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Greed is Subtle

The morning alarm woke up Ghen. With an annoyed sigh, he stretched out his arm and silenced the foul-sounding chirps. Slowly sitting up in bed, he let out a deep yawn and got to his feet.
Running a couple of chitinous fingers along his antennae to stimulate them to life, he made his bed and then went to his closet. Today was a work day, so he needed his suit. Once the pants were on, he stretched out his wings so that he could button up the shirt, then relaxing them once all the buttons were secured.
Dressing for the day was done, now for the morning meal. Entering his kitchen, he took out the chilled leftovers of the evening meal last night and popped it into the radiator, first defrosting and then slightly cooking it.
During that process, he also fished out a ceramic cup and placed it in his brewer, serving himself some synthesized caffeine. His idle thought led him to being amused that, when eaten directly off a plant, it has a concentration that could kill him three times over. But after going through some refinement and roasting, all it does is make him hyper.
Once the meal was put together, his plate of heated leftovers and a cup of almost-piping-hot cup of Xia's, he took his time to enjoy it. His communicator vibrated. When he looked, he found it was from his boss.
"Hello?" Ghen answered.
"Ghen, the meeting's been moved up to a few minutes from now." His boss, Xkik, announced. "Apparently higher up has something important they want to say. We have a terminal ready for you, I'll message the login details."
"Wha-, what's so important?" Ghen asked in bewilderment. "Did a water line rupture or something?"
"No, nothing like that." Xkik replied with a slight chuckle. "It's actually about the rumors we've been hearing. That human corporation wanting to acquire us? That's what they're talking about."
Ghen could feel everything inside his thorax drop to the floor. "That must mean it's true then, right? Did we get sold off by the Queen to this company then?"
"Show up to the meeting and you'll get your answer." Xkik said simply. When he finished, Ghen got the notification on his communicator. There's the login details, allowing him to remotely attend the meeting. "They're about to start, hurry up."
Once Xkik disconnected, Ghen worked fast to login and set up the remote viewing. Once everything was done, his screen started transmitting the meeting room. It was already packed. And off by the main board, he saw his answer. There was a human, resting against the wall on his two legs. Standing right in the center of everyone's view was the coordinator, Tizx, watching the clock periodically.
As soon as the meeting's start time was reached, the coordinator began. "Alright everyone. I realize that this was rather short notice, so I want to say how appreciative I am that you made it. Now then, let's just get right to it. For some time now, many of you have been hearing rumors that a human corporation has been interested in us. Why? We never really knew. We're just an organization responsible for finding, extracting and providing water to the colony here all under the direction of the Queen herself. Well, as of now, I have the answer for you. Why don't I let Ryan say that?"
Stepping back, Tizx motioned for the human, Ryan, to take over. With a nod, Ryan practically bounced over and then took the position. "Good morning to you all. I hope my Zazk is passable, heh. Anyways, the answer to those rumors, is yes. Terran Galactic Company is indeed interested in you all. Which now leads to me. I'm here to announce that, effective yesterday evening, this water company is now a subsidiary of Terran Galactic Company, under the name of Zilia Water Delivery."
Many other sub-coordinators broke into hushed conversation, no doubt speaking their thoughts with each other about this move. Ghen could only wonder if this was even a good thing. What will the humans do? Will he still have his job? Will he have to learn how to deal with the ruthless humans?
"Now, I am well aware this is quite the...uh, change." Ryan continued. "That's why I'm happy to inform you that, no, nothing negative or detrimental will happen to you. You just have new people to answer to. Operations will continue as normal, everybody here will still keep their jobs. The only real change any of you will personally experience is that Coordinator Tizx here will now report to someone else. On behalf of the Terran Galactic Company, we are extremely excited and are looking forward to working with you all. Thank you for your time."
A week later.
At least Ryan wasn't lying. After the initial shock wore off, things went back as they normally did. There were no terminations, no reductions in annual pay or anything. Nothing really changed. At least until this new meeting was called. Ghen was at the worksite this time, so he took his seat and watched as, once again, Ryan led the meeting.
"Hello again, everyone!" He said cheerfully, his Zazk noticeably improved. "I hope I didn't end up looking like a liar, right? Everything's still normal, all that?"
All the zazk in the room confirmed, providing comments to their pleasant surprise as well as lingering thoughts.
"Awesome! Awesome." Ryan said jubilantly, his fleshy mouth revealing his bone-white teeth. "Now then, you're probably wondering why I'm here again, right? Well, I got another fantastic piece of news for you all! Two, actually. I'll start with the first: Zilia Water Delivery has just completed its IPO. The company is now publicly traded!"
Ghen and the others voiced their confusion, having no idea what in the name of the Queen Ryan was talking about. What was Ryan talking about? What's an IPO? And why exactly is being publicly traded such a significant thing?
"Oh, you guys don't know any of that?" Ryan asked in surprised confusion. After everybody confirmed, he let out a quick huff as he began his explanation. "Well, to begin, IPO is short for Initial Public Offering. Basically what that means is that, before today, Zilia was privately held. Only certain individuals could buy and sell shares here. But now that we're public? Literally anyone can buy and sell shares in the company, hence us being publicly traded."
"Uh, what's a share?" Ghen asked, still completely lost.
"Oh, boy..." Ryan muttered under his breath before returning to his peppy image. "To simply put it, a share is short for having a share of ownership in a company. When you buy a share, you're buying a piece of ownership, and when you sell, you're selling that amount."
"So wait...if someone buys a share, they're a co-owner then?" One of the other team coordinators asked.
"If they get enough, yeah." Ryan nodded. "You need a lot though, and that really depends on the company. If I had to give an answer though? I'd say usually you need to have a lot more shares than a lot of people combined to be officially a co-owner, but we call that being a majority shareholder."
"And how do we do that?" Ghen asked, now growing curious but still not understanding why such a concept exists.
"Simple. Buy shares." Ryan said simply. "And that leads into the second piece of awesome news. Zilia's corporate has a product in mind, a premium-package of water delivery. Instead of the usual water that you pump out, filter and ensure its potable before delivery, with the premium package, not only will you get that, but you'll also get all of the required nutrients and vitamins the zazk body requires! And they feel you guys have the best expertise and understanding to pull it off! So, here's what we're offering as a good-faith bonus: A 25% increase to your annual salary as well as being given stock options."
Ghen wasn't sure about the second part, but the salary definitely got his attention, as well as everyone else's. Although his job was considered to have a good pay, Ghen isn't going to say no to a higher salary. In fact, he's been focusing his work on getting a promotion so he can come home with even more credits in pocket.
"What do you mean by stock options?" Ghen asked after some time.
Ryan let out that smile again, the one that revealed his teeth. "If you choose to transfer over to the new group, you'll be provided 50,000 shares in Zilia itself. Why's that awesome? Let me walk you through it. Right now, our last closing price per share was 3.02 credits. And if you have 50,000 shares during that time, you're sitting on 151,000 credits, if you cash it out immediately."
"And why shouldn't we?" One of the coordinators demanded in an ambiguous tone.
"Because the price per share changes a lot." Ryan explained promptly. "When we got done with the IPO? It closed at 2.73 a share. Right now? My money's on the closing price being 2.99 a share. However, we are extremely confident in this premium package being successful. If it does? Well, my bet is that the share price will skyrocket to 3.12 a share. If you hold those shares and the price gets to what my bet was? You'll instead get 156,000 credits. Just by holding onto them, you just made an additional 5,000 credits!"
"And what if we have more shares?" Ghen questioned, now getting excited at the prospect of free money.
"Even more money!" Ryan laughed a bit. "And don't forget about dividends, but that's for another time. The premium group is gearing up right now, we just need the workforce. If any of you wants in, I'll be back tomorrow with all the forms needed to make it official. Take the day and tonight to think it over, yeah?"
Everything else melted into a blur. Ghen was practically on autopilot that whole day. Was this the secret to the humans' incredibly massive economy? How so many of them have amassed so much money out of nowhere? All you had to do was just buy this share out of a company and you get more money without even working?
As soon as he got home, Ghen knew what he was going to do during the night. After feverishly looking through the galnet, now having the human race connected to it, he looked and gathered up as many books that were translated into zazk as he could find, all talking about the human economic system. The last time he undertook such an intensive study was during his primary education phase.
And during his search, he even found forums on the galnet that were completely dedicated to the human's economy. All of them talking about strategies on what company, or stock, to pick. How to analyze a company's performance to determine if it was worth the money, or it had potential to grow over time. And that was when he discovered the humans found another method to the extremely simple buying and selling process. There were humans and some other immigrated aliens who made five times what Ghen could receive over a simple month just by watching the share prices during trading hours, and then buying and selling them at the proper times.
Ghen's mind was just absolutely flabbergasted. He thought it was just some strange concept only aliens could make, but no, not with the humans. They've practically made their economy into an art or a science. No, not even their economy. Everything. If humans can see a way to make money off of it, they'll do it. And if there isn't, they'll look for a way.
Healthcare was monetized. Galnet services, transportation, shopping at the store, they even made all of their utilities into profit-oriented companies.
And it was there that Ghen paused, the realization slamming into him. Everything was monetized. Which means, if you don't have the money for it, you're not getting it. Right? Are the humans truly that ruthless? So obsessed with making money? To the point that they're willing to deprive their own people of the absolute necessities if it's a source of credits?
Ghen let out a scoff. There's no way. Nobody is that cruel and callous. He's never been to the United Nations. He can't rely on what a bunch of random people on the galnet says. He decided that from here on out, he'll only go as far as saying that humans are a little obsessed with credits, nothing more.
...
There he was. Ryan, sitting in the office provided to him. And there was a rather large line leading to him. Looks like word got around. Although, the line wasn't as large as he expected it to be. Maybe the others thought it was just a ruse? That there's no such thing as making free money by spending it on such a made-up concept?
Ghen only knows that, if it is a ruse, it's an extremely elaborate one, where all of the humans are in on it. And he believes that's just extremely ridiculous. At the end, if he's unsure, he'll just take the transfer for the very real increase in his very real salary. And although he spent a very good chunk of the night reading up on how humans do things, he's still going to play it smart. He'll leave his 50,000 shares alone and see where it goes from there.
"Good morning sir." Ryan greeted warmly once Ghen took his seat. "Now, name please?"
"Ghen." He answered, barely keeping his nerves down.
"Alright...and what's your position at this location?" Ryan questioned after scribbling on his form.
"I monitor the pumping stations near the extraction sites." Ghen explained, staying on point. "To be more specific, I check to see if they're in need of maintenance, as well as reading the flow rate that's determined by the calculators installed there. If there's too little for what's needed, I pump out more. And if there's too much, I pull it back a little."
"Nice...and how long have you been doing it for?" Ryan complimented with a nod.
"As of tomorrow, ten years." Ghen replied, voice quickly changing to minor awe once he realized that fact.
"Excellent. Do you have anyone in mind you'd like to replace you here?" Ryan questioned after another scribble. "If you don't have anyone, you're free to say so."
Ghen took a moment to think it over. A bunch of names went through his mind, but one stuck with him. "Tilik. He's just been accepted here, but he's learned quickly. Very attentive and he always catches something subtle. I think he'll do really well in my position, even better actually."
"Tilik, really?" Ryan questioned with a little shock, going through his completed forms. Ghen felt a short sense of panic in him. Did something happen, or was Tilik actually transferring? His answer didn't take long to reveal itself. "Right, Tilik was actually one of the first people to want to transfer here. He's actually requested to be part of the testing teams specifically. Do you have a second choice?"
"Um...no, actually." Ghen replied, feeling a little ashamed. "Tilik was my only choice, to be honest."
"Hey, don't worry." Ryan said assuringly with his hands raised. "Nothing wrong with that. Sometimes, there's just nobody up to snuff, right? 'Kay, so, last question. Is there anything specific you'd like to do when given the transfer?"
"If you need someone monitoring new pumps, I'd be happy to do that." Ghen stated.
"So basically same job but with better payoff, am I right?" Ryan grinned. "I hear you. Sometimes, we're just not paid enough for what we're doing. I know I think that sometimes. Uh, our secret, yeah?"
"Yeah, our secret." Ghen nodded, thinking it'd be better to have friendly relations with the human, just in case.
"Awesome. Back on topic, that's it." Ryan announced, placing the form on his pile. "We'll give you a call when you're accepted."
"Oh, uh, that's it?" Ghen questioned with a shrug in shocked surprise.
"What, expecting a question like, why do you want to transfer?" Ryan chuckled a bit as he leaned in his seat. "You can bullshit all you want, but we both know the answer. Sweet money and stock options. Not saying that's a bad answer of course, just that it's pretty obvious."
"I suppose it is." Ghen commented, realizing the point. "Also, you mentioned this...dividend? Is that for Zilia shares?"
Ryan laughed a little bit before nodding. "Yep, announced before I came here. About 0.43 per share. Want to know why that's awesome? Instead of waiting for the proper price to cash out your shares, now? The company pays you for each share you hold."
"A...Are you serious?" Ghen demanded, flabbergasted.
Ryan nodded with his now-trademark grin. "Dead serious. If you get the transfer, and get those 50,000 shares? A little head math...right, if you hold onto those, in addition to your salary, you'll now annually be paid 21,500 credits, if you keep it at 50,000 shares. Only you can decide to sell or buy shares."
Ghen just stood there silent and motionless, no idea of whether to believe it or not, to which Ryan just laughed. Once he walked out of the room, he managed to snap back to reality. Again, just focus on the very real pay-raise. He'll deal with the other parts later.
After he returned to his spot, he spotted Tizx approaching by his desk. The coordinator seems to be as casual as always.
"I saw you in that line a bit ago, Ghen." He said as he leaned on the desk. "Guess you're really taking that human's word?"
"I mean, I don't know about all this share business or what not." Ghen began with a shrug, his tone sounding a little defensive. "But I mean, having a bigger salary? Course I'm going for it when I can. And if all this magic credits turn out to be real? You realize we can live like the royal servants, right? Get the best cars, the nicest food and all that?"
"I'd be very careful, Ghen." Tizx warned in a sudden shift in tone. "Don't trust those humans. The way they just...obsess over money? Come up with more and more insane ways of getting credits? I don't know, it just makes my wings twitch."
"You think this is a bad idea?" Ghen asked with a little surprise at the change-in-demeanor.
"I think you should be careful, with the humans, and with what you're saying." Tizx replied, straightening his posture. "I wouldn't put it past those Earthmen to backstab you if it gets them a few more credits. And we all know how the royal servants get if any of us lowly commoners start thinking we can break into their circle."
