people were literally throwing money like those games in 2020 and 2021, which made 2022 easy cause it all had to come back, yes I’m an idiot for not getting retired off it cause I was doing other stuff
maybe not in 2023, we’ll see though there’s always going to be something
I’m saying some trades are as easy as beating low stakes poker during the boom.
This has always been true. The dotcom bubble involved a lot of very stupid retail investors with FOMO buying stocks in companies they knew nothing about. The important observation is that it’s extraordinarily difficult to make money in the market even when it is “obvious” that retail dumbasses are doing dumbass things. It’s not just a matter of knowing that a market is “irrational”, you need to know when it’s going to stop being irrational and the track record of people trying to forecast that is abysmal.
In the case of your example (BBBY), what’s the easy trade? This is a good faith question . I’m interested in the particulars of it (types of accounts needed, transaction costs, margin requirements, etc).
isn’t it as simple as when it’s all over the media you sell
yes I know there’s plenty of examples of people who went broke shorting too early and TSLA was hard to time I avoided it specifically cause I didn’t know
but I don’t think it was difficult at all to realize that people weren’t going to use peloton as much once you could go outside again and the free money train wasn’t going to go forever hell I thought about selling all of my crypto when all the dipsticks were bragging about it, and of course I only sold some of it, oof but that is something I’ve always had an issue with, not always going through with stuff I think like that
there are some stocks I’m buying to hold, but I do think there’s better strategies out there but I’m not feeling anything right now other than usually this sort of time is buying time cause more people are pessimistic than optimistic (wouldn’t be surprised at all if buying/selling timing just that crushed buy and hold but I ain’t gonna dig out that data) which could just be a bull trap move of course cause it’s hard to get bullish with still rising prices, it’s simple demand/supply like everything else
or the dollar goes to shit then it all skyrockets cause people then would shove cash everywhere they can
the problem with long term is that I like most people think the US is in the decline phase predictable though, it always cycles in pretty much the same way psychology wise
I only mentioned today’s BBBY earnings as an example of how dumb the market / its participants can be (which is what allows for some easy trades). There were a few easy plays in BBBY, the most recent being to short it a few months ago when Ryan Cohen sold, during the 24-hour window when the WSB crowd was in denial that he sold. At that point, the stock was the coyote having just chased the road runner off a cliff. When it comes to the present, I think a fairly easy play is to buy a put option expiring in enough time for the company to be bankrupt by then. There are no shares available to short right now, but if any become available then that’s a play too, though I expect high volatility until the delisting.
Shorting GME is still an easy play, and the threat of random large pumps is mostly gone. The cultists are running out of things to hype as potential catalysts. They’re running out of places to move their goalposts to as every one of their many predictions the past two years has been wrong. The cult membership is shrinking and some are running out of money. The stonk doesn’t have the same energy it used to.
The same can be said of AMC. The time to short these tickers was forever ago, but they’re still good shorts now imo. AMC is next in line for bankruptcy after BBBY. But if I were gonna open a new short now, I’d wait until after the Thursday CPI.
Not every easy play involves a meme ticker, but most of my current plays aren’t what I’d call easy. Bear in mind the paper we were commenting on is about professional traders, which definitely isn’t me, and if someone like me has been able to find easy plays (and without much effort) then I’d bet they regularly find many more. But I don’t know how much of what they do is exploitative and how much is GTO. From what I skimmed of the paper, the authors based their conclusion on a toy experiment. But just because success in the Guessing Game predicted success in the Trading Game doesn’t mean those people’s real-market trading is akin to the Guessing Game, so I’m not sure how much the paper really tells us. I’ll give it a full read another time.
Admittedly, the 3 plays I mentioned here are just fundamentals plays. But in the past, when eg GME was pumping, the play was to forget about fundamentals, buy, and sell to a greater fool. Unlike normal tickers, the pump was telegraphed at every step of the way by people announcing exactly what they were gonna do. And there were plenty of greater fools to provide exit liquidity. Unlike say Dogecoin, where I assume everyone trading it knows it’s just a game of hot potato, GME/AMC/etc all had (and still have) true believers.
To your other question, for shorting you need a margin account and your broker’s approval to make shorts (which I’m guessing doesn’t come standard). Margin requirements vary by ticker; I don’t pay attention to them so I don’t have a ballpark figure off hand. I keep my leverage below 1 anyway. If it’s above 1 you’ll pay a small interest on the loan. Other than that and commission, there are borrow fees for each stonk you short, which regularly change even after you’ve already borrowed the shares. The size of the fee is a function of how heavily the stonk is shorted.
For buying puts/calls I think you just need Level 1 options approval. I have yet to buy any (though I should have at least once), but the transaction cost is the premium you pay to the writer, plus whatever fee the broker gets.
So something like this: BBBY240119P00001000 (BBBY240119P00001000) Stock Price, News, Quote & History - Yahoo Finance or BBBY250620P00001000 (BBBY250620P00001000) Stock Price, News, Quote & History - Yahoo Finance ?
-200 that BBBY is zero by end of Jan 2024? Alternatively, -400 that is zero by end of June 2025?
What do you think the correct price is for those bets?
AMC topped out the week the “to the moon” clip with the women dancing holding each letter. Doge topped out the second Elon musk went on SNL and bullshitted about circulating supply and such. There wasn’t anything left to top that. Same with bottoms. They tend to hit when there’s nothing left worth buying stock in.
Simplistically, it’s just the aggregate of everyones collective opinion on the value of it and ending up being the opposite of it as a trade.
go figure one of the good stonks to buy was declining ratings wrestling company
(rumors are the saudis bought it)
Yes, the study actually shows the opposite of what it purports to show. Basically, they created a simplified financial instrument. When the unsophisticated students traded it, their profits were tied to how smart they were and how well they could figure out how to value the financial instrument. But when you take a bunch of people who spend all day valuing financial instruments, they all understand the fundamentals and the only observable source of difference is how good they are at strategically masking their own private information and ferreting out others’. It doesn’t demonstrate that analysis of fundamental value wouldn’t play a role if there was nontrivial fundamental value analysis to be done. All it shows is that you can’t be a professional trader at all if you don’t clear a certain bar for understanding fundamentals.
What if you look really good in bright red suspenders and you’re really good at yelling FUCK into a phone? In the movies those guys are the best traders.
must be nice just being able to blow 175 million where absolutely nobody bothered to look at anything
the first thing I do is to make sure I’m not getting BS’d in business stuff like that but hey what do I know
they’re right it was bullshit but you’re also a bunch of absolute morons who should all be fired so
Man with this inflation report the fed has to chill.
Theyre going to go down to 25 bps hike. They arent going to chill though. They have to crack the job market and cant let risk-on happen so either higher for longer or they’ll just grind up 25 at a time for awhile unless risk markets stay soft and we start to see some pain in labor market.
Yup - WSJ:
Some economists worry that rapid wage growth could keep consumers flush with cash
The horror.
We are truly at the stage where “control inflation” means “whip the uppity workers who are a little too full of themselves, IMO”.
BBBY is up like 75% since we talked about what an easy trade betting their stock to go down is