Are binary options charts and forex charts the same
Are binary options charts and forex charts the same
Difference Between Binary Options Trading and Real Options
Binary Options vs. Options: What is the Difference?
Is binary options the same as stock trading
How to Trade Stocks using Binary Options
The Next Processor Change is Within ARMs Reach
As you may have seen, I sent the following Tweet: “The Apple ARM MacBook future is coming, maybe sooner than people expect” https://twitter.com/choco_bit/status/1266200305009676289?s=20 Today, I would like to further elaborate on that. tl;drApple will be moving to Arm based macs in what I believe are 4 stages, starting around 2015 and ending around 2023-2025: Release of T1 chip Macbooks, release of T2 chip Macbooks, Release of at least one lower end model Arm Macbook, and transitioning full lineup to Arm. Reasons for each are below. Apple is very likely going to switch to switch their CPU platform to their in-house silicon designs with an ARM architecture. This understanding is a fairly common amongst various Apple insiders. Here is my personal take on how this switch will happen and be presented to the consumer. The first question would likely be “Why would Apple do this again?”. Throughout their history, Apple has already made two other storied CPU architecture switches - first from the Motorola 68k to PowerPC in the early 90s, then from PowerPC to Intel in the mid 2000s. Why make yet another? Here are the leading reasons:
Intel has, in recent years, been making significant losses both in reputation and in actual product value, as well as velocity of product development, breaking their bi-yearly “Tick Tock” cycle for the first time in decades. Most recently, they have fallen well behind AMD’s processor lines in cost to performance ratio, CPU core count, core design (monolithic design vs “chiplet”), power consumption to performance, silicon supply (Intel with significant manufacturing process and yield issues), and on-silicon security features. While Intel still wins out in certain enterprise and datacenter applications, as well as having a much better reputation for reliability and QA (AMD having shipped numerous chips with a broken random- number generator that prevented even booting some mainstream operating system), the number of such applications slowly dwindles with each new release from AMD, and as confidence among decisionmakers in enterprise increases. In the public consciousness, Intel is quickly becoming a point of ridicule against Apple’s Mac lineup, rather than a badge of honor.
By moving to their own designs, Apple will be free from Intel’s release schedule, which have recently been unpredictable and faced with routine delays due to poor manufacturing yields. Apple will be able to update their Mac lineup on their own timeline, rather than being forced to delay products based on Intel’s ability to meet the release window. This also allows them to leverage relationships with other silicon fabricators to source chips, rather than relying on Intel ’s continued “iteration” that’s leading to a “14nm++++++++++” process, or the continued lack of product diversity with the 10nm process. Apple will also be free to innovate in the design of the silicon platform, rather than being limited by Intel’s design choices. By having full control of the manufacturing and development cycle, Apple can bring even more in-house optimization to the macOS, as they have been for iOS and iPadOS over the years.
Using an ARM architecture on the Macs allows for a more unified Apple ecosystem, rather than having separate Mac and iOS-based products. The only distinction will be the device form factor and performance characteristics.
The x86_64 architecture is very old and inefficient, using older methodologies for processor design (CISC vs ARM’s RISC), and the instruction set continues to require support in silicon for emulating 1980s-vintage 16-bit modes, as well as ineffectual and archaic memory addressing modes (segmentation, etc.) The x86_64 architecture is like a city, built atop a much older city, built atop a yet older city, but every layer is built with NYC infrastructure levels of complexity that suited its time and no further.
Over the last 10 years, Apple has shown that they can consistently produce impressive silicon designs, often leading the market in performance and capability, and Apple has been aggressively acquiring silicon design talent.
A common refrain heard on the Internet is the suggestion that Apple should switch to using CPUs made by AMD, and while this has been considered internally, it will most likely not be chosen as the path forward, even for their megalithic giants like the Mac Pro. Even though AMD would mitigate Intel’s current set of problems, it does nothing to help the issue of the x86_64 architecture’s problems and inefficiencies, on top of jumping to a platform that doesn’t have a decade of proven support behind it. Why spend a lot of effort re-designing and re- optimizing for AMD’s platform when you can just put that effort into your own, and continue the vertical integration Apple is well-known for? I believe that the internal development for the ARM transition started around 2015/2016 and is considered to be happening in 4 distinct stages. These are not all information from Apple insiders; some of these these are my own interpretation based off of information gathered from supply-chain sources, examination of MacBook schematics, and other indicators from Apple.