"I hear you, I'll be on my guard, promise." Ghen stated with a nod. With a confirming nod of his own, Tizx returned back to his duty, walking past Ghen's desk.
Several weeks later.
Everything became so much better. Ghen got the transfer. He didn't need to relocate to a new residence either. And after he was walked through into learning how to manage his stock account, and seeing that new form of payment in his hands, he already felt as though he made the best decision. But it was only when he decided to take those shares more seriously that he became privy to what he was given. After receiving the dividend payment, and actually seeing it was real, valid credits after transferring it to his main bank account, all he could describe was the most powerful high he ever felt.
While his first thoughts were to buy himself a royalty-class car, some nicer furnishings for his home, or even a better home entirely, he ended up going the smarter route.
After going back to his stock account, he discovered that Zilia's shares rose to about 3.22 credits in price. Knowing that this was the easiest money he could ever make, he took all of his dividend earnings and bought more shares in Zilia, bringing him to owning 56,891.
And from his new regional coordinator, a human named Dylan, tomorrow is the grand release of the premium package. For just a monthly rate of 14.99 credits, the tap water will now include a sizeable portion of all nutrients and vitamins required in the zazk physiology. Still, Ghen has to admit. He's not entirely sure why anybody would want such a thing, if they'd even go for it. But, as long as he's practically swimming in easy credits, he won't pay much attention to it.
And just like when he was intensively studying the basics of how the human economy worked, he barely got any sleep. His mind was constantly thinking about the things he would buy. Or rather, what other stocks to put his credits into. Even now he can still hardly believe it. Just spend your money on some, make-believe thing and, if you wait long enough and picked the right stock, you'll get more than you spent back?
His mind even wandered onto what human colonies, or even their homeworld, Earth, was like. If everybody was making so much money, what kind of things would they offer? What kind of ridiculous service or product or item can you get? He's even debating on joining some forum and just asking around. Explain how he's new to how humans do things and was wondering what he should expect if he's successful.
By the time he felt like he can go to sleep, the binary-stars of the system were rising from the horizon. After getting out of his bed and changing to clean clothes, his mind returned onto what-ifs.
What if he bought better clothes? He's had his eye on that human brand of luxury clothes, Tessuti di Venezia, that's been all the rage amongst the royal servants. Or maybe he can go on vacation and just check out Earth for real?
It was a short ride to his workplace from his home. After getting stuff his stuff and preparing to walk through the doors, he heard the roar of a car grow louder. When he looked, he saw the sleekest and quite possibly the coolest looking car he's ever seen. Each time the engine revved it would startle him, both from how harsh it sounded as well as just how intense it sounded. And after it parked, he saw the doors pop out and then slide along the body back. And there, he saw Tilik, the seat literally turning and extending out a bit before he got off.
As soon as he saw Ghen staring, he struck a rather prideful pose after putting on his lab coat and then sauntered over to Ghen.
"What do you think?" Tilik said, without any doubt inviting praise or compliments.
"D...Did you actually buy that?" Ghen asked, unable to tear his eyes away from the car.
"You're Queens-damn right I did!" Tilik laughed happily. "Thing takes off like a starship, has temperature-controlled seating, all-in-one center console, barely any bouncing on rough roads. Hoof, best decision I've ever made!"
"How much did that thing cost?" Ghen asked after letting out an incredulous laugh.
"Five million credits." Tilik replied, earning an absolutely shocked stare from Ghen. "And thanks to the incredible salary I have, in addition to all these shares and dividends, I'll pay back the credits I borrowed in no time!"
Ghen needed a few moments before he could speak again. "All I've been doing is buying more shares."
Tilik laughed and then patted the now-envious monitor's back. "Smart man. I got a little carried away, yeah, but not anymore. Any spending credits I got, going right back to investing. That's what it's called right, investing?"
"Yeah, it is." Ghen nodded, feeling a fire light up in his thorax. "And also? Today's the day that the premium water thing is being released. Here's hoping it starts out well, right?"
"Oh it will, trust me." Tilik chuckled as they both began making their way inside the workplace. "Lots of research, lots of study. By the Queen, so much of it...it'll make your head spin."
And after hearing that, Ghen had a moment of realization. "Hey, Tilik? How did you get such a nice position anyways? Weren't you just studying under me before the humans came along?"
Tilik let out a sigh after opening the door. "I'll be honest, I never wanted your job. Not because it's boring or terrible, just...I didn't suffer so many sleepless nights in the science academy just to be a glorified button pusher. This is what I've always wanted. Doing science, solving problems rather than just applying the solution, you know?"
"Wait, you got an academic certificate?" Ghen questioned, completely floored. "How did you end up beneath me then? I should've been answering to you!"
"Simple." Tilik gave a heavier sigh. "A royal servant was asking for the same job I was. Take a guess at who got it."
"Ouch. Good thing the humans came along when they did, yeah?" Ghen was taken aback. He never heard anything about a servant taking a job at his place. "Looks like you're proving yourself to be well suited."
"By the Queen, of course I am." Tilik nodded. "Like I said, I nearly broke my wings through so many nights, got certified top of my class, all just to get pushed to the dirt because someone who was born into a particular family wanted the same thing I did? I know I'm smarter than any of those empty-skull servants back in the Center. I know that, whatever, uh...corporate? Yeah, whatever corporate wants out of science, I will xeek give it to them."
"Well, let me know how things go in the lab." Ghen said, admiring his drive as they neared the main office floor. "Because this is where the button pusher needs to go."
Tilik let out a laugh as he nodded. "Hey, how about we meet up at Queen's Fine Eatery tonight. I'll pay, yeah?"
Ghen, at first, wanted to admonish him for choosing such an outrageously expensive place to go. But he quickly realized that, he truly is good for it, thanks to the humans. "Well, hey, if you're paying for it."
...
It was a fantastic opening. After being told what news sites to keep in mind for stocks, he first heard it from Dylan, and then got more detail on Business Today. There was such a massive demand right from the start that Zilia needs to increase extraction just to meet it. But what really got his attention was the effect it had. Zilia Water Delivery's share price just blasted off. After seemingly holding steady at about 3.15, by the time he got home and logged onto his account, it already reached 7.04 a share. The calculator on his account told him that he got a value-gain of 54.26%.
Never in his entire life had he felt such...joy. With all of the shares he currently has? He's sitting at 400,512.64 credits. He knows that it is woefully pathetic compared to what the royal servants have just in their pockets, but the fact that he has such money, just by owning some intangible concept? Why even work at Zilia? Why doesn't he just sit at home, figure out what companies to invest in and make his money that way?
What's even the point in working a real job, getting a pathetic pay when you can just take the money you have, determine where to spend it, and get triple back? All just sitting on your wings at home, researching?
He was so wrapped up in his excited high that he completely forgot he was going to meet Tilik at Queen's. After quickly and haphazardly putting on his nicer clothes, he got to the place only a few minutes late.
Tilik was there by the guide, no doubt having been waiting for him. As soon as he strode up, Tilik's wings stiffned out some. No doubt he must've seen the numbers as well.
"I can see your wings, Ghen." Tilik began with an excited chuckle. "Made some serious credits?"
Ghen let out an incredulous scoff, struggling to find the words for a moment. "Incredible. All I'm going to say."
"Likewise." Tilik chortled some before nodding to the table guide. "All here. Table please?"
"Right this way, sir." The guide said politely. It was a short walk, travelling between round tables. The vast majority were populated by zazk, but Ghen was surprised at seeing a few humans here as well. No doubt corporate workers checking out the local food. He did spot them having bowls filled with some kind of mass. Some were brown, others white with what looks to be black specks on them.
They arrived at their table. A rather nice one, affording a view out the windows into the busy colony streets. Once Tilik and Ghen settled in, the guide handed out the menus.
"May I suggest our rather popular option for tonight?" The guide began. "Human ice-cream. Ingredients sourced from Earth itself. Very cold, but incredibly sweet, and coming in many flavors. The most popular amongst us is called vanilla-bean. The vanilla itself soaks in the cream for much of the process, and then the innards sprinkled on top of it near the end. Rumor has it that the Queen herself has demanded personal shipments of such a treat straight from the home of vanilla, an island on Earth named Madagascar."
Ghen didn't even spare a single thought. "Vanilla bean ice cream then, please."
"Same." Tilik seconded when the guide glanced to him. With a slight bow, the guide proceeded to ferry their orders to the kitchen. Thankfully it was just a short wait before the guide returned, carrying a large plate containing bowls of ice cream. Ghen could feel the saliva on his mandibles as the bowl was placed before them. He could just feel the cold air around that glistening mass of sugary goodness. The white snow decorated with the black dots of vanilla bean.
Once the guide left them, Tilik and Ghen both dived in at the same time. As soon as the ice cream entered his mouth, touched his tongue, he exploded in incomprehensible bliss. The sweetness, the smooth and creamy mass, even the taste of vanilla he wasn't sure about was just absolutely delightful. It was so overwhelming that his entire body limped, slumping in his seat as he was forced to ride on the surging tide of joy and happiness sweeping over him.
Tilik was no different. He too was taken completely by the effects of the ice cream, his wings fluttering some against the seat. Ghen could hear some noise. It was the humans they passed by. They were chuckling, grinning, and glancing over at them discreetly. Unlike the two zazk, the humans seemingly just enjoyed the ice cream as if it was just another nice dessert to them. Or perhaps they couldn't allow themselves to succumb to the high?
And as soon as the wave of indescribable bliss and happiness subsided, Ghen knew. He just knew. This was the life. He wanted this. The ice cream was just the beginning. So many things denied because he didn't have the credits, or worse, not the blood. Because he was just a drone in the great Collective, even if he had the credits, he wasn't allowed because of what caste he was born in. That fire that sparked in him when he saw Tilik's new car? It exploded into a raging firestorm.
And when looking into Tilik's eyes, Ghen could see the same. He was on the same page as Ghen was. Both of them were sold. They have the credits. And the humans? If you can pay for it, they'll never discriminate. All they cared about is if you have the money.
And by the Queen, Ghen and Tilik will endeavor to amass as much credits as physically possible.
The rest of the night faded into a blur. A blur that evokes only one thing. Bliss. It was only when he walked through the door of his pathetic hut that Ghen's mind snapped back to focus. His mandibles felt sticky. And he felt a weight in his stomach. How much ice cream did he eat? Whatever it was, he ate such volume that the lower-section of his throax extended and rounded out, visible even under his shirt. He felt something odd in his pocket. It was a receipt. 43,000 credits for ten bowls of vanilla bean ice cream. Was that ten bowls for both of them? Or individually? Ghen didn't care. He's good for it.
Returning back to his calculator, he acted upon the decision that he had made at that eatery. He's acquiring as many books about investing and stock trading as he could find, frequent and study all the discussions and arguments presented by other like-minded individuals such as he, all to ensure he can live the good life. And he had a very good feeling Tilik was doing the exact same thing.
Well, first, the gurgling in his stomach, as well as the feeling of something rising demanded his attention. Looks like he'll need to take the night off to let his stomach get back to normal.
Three Years Later.
Ghen looked out beyond the horizon, seeing the colony that he grew up in. On the far side was where his old house was. With only a simple robe on, made from the finest silk from Earth's nation-state of China, he relaxed in his seat.
It was a long road. Stockpiling credits from pre-existing investments and from subsequent pays, he and Tilik made it. From having only half a million in assets and cash, now transformed to over eight-hundred million. And now, his call contracts on American Interstellar? They've just announced a breakthrough in their next generation of warp drives, reducing the speed coefficient even further, resulting in far faster travel. And with that, their stock price climbed sharply.
Another hundred million credits in the bank. Soon, very soon, he and Tilik are about to become the galaxy's first zazk billionares. But that's not enough. There are many humans who are billionares. Only those he can count on one hand are considered trillionares. He's going to break into that circle. He and Tilik.
Looking beyond the colony, he saw the abandoned building of the workplace he transferred to when the humans arrived. Turns out, the reason for such a high demand was that the humans also slipped in sugar to the tap water. As soon as that broke, many influential royal servants demanded investigations and outright banning of Terran Galactic Company's influence over the former government division. Zilia's stock price plummeted. But thanks to an advance tip from his human coordinator, Dylan, he and Tilik made a put contract. And that's where they struck gold, as the human saying goes.
Dylan warned that if they were citizens of the United Nations, they'd be investigated and convicted for insider trading. But, since they weren't, and the Collective were only just introduced to capitalism, there's no risk at all. Now the colony is going through a withdrawal phase, Zilia has been dissolved and reformed back as a government division and are currently at work re-establishing the standard, plain water delivery.
"Well, shit." Tilik muttered as he walked up to Ghen's side, taking well to human speech. "Looks like you win. American Interstellar's announcement really was a good thing. There goes a million credits. Ah well, the Royal Shipyards will make it back for me soon."
"Oh? Did they just go corporate?" Ghen asked curiously, glancing to Tilik.
"Hell yeah they did." Tilik chuckled, sitting down. "Queen and her retard servants fought it hard, but Royal Shipyards is now officially a human-style corporation. And, to a surprise to all the xenophobes in the galaxy, they're already being offered contracts for ship production. That'll raise the stock price pretty good."
"What's that human word...?" Ghen muttered, already having a reply in mind. "Dick? Yeah, calls or suck my dick, Tilik."
Tilik roared in laughter. "Already made them. Forty credits a share by this day next month."
"I have half a mind to go thirty." Ghen chuckled. "Either way, until then, I heard from Dylan that he knows a guy who knows several prime human women who happen to be into zazk."
"You're interested in women?" Tilik said as his wings fluttered. "With how often you tell me to suck you off, I'd have thought differently."
"Oh, I always thought it was you who was into men." Ghen responded dryly. "Just wanted to be a good friend, you know? Considering how you never seem to make it past, Hey sweet thing, I'm rich you know."
"Oh, go fuck yourself." Tilik countered with a little laugh. After he stopped, wings stiffened, he looked to Ghen. "So, know any royal servants we can put the squeeze on for more revenue streams?"
"I got just the one." Ghen nodded, sitting up. "Fzik. He's been fighting to control the ice cream trade. Worried it's a corrupting influence. Got done talking with the human CEO of Nestle earlier. If we clear the way, he'll know how to squeeze a little more gains in stock price when he makes the announcement."
Tilik's wings stiffened even more, signaling his approval. "Alright, time to throw some credits around, yeah?"
AN: Sorry for the period of no updates. College is starting up, lots of stuff to clear and work out. Not sure why but I just got a bug up my butt about incorporating money and the stock market into a short. Here it is. Sorry if it seems abrupt, character limit fast approaching. Let me know how you guys think about it!
submitted by SynthoStellar to HFY [link] [comments]

