It always blows my mind how complex tax issues are relative to the stupidity of legislators. And while its tempting to just assume the complicated rules are always for the benefit of the rich and powerful, that hasn’t been my experience. Like obviously rich people are constantly pushing the envelope but if the IRS wanted to do tax giveaways, they would just do it. In my experience most “tricks” require a ton of work and oversight to take advantage of, and usually include an actual tradeoff like giving up control of the money the taxpayer is trying to not pay taxes on.
There is definitely some agency affect here, like large accounting firms and professional organizations advocate on behalf of their clients, but oh look the solution tax advisors recommended to legislators and that was adopted into law requires rich people to pay tax advisors lots of professional fees to get the benefits. Huh.
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I don’t believe there is really any way to know how markets are going to react any more. I mean I was completely sure that the market was going to crash soon in February, which it did in March. And also completely sure that it wouldn’t recover fast, which it also did. I still made out fairly well by changing my allocations in February and buying back into the falling market, but I missed the bottom and it recovered so fast that I didn’t do as well as I could have.
For now on I’m sticking with 60/40 with a good chunk of the 40% in TIPS and short treasuries, and I’m done trying to guess what the markets do. The powerful people that control things want the markets up so I feel pretty safe assuming that the markets will always recover. (And if they don’t it’s because the entire shithouse went up in flames and our asset allocations wouldn’t have mattered anyway.)
I see futures again are extremely bullish in the wake of more lockdown potential
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We are now 7% above pre-covid highs
Wall Street gonna be looking to produce a pandemic every year now
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Can someone explain to me why my MRNA calls with a 1/15 expiry are down 18% today??? MRNA is trading up 7-10%.
Calls are at a strike price of $130, stock is trading at $95-100.
When did you buy them? IV crush most likely
I bought them in early summer. But I’m saying they’re down 18% today vs yesterday. Not compared to when I bought them.
IV dropped. For example - on TSLA there’s days where option prices go up because IV is so high but the stock is tanking.
So basically people bought options ahead of the anticipated news, and now they’re selling them?
I think it has more to do with the expected distribution of outcomes. People writing the options want a higher premium with more volatility because there’s more risk is my understanding. Someone else can certainly explain this better than me.
Not at all an expert, but what I would guess is that when you bought them, an enormous move must have been priced in; IV was likely very high due to uncertainty. MRNA is up 10% today, but its still basically at the same price it was when it spiked up in July. Think of the vaccine announcement today like it was earnings; MRNA beat earnings and is up, but the calls you bought were pricing in a MASSIVE beat. There are (likely? no idea) no other big uncertain events/catalysts for MRNA between now and when your calls expire, and your calls are very OTM, so they got IV crushed.
Note that MRNA also ran up from 65 before the announcement today, so its up like 50% in the last couple weeks.
Anyone been following PSTH, Ackman’s SPAC? This dude just bought $400 mil and its up 3%+ on the news (i assume thats why its up?) https://www.cnbc.com/2020/11/16/seth-klarman-is-betting-big-on-red-hot-spacs-picking-up-shares-in-ackman-and-beanes-new-deals.html
FOMOed into some shares/warrants and some 12/18 25c which had some decent volume i saw on options flow
wow btc bout to break 17k?
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Right, but that’s looking back to my initial investment. Like a while back I bought $500 worth of MRNA calls at a $130 strike with a 1/15/21 expiry. Yesterday they were worth $315, today they dropped on the news to about $260. Now they’re back up to $310.
Meanwhile MRNA went from $89 yesterday to $95 to $100 today.
Now if the logic is that the options were already pricing in a 95% effective vaccine, I guess that makes sense price movement wise… But like they got about the best news possible today and dropped. Were investors expecting a 100% effective vaccine? Maybe one that makes you lose 20 pounds of belly fat? Like I still don’t get the movement in the last 24 hours.
I get why it’s still down versus the initial price - there were possibilities of better timelines than the one we’re on, and we missed those. But I don’t get why it’s not up on the vaccine news today.
The simplest way to thing about it is that the chance Moderna ever gets to your strike price went down today. As you said they got about the best possible news today and the stock only went up 10% or whatever.
You see this happen a lot around earnings. A small beat and a small increase in the underlying stonk price results in calls tanking because the volatility causing event is over.
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Oh ok, that makes sense. I think they’re wrong, but it makes sense.
Although their next earnings report isn’t until after 1/15, so I may have fucked up and bought one expiry date too soon. (I originally bought 10/15 and 1/15.)
Options with an April expiry and a $135 strike are more than twice as valuable now.
Right idea, wrong execution back in the summer I guess.
I’m in a bunch of SPACs but not PSTH yet. It’s got a lot of smart money behind it. Guggenheim has 500m stake and it’s their biggest holding. I’m scared he’ll go for something unsexxy like Menards but if he snags stripe… wow.
I think shares are better value than options because you get 2/9 of a warrant if you hold through merger. Warrants are essentially 5 year $23c for one share each.
I think that’s part of it.
Pfizer ran up from like 36 to 42 on its announcement and it gave back 90% of its gain since. They are at 37 right now. I’d imagine investors are concerned that Moderna could follow suit and aren’t confident that the price could hold for two months during these times.
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That makes sense too, Moderna has skyrocketed off past good announcements and then given most back. I do think Pfizer and Moderna are quite different here. Moderna is a $35 billion company and about 80% of its value, at least, is speculatively tied to the COVID vaccine. Pfizer is a $215 billion company trading below where it was on 1/1/20.