Stage1 (from 2014/2015 to 2017):
The rollout of computers with Apple’s T1 chip as a coprocessor. This chip is very similar to Apple’s T8002 chip design, which was used for the Apple Watch Series 1 and Series 2. The T1 is primarily present on the first TouchID enabled Macs, 2016 and 2017 model year MacBook Pros. Considering the amount of time required to design and validate a processor, this stage most likely started around 2014 or 2015, with early experimentation to see whether an entirely new chip design would be required, or if would be sufficient to repurpose something in the existing lineup. As we can see, the general purpose ARM processors aren’t a one- trick pony. To get a sense of the decision making at the time, let’s look back a bit. The year is 2016, and we're witnessing the beginning of stagnation of Intel processor lineup. There is not a lot to look forward to other than another “+” being added to the 14nm fabrication process. The MacBook Pro has used the same design for many years now, and its age is starting to show. Moving to AMD is still very questionable, as they’ve historically not been able to match Intel’s performance or functionality, especially at the high end, and since the “Ryzen” lineup is still unreleased, there is absolutely no benchmarks or other data to show they are worth consideration, and AMD’s most recent line of “Bulldozer” processors were very poorly received. Now is probably as good a time as any to begin experimenting with the in-house ARM designs, but it’s not time to dive into the deep end yet, our chips are not nearly mature enough to compete, and it’s not yet certain how long Intel will be stuck in the mud. As well, it is widely understood that Apple and Intel have an exclusivity contract in exchange for advantageous pricing. Any transition would take considerable time and effort, and since there are no current viable alternative to Intel, the in-house chips will need to advance further, and breaching a contract with Intel is too great a risk. So it makes sense to start with small deployments, to extend the timeline, stretch out to the end of the contract, and eventually release a real banger of a Mac. Thus, the 2016 Touch Bar MacBooks were born, alongside the T1 chip mentioned earlier. There are good reasons for abandoning the piece of hardware previously used for a similar purpose, the SMC or System Management Controller. I suspect that the biggest reason was to allow early analysis of the challenges that would be faced migrating Mac built- in peripherals and IO to an ARM-based controller, as well as exploring the manufacturing, power, and performance results of using the chips across a broad deployment, and analyzing any early failure data, then using this to patch any issues, enhance processes, and inform future designs looking towards the 2nd stage. The former SMC duties now moved to T1 includes things like
Fan speed, voltage, amperage and thermal sensor feedback data
FaceTime camera and microphone IO
PMIC (Power Management Controller)
Direct communication to NAND (solid state storage)
Direct communication with the Touch Bar
Secure Enclave for TouchID
The T1 chip also communicates with a number of other controllers to manage a MacBook’s behavior. Even though it’s not a very powerful CPU by modern standards, it’s already responsible for a large chunk of the machine’s operation. Moving control of these peripherals to the T1 chip also brought about the creation of the fabled BridgeOS software, a shrunken-down watchOS-based system that operates fully independently of macOS and the primary Intel processor. BridgeOS is the first step for Apple’s engineering teams to begin migrating underlying systems and services to integrate with the ARM processor via BridgeOS, and it allowed internal teams to more easily and safely develop and issue firmware updates. Since BridgeOS is based on a standard and now well-known system, it means that they can leverage existing engineering expertise to flesh out the T1’s development, rather than relying on the more arcane and specialized SMC system, which operates completely differently and requires highly specific knowledge to work with. It also allows reuse of the same fabrication pipeline used for Apple Watch processors, and eliminated the need to have yet another IC design for the SMC, coming from a separate source, to save a bit on cost. Also during this time, on the software side, “Project Marzipan”, today Catalyst, came into existence. We'll get to this shortly. For the most part, this Stage 1 went without any major issues. There were a few firmware problems at first during the product launch, but they were quickly solved with software updates. Now that engineering teams have had experience building for, manufacturing, and shipping the T1 systems, Stage 2 would begin.