Tech's Plan after Suppressing Wave One

I did not think we'd get here. COVID cases are in the single digits, and many cases are off-campus (https://health.gatech.edu/coronavirus/health-alerts). Test positivity rates are incredibly low (https://gatech-covid-tracker.com/). I think we can say that Georgia Tech has navigated through it's first wave of COVID cases.

How did this happen? I'm not an epidemiologist, and even Dr. Fauci himself wouldn't be able to give you a 100% correct answer, because nobody can give you a 100% correct answer - there are too many unknowns. But, we can look at a few factors.

1.) Modified herd immunity threshold. Immunity is likely a real phenomena with COVID-19. Yes, there are now 7 confirmed cases of reinfection, but immunity is not a binary thing. It is not as if every person infected with COVID will either be immune, or they will be as unprotected as the rest of us. It's likely that the majority of COVID cases will gain some sort of immunity, and some will gain no immunity. For the sake of simplicity, let's just assume everyone infected with COVID at our campus has immunity.
Georgia Tech has, in total, around 900 positive COVID cases. There are ~14,000 people on campus if you wildly extrapolate from a few surveys taken on this subreddit - if anyone could find where the actual number is, it would be helpful. Additionally, around 5-10% of the US was probably infected in the original Feb-March surge, which would be 700-1400 people. This brings us to 1600-2300 immune people in a population of 14000.
The herd immunity threshold is given by (1-1/R0). Uncontrolled, the R0 for SARS-CoV2 is ~4. This means roughly 75% of the populace must be infected to gain "true immunity" - IE, you can do whatever you want, no distancing, no masking, etc. Obviously this is a bad idea. But, we aren't letting SARS-Cov2 spread uncontrollably. Mask compliance is high, people are trying to distance, people are washing their hands more often, etc. R0 is a function of environmental parameters as well - increasing distancing and hygiene decrease your R0. So what is the R0 with distancing and masking? That's a big question, but estimates from New York and Western Europe say it was somewhere around 0.8-1.1. A college campus will have a higher R0 than a typical state or nation, so we'll shift this up to 1.1-1.3.

This brings our herd immunity threshold to anywhere between 9-23%. We currently have in the range of 11.5%-16%, and some cases on campus may have gone totally undetected. Here's a twitter thread by an MIT data scientist if you want to read more about the "modified herd immunity" phenomena.

2.) The people who took the most risks have already gotten COVID. Anecdotally, and logically, this makes sense. People going to bars, frat parties, etc have already been infected, and that was our "first wave". Unfortunately, I don't know how to quantify this in any meaningful way, but it is probably a factor.

3.) Behavior change. People could've seen the surge in cases and decided to be more careful - get tested weekly, avoid indoor dining, go to the CRC early in the morning when it's less crowded rather than in the middle of the day, etc. This would lower R0 as well and aid with point 1, although again, I don't know how to meaningfully quantify this. But it is a possible factor.

____________________________________________________________________________________________________________
If you made it through the above, congratulations.

The question now is what Tech should do. Frankly, I feel like I am wasting both money and time this semester. This is unavoidable, and not Tech's fault or USG's fault - just a virus doing it's thing. But, just as governments - those of New York, China, South Korea, Germany, etc - gradually eased back on restrictions as the first curve was crushed, I believe Tech can and should do the same. We should not throw the floodgates open and let all hell break loose - but I think we can slowly loosen the screws in a manner that improves educational experiences, and in a way that avoids a second wave. Remote learning sucks. At least for intro classes, there is far better free material on Coursera - made by people who know how to deliver content online and who have been doing it for years - as opposed to professors who were thrown into this a few months ago.

As we all know, many "hybrid" courses are pretty much all online. I'd suggest the OPTION - for both professors and students, mandates are a god awful idea - to have more in-person hybrid sections. This won't give me my money's worth - but it'll give us something. As of now, I have three hybrid classes - and yet have not had a single in person class. These classes can be conducted in a safe, distanced/masked manner, as to keep our R0 low and keep reaping the rewards of the "modified herd immunity" discussed above. This might be difficult to implement in the middle of this semester, but I think it can be implemented next semester, in the absence of mass vaccination until (in the most optimistic case) February-March.

Other things include opening up lounges in dorms. Also, I know visiting other dorms is technically banned, but everyone I know is ignoring that rule. Many people aren't even aware of that rule - might as well just get rid of it if compliance is close to nil. But, I'd prefer more in-person classes above all else.

This was a long post. Ultimately, COVID is a game of trades - we could lock everyone in their homes until there's a vaccine, but that would destroy our society. We could let everyone run wild until there's a vaccine - again, that would destroy our society. It's a multivariate optimization problem, where we are trying to maximize safety, education, and the student experience. I'm just a dude trying to help us find that maximum.

TLDR: COVID-19 first wave beaten due to number of factors. More in-person classes would be nice.
submitted by _neorealism_ to gatech [link] [comments]

FOLO Trading

FOLO Trading
TLDR: FOLO out of $100,500 in potential profit. Learned to let my winners run and BUD trade as example!
Hey all. First of all, I just want to throw out a disclaimer that I am by no mean an experienced, professional trader. In fact, I made my first option trade a little over a year ago and only started to take this seriously about 6 months ago. I recently hit a milestone in my pursuit of trading as a career so I decided that I would share some of the experiences I’ve gained in hope that maybe someone that’s looking to pursue this seriously can take from my limited experience to not make the same mistakes I made. It’s been a rough 2020 and hopefully by helping each other we’ll pull through this horrible year together.
I don’t know how some of you guys are but to me the fear of losing out (FOLO) on a trade that you’re in is actually worse than the fear of missing out (FOMO) on a trade that you’ve missed due to a ridiculous run. The single most haunting FOLO trade I was involved in was during the week that TSLA had its crazy melt up in February 2020.
The TSLA trade:

Robinhood Trading History

Trading Journal TSLA200207C900 Trade Flow

TSLA200207C900 Chart

I woke up to a notification from Robinhood that TSLA made a 10% pre-market run the morning of Monday, February 3, 2020. So the FOMO in me scrambled to login to Robinhood and scrolled through the option chain for a cheap weekly option. Decided on the $900 strike expiring that Friday and bought 10 option contracts at .11 per contract with a net debit of $110. The rest is pretty murky from memory but I remember within a matter of minutes, the option value went up to .29, then .35 then it quickly pulled back to .28 back to .25 and I frantically sold my option contracts for .23 which netted me a $230 credit. I made $120 in a matter of minutes and I was damn proud of myself. I spent the next few hours watching the stock run up and up and up by then I didn’t want to get back in because I needed to get ready for work and wouldn’t be able to monitor the action to sell it at the “right price”. I didn’t want to spend more money on another FOLO trade and risk it running back down and losing all the money that I had just made. So I begrudgingly got ready for work that evening. The next day, TSLA ran all the way past $900 to make all time high and I was stuck at work feeling like a dumbass. That option contract in particular ended that Tuesday trading day at 100.5 per contract or in theory I would have made $100,500. In theory and hindsight is always 20/20**.**
What I learned from this trade was that FOLO is real and you’ll never be able to sell at the top. In hindsight, I could have just set a GTC sell price and be content with the profit I made or not.
Months later, once I started to take trading more seriously: I listened to podcasts, read all the market wizards books, read the story of Jesse Livermore, watched various trading YouTube channels and compiled all of that experience together to apply them to my trades. The single most pivotal idea that I gathered from all of these experiences was that trading decisions should not be based on a single binary decision to buy or sell but rather it should be framed around the idea of “how do I extract the most value from this particular trade” (Let your winners run). I use this idea every day to help me structure most of my trades that I also track obsessively to help me make decisions that would optimize profit potential while limiting the risk of FOLO. This leads me to the BUD trade
The BUD trade:

