 worth silver ETF contracts and be exposed to $100,000 risk. Buy $3000 worth Silver PUTS and have exposure to $100,000 worth silver, the max you can lose is 3%.
A PUT gives the buyer the right to sell someone blocks of 100 shares in stocks or commodoties at a specified price and at a specified date.
If you dont own the shares or commodity, then you can simply sell the put to someone else for a profit if the price in that stock or whatever has fallen.
I have a freind who made a few million as he bought shitloads of S+P 500 index PUTS after the twin towers got hit. The next week the markets tanked 15%. He had exposure to millions of dollars worth, just like shorting. He then sold those PUTS, or insurance as they are called and that was that.
Understand?
I cna give you a bried lesson on Options if you like.
BigBen said:heartastack said:
Not exactly.
He basically can sell those Silver $25 PUTS anytime he wants "up and until the expiry day in July, when they expire to be worth nothing", if the price starts to go down. See PUTS increase in value as price goes down, so you can use them to profit just like shorting.
Put it like this (pun intended
Short Silver, Sell $100,000 worth silver ETF contracts and be exposed to $100,000 risk. Buy $3000 worth Silver PUTS and have exposure to $100,000 worth silver, the max you can lose is 3%.
A PUT gives the buyer the right to sell someone blocks of 100 shares in stocks or commodoties at a specified price and at a specified date.
If you dont own the shares or commodity, then you can simply sell the put to someone else for a profit if the price in that stock or whatever has fallen.
I have a freind who made a few million as he bought shitloads of S+P 500 index PUTS after the twin towers got hit. The next week the markets tanked 15%. He had exposure to millions of dollars worth, just like shorting. He then sold those PUTS, or insurance as they are called and that was that.
Understand?
I cna give you a bried lesson on Options if you like.
thanks.
if you dont mind saying how do you buy/sell puts? ig markets? cmc? someone else?
cheers
We have a dip but no one is dropping their prices for physical
Spot is under $42 and I paid $960 for a roll of ASE today.
I am willing to pay $50 for NWO rounds (that's right, rounds) and the vendor hasn't agreed to sell them to me at this stage.
Be very interested to hear from anyone who managed to pick up cheaper silver during this dip
Spot is under $42 and I paid $960 for a roll of ASE today.
I am willing to pay $50 for NWO rounds (that's right, rounds) and the vendor hasn't agreed to sell them to me at this stage.
Be very interested to hear from anyone who managed to pick up cheaper silver during this dip
BigBen
New Member
First off ill explain Options and what they are.
An Option is simply a financial instrument 'derirative' like a CFD that tracks the price of the stock or commodity it represents. Options in Australia are sold to represent 1000 shares of the underlying it represents. In america they are sold to represent a block of 100, so they are easier to trade in the US.
Now:
There are two types of options. And remember, there is a buyer and a seller of each type of option.
CALL options
PUT options.
To help you remember, think of a phone call, CALL up, PUT down.
CALL option - Gives the buyer the right, but not the obligation to buy 1000 shares of the underlying at a specified price until a specified time "expiry"
Now i can sense the confusion for the price and time part, i will explain.
Say it is the start of MAY, and i think BHP shares might go up alot this month as they are currently $45, but dont want to invest $45,000 to buy 1000 shares in case they fall in value alot, or i just dont have that cash free. Instead, i buy a CALL option that expires at the end of May with a strike price of $45. Because this option strike price is currently spot on the share price the option will be expensive, as any move up means the option gains in value significantly as well. You could choose to buy, say a BHP $47 CALL, this would be much cheaper but would need a much larger share price move for the option to gain in value. So when buying or selling options you choose how many months you want them to last for, and at what price 'strike. Now this CALL option might cost us $1400, which we lose if the price hasnt moved above $45 by the end of May. As options lose value of time.
If BHP was say $49 half way through the month, you could either sell your CALL option and make a nice profit, probally a few thousand dollars, pr ypu can exersize your option and make the person who sold it to you, sell theyre 1000 BHP shares to you at $45, as to the terms of the option contact.
PUTS are just reversed. They give the buyer the right, but not the obligation to Sell 1000 shares of the underlying at a specified price and until a specified time "expiry"
You can buy/sell options using Westpac, commsec ect, but not much liquidity on Aus options. IG you can as well but only on metals, energy and index's. I use Interactive Brokers, american company, very big and great liquidity.
I have bought and sold severl SPY puts, hoping for a S+P 500 pullback to 1250 by July.
I really need to sit you down to explain them, took me ages to finally graps the idea when i was taught. I thought i knew, but had to keep looking at the defenitions, after a couple months it was second nature.
An Option is simply a financial instrument 'derirative' like a CFD that tracks the price of the stock or commodity it represents. Options in Australia are sold to represent 1000 shares of the underlying it represents. In america they are sold to represent a block of 100, so they are easier to trade in the US.
Now:
There are two types of options. And remember, there is a buyer and a seller of each type of option.
CALL options
PUT options.
To help you remember, think of a phone call, CALL up, PUT down.
CALL option - Gives the buyer the right, but not the obligation to buy 1000 shares of the underlying at a specified price until a specified time "expiry"
Now i can sense the confusion for the price and time part, i will explain.
Say it is the start of MAY, and i think BHP shares might go up alot this month as they are currently $45, but dont want to invest $45,000 to buy 1000 shares in case they fall in value alot, or i just dont have that cash free. Instead, i buy a CALL option that expires at the end of May with a strike price of $45. Because this option strike price is currently spot on the share price the option will be expensive, as any move up means the option gains in value significantly as well. You could choose to buy, say a BHP $47 CALL, this would be much cheaper but would need a much larger share price move for the option to gain in value. So when buying or selling options you choose how many months you want them to last for, and at what price 'strike. Now this CALL option might cost us $1400, which we lose if the price hasnt moved above $45 by the end of May. As options lose value of time.
If BHP was say $49 half way through the month, you could either sell your CALL option and make a nice profit, probally a few thousand dollars, pr ypu can exersize your option and make the person who sold it to you, sell theyre 1000 BHP shares to you at $45, as to the terms of the option contact.
PUTS are just reversed. They give the buyer the right, but not the obligation to Sell 1000 shares of the underlying at a specified price and until a specified time "expiry"
You can buy/sell options using Westpac, commsec ect, but not much liquidity on Aus options. IG you can as well but only on metals, energy and index's. I use Interactive Brokers, american company, very big and great liquidity.
I have bought and sold severl SPY puts, hoping for a S+P 500 pullback to 1250 by July.
I really need to sit you down to explain them, took me ages to finally graps the idea when i was taught. I thought i knew, but had to keep looking at the defenitions, after a couple months it was second nature.
BigBen said:
Not quite... if you went long $100k silver, then you would be exposed to a maximum loss of 100k... If youre shorting, then your downside is unlimited, and your upside is 100k (if silver drops to 0).
A better way to actually talk bout risk is the change in your porfolio as a result of a $1 move in the underlying... For those of you familiar with options, that is the delta.
Hmm, there is some commentary out there that suggests the USD will strengthen over the next few years, and that people should liquidate longs... I can't say I'm convinced just from the weekends events. We'll see how things unfold this week.. AEL is right, the price of physical remains up at this stage, so the dip is yet to follow methinks...
Or it could be the scotch talking...
Or it could be the scotch talking...
projack said:
May or may not be true.
Also if JPM is losing large amounts of cash already, than it pays to do a trade like that and to try to scare off the buyers !