Stage 2 encompasses the rollout of Macs with the T2 coprocessor, replacing the T1. This includes a much wider lineup, including MacBook Pro with Touch Bar, starting with 2018 models, MacBook Air starting with 2018 models, the iMac Pro, the 2019 Mac Pro, as well as Mac Mini starting in 2018. With this iteration, the more powerful T8012 processor design was used, which is a further revision of the T8010 design that powers the A10 series processors used in the iPhone 7. This change provided a significant increase in computational ability and brought about the integration of even more devices into T2. In addition to the T1’s existing responsibilities, T2 now controls:
Full audio subsystem
Secure Enclave for internal NAND storage and encryption/decryption offload
Management of the whole system’s power and startup sequence, allowing for trusted boot (ensure boot chain-of-trust with no malicious code/rootkit/bootkit)
Those last 2 points are crucial for Stage 2. Under this new paradigm, the vast majority of the Mac is now under the control of an in-house ARM processor. Stage 2 also brings iPhone-grade hardware security to the Mac. These T2 models also incorporated a supported DFU (Device Firmware Update, more commonly “recovery mode”), which acts similarly to the iPhone DFU mode and allows restoration of the BridgeOS firmware in the event of corruption (most commonly due to user-triggered power interruption during flashing). Putting more responsibility onto the T2 again allows for Apple’s engineering teams to do more early failure analysis on hardware and software, monitor stability of these machines, experiment further with large-scale production and deployment of this ARM platform, as well as continue to enhance the silicon for Stage 3. A few new user-visible features were added as well in this stage, such as support for the passive “Hey Siri” trigger, and offloading image and video transcoding to the T2 chip, which frees up the main Intel processor for other applications. BridgeOS was bumped to 2.0 to support all of these changes and the new chip. On the macOS software side, what was internally known as Project Marzipan was first demonstrated to the public. Though it was originally discovered around 2017, and most likely began development and testing within later parts of Stage 1, its effects could be seen in 2018 with the release of iPhone apps, now running on the Mac using the iOS SDKs: Voice Recorder, Apple News, Home, Stocks, and more, with an official announcement and public release at WWDC in 2019. Catalyst would come to be the name of Marzipan used publicly. This SDK release allows app developers to easily port iOS apps to run on macOS, with minimal or no code changes, and without needing to develop separate versions for each. The end goal is to allow developers to submit a single version of an app, and allow it to work seamlessly on all Apple platforms, from Watch to Mac. At present, iOS and iPadOS apps are compiled for the full gamut of ARM instruction sets used on those devices, while macOS apps are compiled for x86_64. The logical next step is to cross this bridge, and unify the instruction sets. With this T2 release, the new products using it have not been quite as well received as with the T1. Many users have noticed how this change contributes further towards machines with limited to no repair options outside of Apple’s repair organization, as well as some general issues with bugs in the T2. Products with the T2 also no longer have the “Lifeboat” connector, which was previously present on 2016 and 2017 model Touch Bar MacBook Pro. This connector allowed a certified technician to plug in a device called a CDM Tool (Customer Data Migration Tool) to recover data off of a machine that was not functional. The removal of this connector limits the options for data recovery in the event of a problem, and Apple has never offered any data recovery service, meaning that a irreparable failure of the T2 chip or the primary board would result in complete data loss, in part due to the strong encryption provided by the T2 chip (even if the data got off, the encryption keys were lost with the T2 chip). The T2 also brought about the linkage of component serial numbers of certain internal components, such as the solid state storage, display, and trackpad, among other components. In fact, many other controllers on the logic board are now also paired to the T2, such as the WiFi and Bluetooth controller, the PMIC (Power Management Controller), and several other components. This is the exact same system used on newer iPhone models and is quite familiar to technicians who repair iPhone logic boards. While these changes are fantastic for device security and corporate and enterprise users, allowing for a very high degree of assurance that devices will refuse to boot if tampered with in any way - even from storied supply chain attacks, or other malfeasance that can be done with physical access to a machine - it has created difficulty with consumers who more often lack the expertise or awareness to keep critical data backed up, as well as the funds to perform the necessary repairs from authorized repair providers. Other issues reported that are suspected to be related to T2 are audio “cracking” or distortion on the internal speakers, and the BridgeOS becoming corrupt following a firmware update resulting in a machine that can’t boot. I believe these hiccups will be properly addressed once macOS is fully integrated with the ARM platform. This stage of the Mac is more like a chimera of an iPhone and an Intel based computer. Technically, it does