TOS BUD Trade History

Trading Journal BUD200918C55 Trade Flow

This is the trade where I applied what I learned to manage the trade from beginning to end. However, at the very end I still managed a fumble and lost out on a potential gain of approximately $3300 had I followed my trading plan.
  1. The opening trade was simple, I was looking for any companies that would benefit most from COVID yet still hadn’t recovered like most of the other companies at the time. I chose BUD because of these criterias and the strike price was about what it was trading at prior to COVID. Note: I was still learning and had not really learned to make trading decisions based on the Greeks. The trade was purely speculative along with the strike. However, I did start to track certain data for every at the point the trade is made for future analysis.
  2. Early June most companies had major run ups and BUD was also one of the companies that benefited. Price improvement was up about 14% which consequently led the option prices to rise to about 2.5 - 3. However, I did not want to close out the trade and miss out on subsequent run-ups. I didn’t want to just sell half. I wanted to be in the entire trade the entire time without sacrificing too much profit gained. So, I sold the 60 strike to essentially convert my original call to a debit spread while at the same time I was able to collect $2180 which was approximately $630 in profit. This allowed me to stay in the trade and should BUD continue its run I would still have a maximum profit potential of 5000 remaining to collect.
  3. By July BUD was ranging around $53 and so I decided to buy back the September 60 strike and sell the August 55 strike which converted my original trade to a Calendar spread. This allowed me to net an additional $700 in profit.
  4. Mid July, I saw that BUD was still trading under $55 so I decided to sell 5 contracts of Credit Spread to capitalize on the lack of movement. The worst thing that could have happened was that it would skyrocket and I would have lost $600 from the original trade overall. Thankfully, it didn’t and I was able to buy the credit spread back for $10. Which yielded an additional $150 in profit.
  5. Finally by the expiration date BUD was trading around $55 and I had to close out the trade or risk assignment on my short strike in August. I waited the entire day and frantically sold the calendar spread to essentially close out the entire trade which yielded an additional $1700.
    1. Where I messed up was that I should have bought back the August 55 short strike and sold the September 60 strike for a small $150 additional profit. This would have converted the trade back to a 55/60 debit spread. In addition, this would have allowed me to remain in the trade for at least a couple of more weeks in case of a run up and I would still be able to collect the full remaining $5000. Last I checked, the debit spread would have sold for $3.75 which would have yielded $3750 instead of the $1700 from closing the trade as a calendar spread.
    2. Another step for those that really want to stay til the end is to convert the debit spread into a credit spread to gain a larger profit if you believe that BUD will pull back under $60.
So, hopefully my experience helps those that are still learning to trade like I am. I know trading isn’t easy and it's all fun and game when we see people post massive gains on their YOLO trades. Just remember, for every trade with massive gains, there’s someone on the other side experiencing the same frustration for his/her massive losses. Good luck, everyone.
submitted by I_Chart_For_Fun to wallstreetbets [link] [comments]

Bug Fables is Paper Mario TTYD but a little better AND a little worse - and that's high praise!

Lil intro:
So Bug Fables: The Everlasting Sapling is an indie game, put together by Panamanian dev duo Moonsprout Games, to follow the legacy of the original two Paper Mario games. Now as someone who would name Paper Mario 2 in my top 5 games since it came out in 2004, I'm happy to report Bug Fables is an excellent successor to that legacy and the few negative comparisons that can be made seem to me to be the result of the difference in scale of available resources between Nintendo and Moonsprout.
The prologue and first chapter introduce the explorers league and the three main characters who enlist together to further their own goals, which are given time to gestate while the world and characters are established. The player characters, a standard trio of an honour-bound knight, a feisty rogue, and a dry humoured, aloof mage, are tasked with adventuring across the lands of Bugaria to collect MacGuffins by the Ant Queen's royal blade Maki. This typical plotline is interrupted and diverted in interesting ways, and the trio of different attitudes keep the dialogue fresh. It's especially nice to see the trio's dynamic shifting as they grow closer. All this to say the writing is about on par with Paper Mario 2, what it lacks in (comparative!) charm it makes up with in coherence.
The better:
There's a lot in this game that could be pulled pretty directly from its inspirations, but in many cases those ideas have been reinterpreted to suit Bug Fable's setting, characters, and unique aspects. This starts with the three main characters allowing a good amount of customization via levelups and badges, which in turn allows for a large variety of strategies to be employed in combat. This is improved by Bug Fables excellent badge selection; very few (often expensive) badges only add power and most badges include trade-offs or otherwise incentivize normally unusual strategies. This deeply strengthens the customization by eliminating the obvious choices for all situations that the Paper Mario games had.
Another large improvement was the use of the trio with the Tattle function, allowing every NPC, enemy, and room to be an opportunity for optional characterization between the teammates. Comparatively, in the Paper Mario games this characterization was limited to Goombario and Goombella, with cutscenes being the only chance other partners could be characters at all - often interchangeably. Often in Bug Fables I would extend a boss fight just so I could hear each of the trio's reaction to the enemy.
Beyond that, many features just seem so much more streamlined than in the Paper Marios: the transit systems fit better into the world and were available sooner though money-gated early on to preserve difficulty, the game economy was balanced to allow for resource scarcity or exploitation without either being tedious as well as having purchases worth saving up for, and a lot of freedom in where and how to travel is given remarkably early on which allows for certain items or badges to be rushed. Best of all, a lot of the lore, world building, and characterization is optional, allowing for uninterested players, replayers, or speedrunners to bypass many walls of text. So many features like these struck me as something a dev would include in a post-release patch, and they make the game much smoother to play.
Lastly, the biggest improvement for me was the difficulty: after the first battle a zero cost Hard Mode badge becomes an option, which keeps the battles threatening til lategame. This is such an important improvement as it turns the early game into a resource balancing act, which encourages thoughtful battling, using the cooking system, and creating badge builds. Unlike in Paper Mario, items are relevant all game long with the best items being simple, if expensive, cooked items that won't win fights on their own. Also, superblocking reduces damage by 1 more than blocking, removing the binary "all or nothing" aspect of superguarding. The only times combat felt unfair was when one enemy had an unpreventable, single target status effect which twice caused me to lose by unluckily targeting my buffed bug, and another when a rapid shot status ailment attack one-shot my tank after a marathon of battling. Additional difficulty options are also available, tho I haven't play around with them yet.
The worse:
The "in the field" controls are somewhat finicky, especially when the camera angle in large or curved rooms adjusts as you move. Additionally, most field skills are usable 360 degrees around the leading character, as opposed to Mario skills which usually are restricted to Mario's direct left or right. This can lead to some spatial confusion, as positioning 2D character models to use 2D animations in a 3D environment can be frustrating - dodging enemy shots while trying to engage in combat comes to mind.
This is also true of several platforming puzzles; solving the puzzle was frequently much easier than executing the solution. While this was barely an issue that took longer than a minute, I could see how it could be frustrating, especially without certain badges.
I also felt that a lot of the decorations in areas could have questionable physics models. Poking around behind foreground or midground items could feel awkward, as their meshes sometimes didn't feel like what the graphics reflected - especially when the item was large enough for the backside of the object to have to be assumed.
Lastly, some of the side content felt unfleshed-out: interesting characters used for a single fetch quest or function, cool side areas with a single purpose, or just unused potential like a sea with two islands. Add to this that the enemy variety was good for the story (exactly one instance of palate swaps, and one area of mostly reused enemies) but lacking for side areas, and my biggest problem with the game is there isn't slightly more of it.
Also:
The music is consistently great, with very few songs not memorably contributing to an area/event's mood. Midway thru the game, the battle music changes to reflect the upped stakes and that's just great. Snakemouth Den and several boss tracks being standouts for me.
Conclusion:
With Bug Fables being an indie dev game as well as a first release its possible the 1.1 patch and/or DLC could change some of the rougher parts, but even besides this it is a solidly great game within the genre. With a bit of sequel baiting sprinkled into the endgame, I'm very impressed by Moonsprout and I may actually change my Sticker Star created rule to never, ever preorder once Bug Fables 2 is announced. If the improvement between this game and its sequel is as big as between the Paper Marios, it could easily be my favourite game of all time.
submitted by OberstScythe to patientgamers [link] [comments]

2 months back at trading (update) and some new questions

Hi all, I posted a thread back a few months ago when I started getting seriously back into trading after 20 years away. I thought I'd post an update with some notes on how I'm progressing. I like to type, so settle in. Maybe it'll help new traders who are exactly where I was 2 months ago, I dunno. Or maybe you'll wonder why you spent 3 minutes reading this. Risk/reward, yo.
I'm trading 5k on TastyWorks. I'm a newcomer to theta positive strategies and have done about two thirds of my overall trades in this style. However, most of my experience in trading in the past has been intraday timeframe oriented chart reading and momentum stuff. I learned almost everything "new" that I'm doing from TastyTrade, /options, /thetagang, and Option Alpha. I've enjoyed the material coming from esinvests YouTube channel quite a bit as well. The theta gang type strategies I've done have been almost entirely around binary event IV contraction (mostly earnings, but not always) and in most cases, capped to about $250 in risk per position.
The raw numbers:
Net PnL : +247
Commissions paid: -155
Fees: -42
Right away what jumps out is something that was indicated by realdeal43 and PapaCharlie9 in my previous thread. This is a tough, grindy way to trade a small account. It reminds me a little bit of when I was rising through the stakes in online poker, playing $2/4 limit holdem. Even if you're a profitable player in that game, beating the rake over the long term is very, very hard. Here, over 3 months of trading a conservative style with mostly defined risk strategies, my commissions are roughly equal to my net PnL. That is just insane, and I don't even think I've been overtrading.
55 trades total, win rate of 60%
22 neutral / other trades
Biggest wins:
Biggest losses:
This is pretty much where I expected to be while learning a bunch of new trading techniques. And no, this is not a large sample size so I have no idea whether or not I can be profitable trading this way (yet). I am heartened by the fact that I seem to be hitting my earnings trades and selling quick spikes in IV (like weed cures Corona day). I'm disheartened that I've went against my principles several times, holding trades for longer than I originally intended, or letting losses mount, believing that I could roll or manage my way out of trouble.
I still feel like I am going against my nature to some degree. My trading in years past was scalping oriented and simple. I was taught that a good trade was right almost immediately. If it went against me, I'd cut it immediately and look for a better entry. This is absolutely nothing like that. A good trade may take weeks to develop. It's been really hard for me to sit through the troughs and it's been even harder to watch an okay profit get taken out by a big swing in delta. Part of me wonders if I am cut out for this style at all and if I shouldn't just take my 5k and start trading micro futures. But that's a different post...
I'll share a couple of my meager learnings:


My new questions :

That's enough of this wall of text for now. If you made it this far, I salute you, because this shit was even longer than my last post.
submitted by bogglor to options [link] [comments]

ASIC Regulation Thread - Regarding the proposed changes ( Australians effected the most )

I'm hopeless at formatting text, so if you think you can structure this post better take everything i write and put it into an easy to digest way. I'm just going to type out everything i know in text as fast as possible. I'm not a legal expert, I'm not somehow who understands every bit of information in the PDF's below, but i know I'm a retail trader that uses leverage to make profit which is why I'm posting this, in the hope that someone who can run a charge better than me, will.
Some of you are already aware of what might be happening, this is just a post to educate retail traders on changes that might be coming to certain brokers. This effects Australian Customers the most, but also effects those living in other countries that use Australian brokers, such as Pepperstone and others.
Last year in August 2019, ASIC ( Australian Securities and Investments Commission ) was concerned about retail traders going into Forex and Binary options without understanding these instruments properly and started sticking their noses in for tough regulation.
ASIC asked brokers and anyone with interest in the industry to write to them and explain what should and should not change from the changes they proposed, some of the proposed changes are very misguided and come from a lack of understanding exactly how OTC derivatives actually work.
I will provide the link to the paper further down so you can read it yourself and i will provide a link to all the submission made by all parties that sent submissions to ASIC, however the 2 main points of debate are:
1, To reduce the overall leverage available to retail traders to either 20:1 or 30:1. This means people who currently use leverage such as 100:1 to 500:1 and everything in between will be effected the most, even more so are those traders with relatively small accounts, meaning in order to get your foot in the door to trading you will need more capital for it to be viable.
^^ This point above is very important.
2, The removing of Binary options trading, which basically includes products like "Bet if gold will rise to this price in the next 30 seconds" This sort of stuff. So far from all the submissions from brokers and individuals nobody really cares if this changes as far as i know, though if you have concerns about this i would start voicing your disapproval. Though i would not waste your time here, all is pointing to this being eradicated completely with brokers also supporting the changes, I've never used such a product and know very little about them.
^^ This point above isn't very important and will probably be enforced in the future.
Still to this day i see retail traders not understanding leverage, they think of it as "dangerous and scary", it's not, position size is the real danger, not leverage. So ASIC is aiming to limit retail traders access to high leverage, they are claiming it is a way to protect traders who don't really understand what they are getting into by attacking leverage and not the real problem which is position size relative to your capital.
If it was truly about protecting retail traders from blowing up their accounts, they would look for ways to educate traders on "understanding position sizes and why it's important" rather than attacking leverage, but their goal is misguided or has an ulterior motive . I will give you a small example below.
EXAMPLE - We will use 2 demo accounts for demonstration purposes. If you don't understand my example, i suggest you try it for yourself. - Skip if not interested in examples.
Lets say we open 2 demo accounts with $1000 in both, one with 20:1 leverage and one with 500:1 leverage and we open an identical position on both accounts ( say a micro lot '0.01' on EURUSD ). You are safer on the 500:1 account as you don't need to put up as much margin as collateral as you would on the 20:1. If the trade we just opened goes against us and continues against us, the account with 20:1 leverage will run out of free margin a lot faster than the 500:1 account. In this simple example is shows you that leverage is not dangerous but safer and gives you a lot more breathing room. This trade was a small micro lot, so it would take hundreds of pips movements to get margin called and blow up that $1000 on each account. Lets now use a different position size to truly understand why retail traders blow up accounts and is the reason why trading can be dangerous.
This time instead of opening a micro lot of '0.01' on our $1000 dollar demo accounts, lets open a position size much larger, 5 lots. Remember we only have $1000 and we are about to open a position much larger relative to our capital ( which we should never do because we can't afford to do that ) the 20:1 probably wont even let you place that trade if you don't have enough margin as collateral or if you could open the position you would have a very tiny amount of free margin left over, meaning a small pip movement against you will instantly blow up your $1000 account. On the 500:1 account you wouldn't need to put up as much margin as collateral with more free margin if the trade goes bad, but again a small movement could blow up your account. In this example, both accounts were dangerous because the lack of understanding position sizes, opening a position you can't afford to open. This is what the true danger is, not the leverage.
Even in the second example, the higher leverage would "margin call" you out later. So i would go as far to say that lower leverage is more dangerous for you because it margin calls you out faster and just by having a lower leverage doesn't stop you from opening big positions that can blow you up in a 5 pip movement anymore, any leverage size is dangerous if you're opening positions you can't afford to open. This is also taking into consideration that no risk management is being used, with risk management higher leverage is even more powerful.
ASIC believes lowering leverage will stop people opening positions that they can't afford. When the reality is no matter how much capital you have $500, $1000, $5000, $50,000, $500,000, $5,000,000. You don't open position sizes that will blow that capital up completely with small movements. The same thing can happen on a 20:1 or 500:1 account.
Leverage is a tool, use it, if your on a lower leverage already such as 20:1, 30:1 it means your country has been regulated and you already have harder trading conditions. Just remember higher leverage allows you to open larger position sizes in total for the amount of money you own, but the issue is NOT that your using the higher leverage but because you are opening positions you can't afford, for what ever reason that is, the only fix for this is education and will not be fixed by simply lowing leverage, since you can just as easy blow up your account on low leverage just as fast or if not faster.
So what is going on?
There might ( get your tinfoil hats on ) be more that is involved here, deeper than you think, other agendas to try and stop small time retail traders from making money via OTC products, theories such as governments not wanting their citizens to be traders, rather would prefer you to get out there and work a 9 to 5 instead. Effective ways to do this would be making conditions harder with a much larger barrier of entry and the best way to increase the barrier of entry for retail traders is to limit leverage, lower leverage means you need to put up more money, less breathing room for trades, lower potential. They are limiting your upside potential and the downside stays the same, a blown account is a blow account.
Think of leverage as a weapon, a person wielding a butchers knife can probably destroy a person wielding a steak knife, but both knifes can prove fatal. They want to make sure your holding the butter knife then tell you to butcher a cow with it. 30:1 leverage is still workable and can still be profitable, but not as profitable as 500:1 accounts. This is why they are allowing professionals to use high leverage, this gives them another edge over successful retail traders who will still be trying to butcher a cow with a butter knife, while they are slaying limbs off the cow with machetes.
It's a way to hamstring you and keep you away rather than trying to "protect" you. The real danger is not leverage, they are barking up the wrong tree, how convenient to be barking up the very tree most retail traders don't fully understand ( leverage) , pass legislation to make trading conditions harder and at the same time push the narrative that trading is dangerous by making it even harder. A full circle strategy to make your trading conditions worse, so you don't succeed.
Listen carefully especially if you trade with any of the brokers that have provided their submissions to ASIC. Brokers want to seem like they are on your side and so far some of the submissions ( i haven't read them all ) have brokers willing to drop their leverage down to 30:1 because they know by dropping the leverage down it will start margin calling out their clients at a much faster rate, causing more blown up accounts / abandoned accounts with residual margin called funds, but they also know that if they make trading environments too hard less people will trade or even worse move their funds elsewhere offshore to unregulated brokers that offer higher leverage.
Right now it's all just a proposal, but as governments expand and continue to gain more control over it's citizens, it's just a matter of time till it's law, it's up to you to be vocal about it, let your broker know that if they drop their leverage, you're out, force them to fight for you.
If you have any more information related to this, or have anything to add, post below. I'm not an expert at this technical law talk, i know that i do well with 500:1 leverage and turn profits with it, it would be harder for me to do on a lower leverage, this is the reason for my post.
All related documents HERE
CP-322 ( Consultation paper 322 ) & Submissions from brokers and others.
https://asic.gov.au/regulatory-resources/find-a-document/consultation-papers/cp-322-product-intervention-otc-binary-options-and-cfds/
submitted by southpaw_destroyer to Forex [link] [comments]

Electrician / Foreman at a Union Shop (Minneapolis, MN USA)

Salary: $97,000
Years of experience: 8.0
Recommended Education: Apprenticeship

What’s a day in the life for an electrician?

I’m a foreman, which is a much different role then if I was still a journeyman electrician. As a foreman, it’s more managing than electrical work. My goal is to make project managers happy, keep everyone focused (so the customer is satisfied), make sure our shop is making money, and deliver something that I can be proud to stand by. The electricians beside me need to be enjoying their day; otherwise, they will resent me and put in sub-par work. Part of what I do is to try and keep things interesting, so my team doesn’t lose interest. I do this by giving guys responsibility, because there’s pride associated with everything they do, or when things are more mundane, creating competitions.
The best thing about being a journeyman is that when you go home, you don’t have to think about work AT ALL. When you wake up, you don’t think about work; even when you drive to the job site, you don’t have to fire up your brain until the clock starts. But, as soon as you start working, you’re in a different world, and none of the problems from your home life consume you because you’re too busy problem solving, you’re dealing with something different every couple hours.
On a typical day, you wake up early as hell and drive to your job site. The site might be a mudhole, or it might be a nice parking garage, but it changes every couple of months, you’re never in the same situation. For example, let’s say I get assigned to work at General Mills at a factory assembly line with some issues and have to work on it for three days. That might be a casual experience where they have prints, plans, and diagrams to look at, and you follow the instructions and install it. Or, you might be working for that customer and BOOM, an entire assembly line goes down, which prevents thousands of chocolate bars from being made. You now have workers standing there, and your job is to get that line fired back up, quickly. You need to be able to walk into that environment and figure out how to approach it safely. I go through a mental checklist: turn the power off, determine what’s feeding it, find the electric room, what kind of equipment is needed, how many motors there are, what caused the problem, isolate the source, etc. At some point, you go on auto-pilot, and your brain solves the issue. There’s also more thought to it; you need to quickly determine if you can fix it today, how soon you can get the part, whether there’s a temporary solution, or whether you have enough knowledge to fix it.

What’s the best part of being an electrician?

Don’t be afraid to try it; once most people get into the work, they end up liking the profession a lot more than they ever expected. The variety of backgrounds I see seems to be increasing; this includes first-generation Americans, people looking for new careers later in life, and many more women. There’s a lot of job stability, and it’s something that isn’t going away because there’s a huge need. You’ll challenge yourself physically and mentally, and will likely receive opportunities you would never see elsewhere. If you have a lot of ambition, it can be your passion, but it also doesn’t have to be.
When you’re starting, you need to push through your training until you’re able to get your license. Once you get your license, you can’t have it taken away, and there’s a lot of freedom that comes with it, so it’s worth sticking it out.

What’s the downside of being an electrician? Words of caution?

For most people trying to get into the trades, I recommend thinking about the long-term implications. Don’t go after the first big paycheck you get offered; if the situation isn’t what you’re looking for, keep looking. Also, you need to be continually aware of what you’re doing, attentive, and present to the task. You learn to be hyper-focused.
If you’re looking to get experience and you can’t get into a union program, there’s no problem working non-union. If you’re going to be a non-union worker, you have to have more ambition; you have to be more confrontational, vouch for yourself, ask your employer for more, and there’s no one backing you with negotiated contracts. If you want an excellent education that’s varied and hope to prevent yourself from getting into dangerous situations, the union might be the way to go. Non-union, there’s no curriculum, and you have to do additional research. All things aside, there are some great non-union workers out there. You can do it if you have the drive and determination.
If you’re somebody who has no mechanical aptitude, doesn’t like to spend your free time figuring out how things work, or you’re afraid to fix something that’s broken, it might take you a while to enjoy being an electrician. You might still be good at it, but it might not come naturally. You need to have a strong work ethic if you want to have consistent employment and want to be a good electrician. You don’t need to be a perfectionist, but you need to try and do your best.

Describe the path you took to become an electrician

Before I started, I had a vague idea of what trade work looked like, and I tried to visualize myself as one of “those guys.” I wasn’t necessarily thinking, “do I like electricity?” or “do I want to work on electrical hazards?” I figured I could probably do it and gave it a try. Many people expect that if you’re blue-collar and your parents are blue-collar, then you’re the next candidate to be a trades worker. But, that’s an outdated idea. Most people don’t get into the trades because they want a high income, but when you tell anyone how much you make, they’re generally surprised.
Because there’s such a demand for electricians, there’s limited space in apprentice training programs. As a result, there are many pre-apprentice (or unindentured apprentice) training programs emerging to ensure that the people who get accepted are likely to see it through. How much pre-apprentice work you need is location dependent (usually 6-24 months), so if you want to get in without this, you may need to research various states or cities.
I completed six months of pre-apprentice work and was able to sign up because you no longer needed to complete the full two-year program. Due to high demand (in Minneapolis), they lifted the requirement so long as you could pass their interviews and entrance exams.
Once you’re accepted, you have five years of apprenticeship. Each year brings a different program, a pay increase, and every six months, they switch you to a new contractor. Some of the content included learning various installations, people skills, safety, bending pipe, physics/math, high voltage, DC/AC theory, ladder logic, binary, national/state code, etc. But, the biggest thing is learning how to problem-solve, which goes well beyond the codebook. You get a taste for more technical aspects, but you can also really dive into topics like programmable logic controllers, solar, building automation, data, etc. There are lots of certifications for each of these, and in the end, they prepare you very well to take the state exam for the journeyman license.
Starting as an apprentice allows you to make money right away. In my first year, I started at $15/hour, which doesn’t include your perks: paid vacation, pension, annuity, an unemployment slush fund, full health coverage for family, etc. Fast forward to today, I make $48.50/hour as a foreman or $46.50/hour as a journeyman. The pay rates are standardized through the union by location. What’s most in-demand right now is for low voltage and inside wireman, which is what I am. But, where you end up depends on your ambition and what you want to do. A lot of guys are content just being a worker; they don’t mind being laid off or moving from contractor to contractor. My preference is to work for a contractor that I like; I work hard to have that security.
In terms of options, you can be a journeyman, a foreman, a general foreman (required when you exceed a specific crew size), or a master electrician (requires 2,000 hours of additional work and a master’s license). As a master electrician, you’re likely to get paid more, but you’re bonded to the shop, so you may not do much electrical work, and you will take all the heat if things go wrong.