have all of the parts of an iPhone present within it, cellular radio aside, and I suspect this fusion is why these issues exist. Recently, security researchers discovered an underlying security problem present within the Boot ROM code of the T1 and T2 chip. Due to being the same fundamental platform as earlier Apple Watch and iPhone processors, they are vulnerable to the “checkm8” exploit (CVE-2019-8900). Because of how these chips operate in a Mac, firmware modifications caused by use of the exploit will persist through OS reinstallation and machine restarts. Both the T1 and T2 chips are always on and running, though potentially in a heavily reduced power usage state, meaning the only way to clean an exploited machine is to reflash the chip, triggering a restart, or to fully exhaust or physically disconnect the battery to flush its memory. Fortunately, this exploit cannot be done remotely and requires physical access to the Mac for an extended duration, as well as a second Mac to perform the change, so the majority of users are relatively safe. As well, with a very limited execution environment and access to the primary system only through a “mailbox” protocol, the utility of exploiting these chips is extremely limited. At present, there is no known malware that has used this exploit. The proper fix will come with the next hardware revision, and is considered a low priority due to the lack of practical usage of running malicious code on the coprocessor. At the time of writing, all current Apple computers have a T2 chip present, with the exception of the 2019 iMac lineup. This will change very soon with the expected release of the 2020 iMac lineup at WWDC, which will incorporate a T2 coprocessor as well. Note: from here on, this turns entirely into speculation based on info gathered from a variety of disparate sources. Right now, we are in the final steps of Stage 2. There are strong signs that an a MacBook (12”) with an ARM main processor will be announced this year at WWDC (“One more thing...”), at a Fall 2020 event, Q1 2021 event, or WWDC 2021. Based on the lack of a more concrete answer, WWDC2020 will likely not see it, but I am open to being wrong here.
Stage3 (Present/2021 - 2022/2023):
Stage 3 involves the first version of at least one fully ARM-powered Mac into Apple’s computer lineup. I expect this will come in the form of the previously-retired 12” MacBook. There are rumors that Apple is still working internally to perfect the infamous Butterfly keyboard, and there are also signs that Apple is developing an A14x based processors with 8-12 cores designed specifically for use as the primary processor in a Mac. It makes sense that this model could see the return of the Butterfly keyboard, considering how thin and light it is intended to be, and using an A14x processor would make it will be a very capable, very portable machine, and should give customers a good taste of what is to come. Personally, I am excited to test the new 12" “ARMbook”. I do miss my own original 12", even with all the CPU failure issues those older models had. It was a lovely form factor for me. It's still not entirely known whether the physical design of these will change from the retired version, exactly how many cores it will have, the port configuration, etc. I have also heard rumors about the 12” model possibly supporting 5G cellular connectivity natively thanks to the A14 series processor. All of this will most likely be confirmed soon enough. This 12” model will be the perfect stepping stone for stage 3, since Apple’s ARM processors are not yet a full-on replacement for Intel’s full processor lineup, especially at the high end, in products such as the upcoming 2020 iMac, iMac Pro, 16” MacBook Pro, and the 2019 Mac Pro. Performance of Apple’s ARM platform compared to Intel has been a big point of contention over the last couple years, primarily due to the lack of data representative of real-world desktop usage scenarios. The iPad Pro and other models with Apple’s highest-end silicon still lack the ability to execute a lot of high end professional applications, so data about anything more than video editing and photo editing tasks benchmarks quickly becomes meaningless. While there are completely synthetic benchmarks like Geekbench, Antutu, and others, to try and bridge the gap, they are very far from being accurate or representative of the real real world performance in many instances. Even though the Apple ARM processors are incredibly powerful, and I do give constant praise to their silicon design teams, there still just isn’t enough data to show how they will perform for real-world desktop usage scenarios, and synthetic benchmarks are like standardized testing: they only show how good a platform is at running the synthetic benchmark. This type of benchmark stresses only very specific parts of each chip at a time, rather than how well it does a general task, and then boil down the complexity and nuances of each chip into a single numeric score, which is not a remotely accurate way of representing processors with vastly different capabilities and designs. It would be like gauging how well a person performs a manual labor task based on averaging only the speed of every individual muscle in the body, regardless of if, or how much, each is used. A specific group of muscles being stronger or weaker than others could wildly skew the final result, and grossly misrepresent performance of the person as a whole. Real world program performance will be the key in determining the success and future of this transition, and it will have to be great on this 