What’s the future outlook for an electrician?

Since COVID hit, our shop has had to adapt by taking on less profitable jobs; doing this allows our best guys to keep working and stay engaged. For example, we just did a sizable solar rooftop installation, where the work was mostly outside in a safe environment versus a busy construction site. If things start to change, and people don’t want to invest in new commercial buildings, there’s always going to be a need to build homes, apartments, hospitals, schools, or facilities that need constant maintenance. The trades might take bites and hits along the way, but if you’re reasonably smart with your finances, you’ll be able to make it through any tough times, which I’ve never really seen. If need be, I could always find low voltage or travel to where the work is. I know several guys who went to Australia to improve the electric grid and help train locals. The scenario is a little extreme, but there are always opportunities.
Ultimately, technology isn’t going to slow down; electrical equipment will always get better, faster, cheaper, and more efficient. Electrical work is nearly impossible to automate, so that can be a good thing if you’re coming from an industry that’s in decline.

Anything else?

If you’re trying to change careers, analyze the things you don’t like about your position now, because if you’re not coming from a trade, you could be in for a big surprise. I’ve observed that service workers who work in fast-paced environments and do a lot of multitasking do very well. You have to enjoy physical work; you have to be willing to work in many different environmental conditions, whether that’s filthy outdoor dirt, extreme temperatures, hot and cold, uncomfortable positions, etc. You have to be able to see the bigger picture so that your work doesn’t become mundane.
Job/Career Demand - 5.0
Positive Impact - 4.0
Satisfaction - 4.5
Advancement/Growth - 4.0
Creativity - 4.5
Work-Life Balance - 4.7
Compensation & Benefits - 5.0
Work Environment - 4.0
---
For anyone with questions, I am unfortunately not the writer of this content. We are working on building messaging capabilities on our website, which will hopefully be live in a couple of months. If there are any urgent questions, I can reach out to my friend directly :)
submitted by PathViz to JobProfiles [link] [comments]

FOLO Trading Experience

FOLO Trading Experience
TLDR: Made $120 on 10 TSLA200207C900 Contracts and missed out on a potential $100,500 profit. Learning to shake off that habit by making trades with the purpose of maximizing profit while at the same time avoiding FOLO. BUD200918C55 as an example.
Hey all. First of all, I just want to throw out a disclaimer that I am by no mean an experienced, professional trader. In fact, I made my first option trade a little over a year ago and only started to take this seriously about 6 months ago. I recently hit a milestone in my pursuit of trading as a career so I decided that I would share some of the experiences I’ve gained in hope that maybe someone that’s looking to pursue this seriously can take from my limited experience to not make the same mistakes I made. It’s been a rough 2020 and hopefully by helping each other we’ll pull through this horrible year together.
I don’t know how some of you guys are but to me the fear of losing out (FOLO) on a trade that you’re in is actually worse than the fear of missing out (FOMO) on a trade that you’ve missed due to a ridiculous run. The single most haunting FOLO trade I was involved in was during the week that TSLA had its crazy melt up in February 2020.
The TSLA trade:

Robinhood Trade History

Personal Trade History

TSLA200207C900 Chart
I woke up to a notification from Robinhood that TSLA made a 10% pre-market run the morning of Monday, February 3, 2020. So the FOMO in me scrambled to login to Robinhood and scrolled through the option chain for a cheap weekly option. Decided on the $900 strike expiring that Friday and bought 10 option contracts at .11 per contract with a net debit of $110. The rest is pretty murky from memory but I remember within a matter of minutes, the option value went up to .29, then .35 then it quickly pulled back to .28 back to .25 and I frantically sold my option contracts for .23 which netted me a $230 credit. I made $120 in a matter of minutes and I was damn proud of myself. I spent the next few hours watching the stock run up and up and up by then I didn’t want to get back in because I needed to get ready for work and wouldn’t be able to monitor the action to sell it at the “right price”. I didn’t want to spend more money on another FOLO trade and risk it running back down and losing all the money that I had just made. So I begrudgingly got ready for work that evening. The next day, TSLA ran all the way past $900 to make all time high and I was stuck at work feeling like a dumbass. That option contract in particular ended that Tuesday trading day at 100.5 per contract or in theory I would have made $100,500. In theory and hindsight is always 20/20**.**
What I learned from this trade was that FOLO is real and you’ll never be able to sell at the top. In hindsight, I could have just set a GTC sell price and be content with the profit I made or not.
Months later, once I started to take trading more seriously: I listened to podcasts, read all the market wizards books, read the story of Jesse Livermore, watched various trading YouTube channels and compiled all of that experience together to apply them to my trades. The single most pivotal idea that I gathered from all of these experiences was that trading decisions should not be based on a single binary decision to buy or sell but rather it should be framed around the idea of “how do I extract the most value from this particular trade” (Let your winners run). I use this idea every day to help me structure most of my trades that I also track obsessively to help me make decisions that would optimize profit potential while limiting the risk of FOLO. This leads me to the BUD trade
The BUD trade:

TOS BUD Trade History

Trading Journal BUD200918C55 Trade Flow
This is the trade where I applied what I learned to manage the trade from beginning to end. However, at the very end I still managed a fumble and lost out on a potential gain of approximately $3300 had I followed my trading plan.
  1. The opening trade was simple, I was looking for any companies that would benefit most from COVID yet still hadn’t recovered like most of the other companies at the time. I chose BUD because of these criterias and the strike price was about what it was trading at prior to COVID. Note: I was still learning and had not really learned to make trading decisions based on the Greeks. The trade was purely speculative along with the strike. However, I did start to track certain data for every at the point the trade is made for future analysis.
  2. Early June most companies had major run ups and BUD was also one of the companies that benefited. Price improvement was up about 14% which consequently led the option prices to rise to about 2.5 - 3. However, I did not want to close out the trade and miss out on subsequent run-ups. I didn’t want to just sell half. I wanted to be in the entire trade the entire time without sacrificing too much profit gained. So, I sold the 60 strike to essentially convert my original call to a debit spread while at the same time I was able to collect $2180 which was approximately $630 in profit. This allowed me to stay in the trade and should BUD continue its run I would still have a maximum profit potential of 5000 remaining to collect.
  3. By July BUD was ranging around $53 and so I decided to buy back the September 60 strike and sell the August 55 strike which converted my original trade to a Calendar spread. This allowed me to net an additional $700 in profit.
  4. Mid July, I saw that BUD was still trading under $55 so I decided to sell 5 contracts of Credit Spread to capitalize on the lack of movement. The worst thing that could have happened was that it would skyrocket and I would have lost $600 from the original trade overall. Thankfully, it didn’t and I was able to buy the credit spread back for $10. Which yielded an additional $150 in profit.
  5. Finally by the expiration date BUD was trading around $55 and I had to close out the trade or risk assignment on my short strike in August. I waited the entire day and frantically sold the calendar spread to essentially close out the entire trade which yielded an additional $1700.
    1. Where I messed up was that I should have bought back the August 55 short strike and sold the September 60 strike for a small $150 additional profit. This would have converted the trade back to a 55/60 debit spread. In addition, this would have allowed me to remain in the trade for at least a couple of more weeks in case of a run up and I would still be able to collect the full remaining $5000. Last I checked, the debit spread would have sold for $3.75 which would have yielded $3750 instead of the $1700 from closing the trade as a calendar spread.
    2. Another step for those that really want to stay til the end is to convert the debit spread into a credit spread to gain a larger profit if you believe that BUD will pull back under $60.
So, hopefully my experience helps those that are still learning to trade like I am. I know trading isn’t easy and it's all fun and game when we see people post massive gains on their YOLO trades. Just remember, for every trade with massive gains, there’s someone on the other side experiencing the same frustration for his/her massive losses. Good luck, everyone.
submitted by I_Chart_For_Fun to thetagang [link] [comments]

Recover Stolen Bitcoin and Cryptocurrency

Recover Stolen Bitcoin and Cryptocurrency

Recover Stolen Bitcoin and Cryptocurrency
Cryptocurrencies are a high priority target for cybercriminals. Whether targeting your wallet directly or hacking the exchanges once cybercriminals have access to your currency you need to act fast! You can also recover money lost to binary options.
Lost Bitcoin? Stolen Cryptocurrency? Hacked virtual currency account - Follow these steps now!
  1. Report to appropriate authorities - Report the case to the appropriate authorities, for them to be able to have it looked into.
  2. Change your login details - If you are still able to login to your account then follow the normal procedure to reset your password and other security information. Enable two-factor authentication. This should lock the criminal out of the account.
  3. Notify the exchange/provider - If you have purchased or are storing your currency with a service provider then let them know about the breach and the fraudulent transactions. They may be able to retain some information about the transaction that could come in useful in an investigation.
Will I Recover my Stolen Bitcoin?
Once your virtual currency has been stolen it is incredibly unlikely that you will be able to recover it. In theory, it’s possible to track your stolen bitcoin by monitoring the blockchain – in practice, however, this is made difficult by both the anonymous nature of the currency and the fact that the thief will most likely use a bitcoin exchange to trade the currency for normal cash straight away. However, money does leave a trail and you may be able to follow it to the identity of the criminal.
How to Recover Stolen Bitcoin and Cryptocurrency
  1. Check your devices for malware - It is worth considering that a malicious software infection may have led to the hacker accessing your currency. Scan the devices you use to handle your currency and make sure they are clean. You can follow our guide on checking for and removing malware here.
  2. Call your bank - If the transaction had related costs that hit your bank accounts - such as transaction fees or deposits - then contact your bank immediately and let them know it is an unauthorized/fraudulent transaction.
  3. Follow the money - You can follow the transactions of the wallet address that your funds were scammed into. If you notice the scammer attempt to transfer funds from the wallet to cryptocurrency exchanges to sell for fiat currency, report to the relevant exchanges immediately. An opportunity to catch the scammer is to follow the money trail through blockchain explorers and trace your lost funds. You can use browser-based blockchain exploring software such as https://blockexplorer.com to ‘follow’ the payment through to an end bitcoin address. Once you have this address you can check whether the owners of the end address(es) appear on http://bitcoinwhoswho.com/. In order to trade crypto to regular money on most popular exchanges, the thief would need to submit KYC (Know Your Customer) information, such as names, addresses, and ID information. Contacting the exchanges can potentially help you to track down the scammer’s identity. This is another reason why it is important for you to file a police report as soon as the incident has taken place.
  4. Hire a Verified Recovery Expert - If you are willing to pay a decent amount for the return of your funds there are websites where you can post a bounty. Experienced blockchain searchers will investigate the theft and see if they can recover the funds for a price. Check out the list of verified recovery experts.
How to Avoid your Cryptocurrency Being Stolen in Future
  • Don’t talk publicly about owning virtual currency - If it is easy to work out that you own a cryptocurrency from your social media activity then you are much more likely to be a target.
  • Use multi-factor authentication - Ensure that you have multi-factor authentication enabled. Use an authenticator app rather than the SMS option. If the option to disable SMS authentication exists then do it.
  • Use a new email address and complex password to set up the account - A new, clean email address that you will only use for the virtual currency account is best. This reduces the chance of you being targeted via your email account.
  • Use a ‘cold-wallet’ - Keep your cryptocurrency off the internet, in a "cold wallet." "Cold wallet" is not a brand, it's a concept of storing bitcoins offline (not connected to the internet) so that it reduces the opportunities for hackers to steal via online techniques.
  • Spread your investments across exchanges - A number of exchanges have been breached. Spread your investments across exchanges to minimize the impact.
  • Get secure - Take time to improve your general online security. Use sites like getting Safe Online and Cyber Aware to understand what good security looks like and make changes. I was personally able to recover my lost bitcoin with the help of Express Recovery Pro – [email protected]
submitted by Babyelijah to u/Babyelijah [link] [comments]

The truth about algo-trading

Just to give you guys a realistic perspective of what a project like Retard Bot really is up against, and the difficulty of printing free money...
This shit is really really really realy hard. I've been coding every day non-stop for three (four?) months, spent $4K on data and drives to store backups of it, plus another $3K+ on the beast of a PC you need to process so much data, and I'll need to spend another $8-12K on buying more PCs to basically create a tiny supercompute cluster for RB to process machine learning. I'm 26,000 lines of code into this and probably half way done.
You have to be prepared to code your own ultra fast localized GPU accelerated database that outperforms everything else because traditional databases are way too slow to crunch through this much historical data the hundreds of millions of times needed to train the machine.
If you hope to have any chance of succeeding "taming the beast" you have to be an actual autist, obsessed with problem solving to the point of doing it months on end without stepping outside. They hire the most glorious cases of asperger genius autist godlords who never leave the basement except when their minifridge runs out of mtn dew and they have to go put more on mom's grocery list. The autists that figure this shit out are the type that squeal REEEE bc they've had too much human interaction when they see the mailman walk past a fucking window.
As someone once told me, you're up against companies that blow holes in the sides of mountains to route their fiber optic cables on a little shorter of a path so they can access trades with latency a tiny fraction of a millisecond faster than the next autist. Communication at the speed of light is something these quants get annoyed waiting for. Many of these companies waterboard their quants with mtn dew to force harder work, compiling research and IP over decades. These autists are chained to desks in dungeons with a steady drip of cocaine and coffee driving their little binary crunching brains to squeeze out one more hundredth of a percent yearly return.
It's either prove you're a genius or fail with this game. I don't underestimate how unlikely it is that my attempt would work. But I'm crazy enough to try and obsessed enough to follow through. I'm obviously autistic enough to put this much thought into a single post on Reddit... and this is how much I think through everything.
Maybe I can pull it off. The results are looking promising right now but it's too early to say for sure. Just know what you guys are getting into if you're going to try something like this. Sure use it as an opportunity to learn to code, but maybe don't sell your mom into slavery to scrape together the $3-5K you need to buy the historical options data for a project like this. I know what you're thinking. "My mom's worth at least $12K" No she's not. Don't lie to yourself autist. And if you succeed in something like this, don't fucking dance. For every one of us who makes it, 99 others just threw away their mom's retirement fund on PRPL calls.
https://reddit.com/link/i7ybef/video/uexycvg7dfg51/player
submitted by o_ohi to retard_bot [link] [comments]

Three ways to play earnings without getting IV crushed

Sup nerds. Tomorrow is my birthday and I’m probably waking up to a nice fat 4 digit red number because I dared bet against a company so badass as to have a one letter ticker. So my birthday gift to all of you is the gift of knowing how to lose money like I do.
If you’ve tried to play earnings with options though you’ve probably experienced IV crush. The stock moves in your favor but you lose money anyway. So I thought I’d give a quick rundown of what IV crush is and some simple strategies to avoid it.
Skip ahead to number 2 if you already know what IV crush is.
(Yes there have been some posts on IV crush over the past few months but as far as I can tell they’re all huge walls of text, don’t give enough clear advice, and aren’t specifically about earnings, so here you go.)

1 . What is IV crush in relation to earnings?

It’s easiest to think of it in terms of “expected move.” Implied volatility (IV) is how much of an "expected move" is implied in the current options price. Add up the price of the ATM call and ATM put, and this is how much of a move the market has priced in.
Example: $W today at close:
$134 5/8 call = 11.80
$134 5/8 put = 11.00
Expected move between now and expiration: 22.80
Naturally, after the earnings report is released there will be a much smaller expectation of movement over the remainder of the week, so the expected move will go down no matter which way the stock goes. This is another way of saying IV is going down, i.e. IV crush.

2. Strategies to play earnings without getting IV crushed:

a) Buy Deep ITM calls/puts

Deep ITM options get the majority of their price from their intrinsic value (what you’d make if you exercised the option today) as opposed to their extrinsic value (IV and theta) so there’s a lot less IV for them to lose, assuming you get a good fill. You want to pay as close to intrinsic value as possible.
Strike - Stock price = intrinsic value
Example: $160 put - $134 stock price = $26 intrinsic value
So if you’re buying the $160 put on a stock trading for $134, pay as close to $26 as possible. You’re gonna have to pay a little over but don’t just hit the ask, as the bid/ask can be wide on these.

b) Sell naked options or spreads

Get on the right side of IV crush. Personally I like to sell naked options, but spreads are good if you are a scared little baby or if your fake broker doesn’t let you sell naked options.
i) ATM vs OTM
I like ATM the best because you collect the most premium, and if the stock trades flat you still win because IV crush works in your favor.
OTM does offer extra protection from the stock moving against you. Keep in mind as you move OTM you are moving toward smaller wins and bigger losses, but also a higher win ratio. Pennies in front of the steamroller.
ii) Spread positioning
Position the outer leg (the leg you’re buying) as far OTM as possible to increase your profitability if the stock trades flat and improve your odds of winning.
Or make it a narrower spread to make it closer to a binary event. If the stock is trading at $134.50 and you sell the $134/$135 put spread for $0.50 (half the width of the strikes), that’s basically a double or nothing coin flip. If you have a high degree of confidence in which way the stock is going, that's pretty good leverage.

c) Use options to be synthetically short/long shares

If you want to gamble on direction in a way that is more leveraged than shares but completely free of Greek headaches, this is for you.
To go long: Buy the ATM Call, sell the ATM put
To go short: Sell the ATM call, buy the ATM put
If you buy an ATM call and sell the ATM put of the same strike, your position is exactly the same as being long 100 shares. The greeks from the long and short options cancel each other out.
The same is true if you buy the ATM put and sell the ATM call. Your position is mathematically the same as being short 100 shares.
The beauty, though, is that it uses about half as much buying power as buying or selling shares on margin. Just for example, based on numbers at market close today, buying an ATM call and selling an ATM put on $W uses $3716 in buying power, as opposed to roughly $6700 to buy 100 shares on margin.
ii) If your fake broker won’t let you sell naked options
You can just buy a wide leg. So if you’re going long just buy the ATM call, Sell the ATM put, and buy a deep OTM put. If you're going short, buy the ATM put, sell the ATM call, and buy a deep OTM call.

That's it I think. Hopefully someone found this helpful and it wasn’t just a bunch of obvious shit you all already know. I’m gonna get started on drinking some wine and eating some edibles and contemplating how fucking old I am. Feel free to ask any questions or add any thoughts.
submitted by themadpooper to wallstreetbets [link] [comments]

What should be hard in this game? What should be fun?

Hi all, I had iterations of this post in my head for several leagues and I am genuinely interested in other's people opinion as I changed my mind twice in the Harvest league about it. So what do I want to talk about - what makes this game fun? And is it complexity / difficulty or not? So what exactly am I getting at?
Let's compare the start of the league vs mirror-tier items in every slot because Harvest let significantly more people experience that. I personally hate levelling, maybe because I've done it so many times or maybe because it's not engaging. Some time ago there was a bump in campaign bosses difficulty and it has actually helped me to have more fun while running the same content again because I was challenged a bit and it didn't feel like an unnecessary chore. Feel free to disagree / write your opinion on that.

Mapping

Next we have maps, I'm not a casual player so my expectations is to reach full atlas and T14+ every league and every character and usually I need to upgrade gear once from my starter "just hit maps" to progress to full atlas completion. Some leagues in this also started to become, a chore and I have mixed feelings about it. White maps just don't exist in my head, T8-T13s depending on the drops are nice because my gear is a bit weaker so I need to focus more on the screen, dodge more and actually interact with the game. I actually like to be ambushed by Betrayal content for that reason. But after some level of gearing I just run through maps and the most important stat for me is movement speed. It still can be fun because I can set some goals - this league I'm buying seeds in bulk and crafting just for the sake of creating items. But the gameplay itself is not engaging. And thus not fun of itself. This is where league mechanics make or break leagues for me, if it is all the same thing - different league I'm not having that much fun. But very important point - I know that many people do! Many people like to gear up their characters up to the level that the content is not difficult at all and they can autopilot tens or hundreds of maps.
After Delirium and pushing 100% delirious T19s I had loads of fun - I had content that was extremely rewarding to play the game. Not rewards-wide (that aside) but pure excitement from killing monsters - you know the thing you do in ARPGs ;) But this content is viewed as purely optional so not many players are fussed if they don't / can't do it. There is a lot of talk on this sub about Harvest is the first league a casual player can kill Sirus (not A8, just regular one). And that is one perspective, but what every boss in Red maps offered a similar thrill? Just as a thought experiment. Would you enjoy PoE if you had to upgrade your gear in a meaningful way between each tier between T11 and T16? I don't know how this would look like in terms of balancing / gearing options or other things but it is an interesting perspective.

Bossing

So let's talk about bossing. Should any guardians / conquerors be challenging? Should you able to out gear them in a week? Two weeks? Later? What about Elder? Shaper? I know that many people would start a discussion now about the drops and how it is not profitable to run them, or fun to run them if you loose money or they don't drop anything. But shouldn't that be also connected? What if each of the conquerors was a really hard fight, but with guaranteed Conqueror Exalted orb? What if it was challenging but with the same drops as now? It's interesting that now there is a lot less discussion about Uber Elder compared to Sirus - I know about the feelings of the fight itself but I can't shake the impression that it's because Uber Elder is a "side content" while the game itself leads all players to Sirus. Almost nobody mentions Uber Atziri, even further to the side in terms of content. I really enjoyed that fight until reflect was too much (or in other words bullshit), you couldn't over gear for it easily unless you played a miner and just phased her out, so it was always challenging.
Going back to main villain - is the Uber Elder fight fun? Is it because of the mechanics only or drops? I have terrible Sirus RNG in Harvest, killed him 30+ times on A8 and got one woke orb, no woke gems, no other noteworthy drops. Still have the same amount of fun doing him - which is small but positive. I didn't do much of Uber Elder but the fight itself feels less random and it's always fun. I feel like also there is more things to care in that fight which makes it more engaging even without loot comparison. I also know that once I learned the Sirus fight I'm much more comfortable to go a bit under geared there but I don't want to try it with Uber Elder. How is it for you? Do you enjoy fights for the mechanics or drops? Or somewhere in between?

Delve

Delve is interesting for me. If you don't start early in the league once you get going the first X levels are annoying because you are too strong and for the last couple of leagues the rewards for first levels are bad. So you are missing out on league content and grinding down just for future sake. Personally I would love if doing maps up to T16s would progress the mine to that monster level, especially with how rewarding recent leagues are. Afterwards I can say delve is fun for me because you are getting pushed towards getting better gear and at delving. Never personally reached 1000 or lover so maybe it's just one strategy or full immunity afterwards where it becomes a bit binary - either you can do it or not - would love to hear a perspective on that.