12" model, but not just in a limited set of tasks, it will have to be great at *everything*. It is intended to be the first Horseman of the Apocalypse for the Intel Mac, and it better behave like one. Consumers have been expecting this, especially after 15 years of Intel processors, the continued advancement of Apple’s processors, and the decline of Intel’s market lead. The point of this “demonstration” model is to ease both users and developers into the desktop ARM ecosystem slowly. Much like how the iPhone X paved the way for FaceID-enabled iPhones, this 12" model will pave the way towards ARM Mac systems. Some power-user type consumers may complain at first, depending on the software compatibility story, then realize it works just fine since the majority of the computer users today do not do many tasks that can’t be accomplished on an iPad or lower end computer. Apple needs to gain the public’s trust for basic tasks first, before they will be able to break into the market of users performing more hardcore or “Pro” tasks. This early model will probably not be targeted at these high-end professionals, which will allow Apple to begin to gather early information about the stability and performance of this model, day to day usability, developmental issues that need to be addressed, hardware failure analysis, etc. All of this information is crucial to Stage 4, or possibly later parts of Stage 3. The 2 biggest concerns most people have with the architecture change is app support and Bootcamp. Any apps released through the Mac App Store will not be a problem. Because App Store apps are submitted as LLVM IR (“Bitcode”), the system can automatically download versions compiled and optimized for ARM platforms, similar to how App Thinning on iOS works. For apps distributed outside the App Store, thing might be more tricky. There are a few ways this could go:
Developer will need to build both x86_64 and ARM version of their app - App Bundles have supported multiple-architecture binaries since the dawn of OS X and the PowerPC transition
Move to apps being distributed in an architecture-independent manner, as they are on the App Store. There is some software changes that are suggestive of this, such as the new architecture in dyld3.
An x86_64 instruction decoder in silicon - very unlikely due to the significant overhead this would create in the silicon design, and potential licensing issues. (ARM, being a RISC, “reduced instruction set”, has very few instructions; x86_64 has thousands)
Server-side ahead-of-time transpilation (converting x86 code to equivalent ARM code) using Notarization submissions - Apple certainly has the compiler chops in the LLVM team to do something like this
Outright emulation, similar to the approach that was taken in ARM releases of Windows, but received extremely poorly (limited to 32-bit apps, and very very slow)There could be other solutions in the works to fix this but I am not aware of any. This is just me speculating about some of the possibilities.
As for Bootcamp, while ARM-compatible versions of Windows do exist and are in development, they come with their own similar set of app support problems. Microsoft has experimented with emulating x86_64 on their ARM-based Surface products, and some other OEMs have created their own Windows-powered ARM laptops, but with very little success. Performance is a problem across the board, with other ARM silicon not being anywhere near as advanced, and with the majority of apps in the Windows ecosystem that were not developed in-house at Microsoft running terribly due to the x86_64 emulation software. If Bootcamp does come to the early ARM MacBook, it more than likely will run like very poorly for anything other than Windows UWP apps. There is a high chance it will be abandoned entirely until Windows becomes much more friendly to the architecture. I believe this will also be a very crucial turning point for the MacBook lineup as a whole. At present, the iPad Pro paired with the Magic Keyboard is, in many ways, nearly identical to a laptop, with the biggest difference being the system software itself. While Apple executives have outright denied plans of merging the iPad and MacBook line, that could very well just be a marketing stance, shutting the down rumors in anticipation of a well-executed surprise. I think that Apple might at least re-examine the possibility of merging Macs and iPads in some capacity, but whether they proceed or not could be driven by consumer reaction to both products. Do they prefer the feel and usability of macOS on ARM, and like the separation of both products? Is there success across the industry of the ARM platform, both at the lower and higher end of the market? Do users see that iPadOS and macOS are just 2 halves of the same coin? Should there be a middle ground, and a new type of product similar to the Surface Book, but running macOS? Should Macs and iPads run a completely uniform OS? Will iPadOS ever see exposed the same sort of UNIX-based tools for IT administrators and software developers that macOS has present? These are all very real questions that will pop up in the near future. The line between Stage 3 and Stage 4 will be blurry, and will depend on how Apple wishes to address different problems going forward, and what the reactions look like. It is very possible that only 12” will be released at first, or a handful more lower end model laptop and desktop products could be released, with high performance Macs following in Stage 4, or perhaps everything but enterprise products like Mac Pro will be switched fully. Only time will tell.