Gearing

So you might expect at this point that I'm against Harvest crafting because it makes the game too easy. I'm not. I really like to make gear myself. I really like that I'm working towards something, that I'm progressing affix after affix. I really like that I don't need to trade or look for gear, I'd rather look for how to make it. But does being over-geared take enjoyment from other (core) parts of the game? For me it does. The solution I would look for is introducing more harder content rather than removing gearing options. Or expanding on gearing options - certain affixes that have 90, 95, 98 level requirement. If 400 pdps foil is enough to do all the content then maybe the solution is to make content that needs 550+pdps foil (or 600, or X), not to remove the ability to have 500+ pdps foil by more players? Because I think it boils down not only to "how easy" it is to gear. Not is it via crafting or trading, but what levels of gear is available vs how difficult is the content. Maybe this is a good place to ask a question to all the players who enjoy speed mapping - would you enjoy speed mapping yellow maps? Or white maps? Why not? Why are you aiming to casually map T16s and not double beyond, 100% delirious T16s? I don't want to sound elitist because I know that I would probably be pissed after years in red maps if I couldn't progress into them from one patch to another (looking at you PoE2). So what is your opinion on that? Also is gear your aim or means to enjoy other parts of the game?
That's it, I don't offer any wisdom or solutions, just asking questions. I hope for different answers just because so many people have different knowledge about this game and like different things about it.
submitted by DucksHaveLowAPM to pathofexile [link] [comments]

What You Need To Know To Get Your Start In The Foreign Exchange Market

You don't need a lot of capital in order to get started. This is one of the reasons why this market is so appealing. With minimal risk, you can start making profitable trades in almost no time at all. Moreover, you can even begin the process of implementing transactions without doing a whole lot of research, particularly if the risk for each trade is low and you have binary options experience and strategies that you can simply roll over.
This, however, doesn't mean that you should simply dive right in before receiving the necessary training. There are definite differences between binary option and currency exchange trading, even though they share a few striking similarities. There are countless factors that can impact currency prices and this makes it important to learn all that you can about foreign events. In a way, it is not unlike entering a high risk foreign market with high profit potential.
In addition to going through the learning process, you have to identify a few worthy sources of information. This is how you will stay abreast of changes in foreign policies and gross domestic products among other things. The more international information you glean from a reliable source, the easier it will be to predict the price movements of your selected currencies with accuracy.
The next step is to use a trade simulator. This is a platform that lets you implement trades without actually risking any cash. It gives you the chance to test your sources and see how well your trading theories will play out. It also allows traders to test out different trading strategies in order to identify the ones that they're most comfortable using.
Your risk tolerance is very important in this market, just like it is in any other. Try to find out exactly how much risk you can comfortable take on before you start making irrational decisions. Understanding and honoring risk tolerance is always key for maximising your profits.
Start by searching for a few reputable option in training for Forex trading online. The learning process is an ongoing one and thus, it pays to look for a progressive and long-term program that can accommodate you continued growth. This is the market that never closes and thus, once you're ready to start trading profitably, you can earn money non-stop.
submitted by jeffout to ForexRated [link] [comments]

Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask)

Hello, dummies
It's your old pal, Fuzzy.
As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great.
What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. I do my bit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post.
That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way.
We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps.
Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy.
TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle.
Ready? Let's get started.
1. The Tao of Risk: Hedging as a Way of Life
The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows:
Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself.
Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part.
You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus.
That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it.
Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets?
2. A Hedging Taxonomy
The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now.
(i) Swaps
A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one.
Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered.
The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game.
I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging.
There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested.
Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure).
(ii) Forwards
A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me.
Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways.
People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances.
These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them.
(iii) Collars
No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray!
To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts.
(3) All About ISDAs, CDS and Synthetic CDOs
You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years.
First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA.
Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire.
Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking?
Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama.
Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details.
I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here.
Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post.
*EDIT 1\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
submitted by fuzzyblankeet to wallstreetbets [link] [comments]

Selling your Covered Call - Thoughts on How to Select Your Strike and Expiration

Congratulations! You are a bag holder of company XYZ which was thought to be the best penny stock ever. Instead of feeling sorry, you consider selling covered calls to help reduce your cost basis - and eventually get out of your bags with minimal loss or even a profit!
First - let's review the call option contract. The holder of the call option contract has the right but not the obligation to purchase 100 shares of XYZ at the strike price per share. This contract has an expiration date. We assume American style option contracts which means that the option can be exercised at any point prior to expiration. Thus, there are three parameters to the option contract - the strike price, the expiration date and the premium - which represents the price per share of the contract.
The holder of the call option contract is the person that buys the option. The writer of the contract is the seller. The buyer (or holder) pays the premium. The seller (or writer) collects the premium.
As an XYZ bag holder, the covered call may help. By writing a call contract against your XYZ shares, you can collect premium to reduce your investment cost in XYZ - reducing your average cost per share. For every 100 shares of XYZ, you can write 1 call contract. Notice that that by selling the contract, you do not control if the call is exercised - only the holder of the contract can exercise it.
There are several online descriptions about the covered call strategy. Here is an example that might be useful to review Covered Call Description
The general guidance is to select the call strike at the price in which you would be happy selling your shares. However, the context of most online resources on the covered call strategy assume that you either just purchased the shares at market value or your average cost is below the market price. In the case as a bag holder, your average cost is most likely over - if not significantly over - the current market price. This situation simply means that you have a little work to reduce your average before you are ready to have your bags called away. For example, you would not want to have your strike set at $2.50 when your average is above that value as this would guarantee a net loss. (However, if you are simply trying to rid your bags and your average is slightly above the strike, then you might consider it as the strike price).
One more abstract concept before getting to what you want to know. The following link shows the Profit/Loss Diagram for Covered Call Conceptually, the blue line shows the profit/loss value of your long stock position. The line crosses the x-axis at your average cost, i.e the break-even point for the long stock position. The green/red hockey stick is the profit (green) or loss (red) of the covered call position (100 long stock + 1 short call option). The profit has a maximum value at the strike price. This plateau is due to the fact that you only receive the agreed upon strike price per share when the call option is exercised. Below the strike, the profit decreases along the unit slope line until the value becomes negative. It is a misnomer to say that the covered call is at 'loss' since it is really the long stock that has decreased in value - but it is not loss (yet). Note that the break-even point marked in the plot is simply the reduced averaged cost from the collected premium selling the covered call.
As a bag holder, it will be a two-stage process: (1) reduce the average cost (2) get rid of bags.
Okay let's talk selecting strike and expiration. You must jointly select these two parameters. Far OTM strikes will collect less premium where the premium will increase as you move the strike closer to the share price. Shorter DTE will also collect less premium where the premium will increase as you increase the DTE.
It is easier to describe stage 2 "get rid of bags" first. Let us pretend that our hypothetical bag of 100 XYZ shares cost us $5.15/share. The current XYZ market price is $3/share - our hole is $2.15/share that we need to dig out. Finally, assume the following option chain (all hypothetical):
DTE Strike Premium Intrinsic Value Time Value
20 $2.5 $0.60 $0.50 $0.10
20 $5.0 $0.25 $0 $0.25
20 $7.5 $0.05 $0 $0.05
50 $2.5 $0.80 $0.50 $0.30
50 $5.0 $0.40 $0 $0.40
50 $7.5 $0.20 $0 $0.20
110 $2.5 $0.95 $0.50 $0.45
110 $5.0 $0.50 $0 $0.50
110 $7.5 $0.25 $0 $0.25
Purely made up the numbers, but the table illustrates the notional behavior of an option chain. The option value (premium) is the intrinsic value plus the time value. Only the $2.5 strike has intrinsic value since the share price is $3 (which is greater than $2.5). Notice that intrinsic value cannot be negative. The rest of the premium is the time value of the option which is essentially the monetary bet associated with the probability that the share price will exceed the strike at expiration.
According to the table, we could collect the most premium by selling the 110 DTE $2.5 call for $0.95. However, there is a couple problems with that option contract. We are sitting with bags at $5.15/share and receiving $0.95 will only reduce our average to $4.20/share. On expiration, if still above $2.5, then we are assigned, shares called away and we receive $2.50/share or a loss of $170 - not good.
Well, then how about the $5 strike at 110 DTE for $0.50? This reduces us to $4.65/share which is under the $5 strike so we would make a profit of $35! This is true - however 110 days is a long time to make $35. You might say that is fine you just want to get the bags gone don't care. Well maybe consider a shorter DTE - even the 20 DTE or 50 DTE would collect premium that reduces your average below $5. This would allow you to react to any stock movement that occurs in the near-term.
Consider person A sells the 110 DTE $5 call and person B sells the 50 DTE $5 call. Suppose that the XYZ stock increases to $4.95/share in 50 days then goes to $8 in the next 30 days then drops to $3 after another 30 days. This timeline goes 110 days and person A had to watch the price go up and fall back to the same spot with XYZ stock at $3/share. Granted the premium collected reduced the average but stilling hold the bags. Person B on the other hand has the call expire worthless when XYZ is at $4.95/share. A decision can be made - sell immediately, sell another $5 call or sell a $7.5 call. Suppose the $7.5 call is sold with 30 DTE collecting some premium, then - jackpot - the shares are called away when XYZ is trading at $8/share! Of course, no one can predict the future, but the shorter DTE enables more decision points.
The takeaway for the second step in the 2-stage approach is that you need to select your profit target to help guide your strike selection. In this example, are you happy with the XYZ shares called away at $5/share or do you want $7.5/share? What is your opinion on the stock price trajectory? When do you foresee decision points? This will help determine the strike/expiration that matches your thoughts. Note: studies have shown that actively managing your position results in better performance than simply waiting for expiration, so you can adjust the position if your assessment on the movement is incorrect.
Let's circle back to the first step "reduce the average cost". What if your average cost of your 100 shares of XYZ is $8/share? Clearly, all of the strikes in our example option chain above is "bad" to a certain extent since we would stand to lose a lot of money if the option contract is exercised. However, by describing the second step, we know the objective for this first step is to reduce our average such that we can profit from the strikes. How do we achieve this objective?
It is somewhat the same process as previously described, but you need to do your homework a little more diligently. What is your forecast on the stock movement? Since $7.5 is the closest strike to your average, when do you expect XYZ to rise from $3/share to $7.5/share? Without PR, you might say never. With some PR then maybe 50/50 chance - if so, then what is the outlook for PR? What do you think the chances of going to $5/share where you could collect more premium?
Suppose that a few XYZ bag holders (all with a $8/share cost) discuss there outlook of the XYZ stock price in the next 120 days:
Person 10 days 20 days 30 days 40 days 50 days 100 days 120 days
A $3 $3 $3 $3 $3 $4 $4
B $4 $4 $5 $6 $7 $12 $14
C $7 $7 $7 $7 $7 $7 $7
Person A does not seem to think much price movement will occur. This person might sell the $5 call with either 20 DTE or 50 DTE. Then upon expiration, sell another $5 call for another 20-50 DTE. Person A could keep repeating this until the average is reduced enough to move onto step-2. Of course, this approach is risky if the Person A price forecast is incorrect and the stock price goes up - which might result in assignment too soon.
Person B appears to be the most bullish of the group. This person might sell the $5 call with 20 DTE then upon expiration sell the $7.5 call. After expiration, Person B might decide to leave the shares uncovered because her homework says XYZ is going to explode and she wants to capture those gains!
Person C believes that there will be a step increase in 10 days maybe due to major PR event. This person will not have the chance to reduce the average in time to sell quickly, so first he sells a $7.5 call with 20 DTE to chip at the average. At expiration, Person C would continue to sell $7.5 calls until the average at the point where he can move onto the "get rid of bags" step.
In all causes, each person must form an opinion on the XYZ price movement. Of course, the prediction will be wrong at some level (otherwise they wouldn't be bag holders!).
The takeaway for the first step in the 2-stage approach is that you need to do your homework to better forecast the price movement to identify the correct strikes to bring down your average. The quality of the homework and the risk that you are willing to take will dedicate the speed at which you can reduce your average.
Note that if you are unfortunate to have an extremely high average per share, then you might need to consider doing the good old buy-more-shares-to-average-down. This will be the fastest way to reduce your average. If you cannot invest more money, then the approach above will still work, but it will require much more patience. Remember there is no free lunch!
Advanced note: there is another method to reduce your (high) average per share - selling cash secured puts. It is the "put version" of a cover call. Suppose that you sell a XYZ $2.5 put contract for $0.50 with 60 DTE. You collect $50 from the premium of the contract. This money is immediately in your bank and reduces your investment cost. But what did you sell? If XYZ is trading below $2.50, then you will be assigned 100 shares of XYZ at $2.50/share or $250. You own more shares, but at a price which will reduce your average further. Being cash secured, your brokerage will reserve $250 from your account when you sell the contract. In essence, you reduce your buying power by $250 and conditionally purchase the shares - you do not have them until assignment. If XYZ is greater than the strike at expiration, then your broker gives back $250 cash / buying power and you keep the premium.

Early assignment - one concern is the chance of early assignment. The American style option contract allows the holder the opportunity to exercise the contract at any time prior to expiration. Early assignment almost never occurs. There are special cases that typically deal with dividends but most penny stocks are not in the position to hand out dividends. Aside from that, the holder would be throwing away option time value by early exercise. It possibly can handle - probably won't - it actually would be a benefit when selling covered calls as you would receive your profit more quickly!


This post has probably gone too long! I will stop and let's discuss this matter. I will add follow-on material with some of the following topics which factors into this discussion:
Open to other suggestions. I'm sure there are some typos and unclear statements - I will edit as needed!
\I'm not a financial advisor. Simply helping to 'coach' people through the process. You are responsible for your decisions. Do not execute a trade that you do not understand. Ask questions if needed!**
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