Stage 4 (the end goal):
Congratulations, you’re made it to the end of my TED talk. We are now well into the 2020s and COVID-19 Part 4 is casually catching up to the 5G = Virus crowd. All Macs have transitioned fully to ARM. iMac, MacBooks Pro and otherwise, Mac Pro, Mac Mini, everything. The future is fully Apple from top to bottom, and vertical integration leading to market dominance continues. Many other OEM have begun to follow in this path to some extent, creating more demand for a similar class of silicon from other firms. The remainder here is pure speculation with a dash of wishful thinking. There are still a lot of things that are entirely unclear. The only concrete thing is that Stage 4 will happen when everything is running Apple’s in- house processors. By this point, consumers will be quite familiar with the ARM Macs existing, and developers have had have enough time to transition apps fully over to the newly unified system. Any performance, battery life, or app support concerns will not be an issue at this point. There are no more details here, it’s the end of the road, but we are left with a number of questions. It is unclear if Apple will stick to AMD's GPUs or whether they will instead opt to use their in-house graphics solutions that have been used since the A11 series of processors. How Thunderbolt support on these models of Mac will be achieved is unknown. While Intel has made it openly available for use, and there are plans to have USB and Thunderbolt combined in a single standard, it’s still unclear how it will play along with Apple processors. Presently, iPhones do support connecting devices via PCI Express to the processor, but it has only been used for iPhone and iPad storage. The current Apple processors simply lack the number of lanes required for even the lowest end MacBook Pro. This is an issue that would need to be addressed in order to ship a full desktop-grade platform. There is also the question of upgradability for desktop models, and if and how there will be a replaceable, socketed version of these processors. Will standard desktop and laptop memory modules play nicely with these ARM processors? Will they drop standard memory across the board, in favor of soldered options, or continue to support user-configurable memory on some models? Will my 2023 Mac Pro play nicely with a standard PCI Express device that I buy off the shelf? Will we see a return of “Mac Edition” PCI devices? There are still a lot of unknowns, and guessing any further in advance is too difficult. The only thing that is certain, however, is that Apple processors coming to Mac is very much within arm’s reach.
SNAP preview, expected move and spread strike selection
Snap (SNAP) reports q2 earnings after the close Tuesday (~4:10pm)
Options are pricing an expected move of 12% by this Friday. That is the bulk of the move expected over the next month, which is about 15%.
Snap closed higher by about 36% in the day following its most recent earnings (in April)
Snap has beaten consensus estimates 7 out of the last 8 times.
https://preview.redd.it/d5e4r4ho28c51.png?width=583&format=png&auto=webp&s=9790a1e378ed329c5d66910d814093260814f70d Neutral - The first thing to look at is a neutral position, selling to both the bulls and the bears. Here are two neutral trades setting breakevens at or near the expected move. First selling the +21.5/-22.5/-28/+29 Iron Condor(condor chart) In this case the risk reward is $56 to make $44. If the stock closes anywhere between 22.5 and 28 on Friday it is a max gain. Any close beyond 21.5 or 29 and a max loss. The breakeven is 22.06 on the downside and 28.44 on the upside. That trade establishes a range of max profit, for those targeting no move at all, with the stock remaining at 25 selling an Iron Butterfly has max profit at the 25 level with profits trailing off towards the expected move and losses beyond: Fly chart Both of these trades are binary, isolating this week and what is likely to be a mostly one day move tomorrow. Bullish - For those thinking directionally the expected move can be used to help determine strike selection. Here's a bullish price target looking out a bit further in time, to August expiration: Trade comparison. In this case both the August long call spread (+25/-29) and the August short put spread (-25/+21) take advantage of multi leg strike selection based on the expected move. The short put spread is "selling to the bears" and is profitable from 22.57 and higher with a max gain if the stock is above 25 on August expiration. The long call spread has a higher breakeven, but by selling the 29 call at a high upside volatility, is much cheaper than an outright 25 call. Bearish - The same is true for a bearish target in line with the expected move but the short call spread is at a slight disadvantage due to having to buy the upside call at a similar or higher IV than the at the money call sale: Trade comparison Full post here.
Wall Street Week Ahead for the trading week beginning June 29th, 2020
Good Saturday afternoon to all of you here on StockMarket. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead. Here is everything you need to know to get you ready for the trading week beginning June 29th, 2020.
Fragile economic recovery faces first big test with June jobs report in the week ahead - (Source)
The second half of 2020 is nearly here, and now it’s up to the economy to prove that the stock market was right about a sharp comeback in growth. The first big test will be the June jobs report, out on Thursday instead of its usual Friday release due to the July 4 holiday. According to Refinitiv, economists expect 3 million jobs were created, after May’s surprise gain of 2.5 million payrolls beat forecasts by a whopping 10 million jobs. “If it’s stronger, it will suggest that the improvement is quicker, and that’s kind of what we saw in May with better retail sales, confidence was coming back a little and auto sales were better,” said Kevin Cummins, chief U.S. economist at NatWest Markets. The second quarter winds down in the week ahead as investors are hopeful about the recovery but warily eyeing rising cases of Covid-19 in a number of states. Stocks were lower for the week, as markets reacted to rising cases in Texas, Florida and other states. Investors worry about the threat to the economic rebound as those states move to curb some activities. The S&P 500 is up more than 16% so far for the second quarter, and it is down nearly 7% for the year. Friday’s losses wiped out the last of the index’s June gains. “I think the stock market is looking beyond the valley. It is expecting a V-shaped economic recovery and a solid 2021 earnings picture,” said Sam Stovall, chief investment strategist at CFRA. He expects large-cap company earnings to be up 30% next year, and small-cap profits to bounce back by 140%. “I think the second half needs to be a ‘show me’ period, proving that our optimism was justified, and we’ll need to see continued improvement in the economic data, and I think we need to see upward revisions to earnings estimates,” Stovall said. Liz Ann Sonders, chief investment strategist at Charles Schwab, said she expects the recovery will not be as smooth as some expect, particularly considering the resurgence of virus outbreaks in sunbelt states and California. “Now as I watch what’s happening I think it’s more likely to be rolling Ws,” rather than a V, she said. “It’s not just predicated on a second wave. I’m not sure we ever exited the first wave.” Even without actual state shutdowns, the virus could slow economic activity. “That doesn’t mean businesses won’t shut themselves down, or consumers won’t back down more,” she said.
In the second half of the year, the market should turn its attention to the election, but Sonders does not expect much reaction to it until after Labor Day. RealClearPolitics average of polls shows Democrat Joe Biden leading President Donald Trump by 10 percentage points, and the odds of a Democratic sweep have been rising. Biden has said he would raise corporate taxes, and some strategists say a sweep would be bad for business, due to increased regulation and higher taxes. Trump is expected to continue using tariffs, which unsettles the market, though both candidates are expected to take a tough stance on China. “If it looks like the Senate stays Republican than there’s less to worry about in terms of policy changes,” Sonders said. “I don’t think it’s ever as binary as some people think.” Stovall said a quick study shows that in the four presidential election years back to 1960, where the first quarter was negative, and the second quarter positive, stocks made gains in the second half. Those were 1960 when John Kennedy took office, 1968, when Richard Nixon won; 1980 when Ronald Reagan’s was elected to his first term; and 1992, the first win by Bill Clinton. Coincidentally, in all of those years, the opposing party gained control of the White House.
The stocks market’s strong second-quarter showing came after the Fed and Congress moved quickly to inject the economy with trillions in stimulus. That unlocked credit markets and triggered a stampede by companies to restructure or issue debt. About $2 trillion in fiscal spending was aimed at consumers and businesses, who were in sudden need of cash after the abrupt shutdown of the economy. Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin both testify before the House Financial Services Committee Tuesday on the response to the virus. That will be important as markets look ahead to another fiscal package from Congress this summer, which is expected to provide aid to states and local governments; extend some enhanced benefits for unemployment, and provide more support for businesses. “So much of it is still so fluid. There are a bunch of fiscal items that are rolling off. There’s talk about another fiscal stimulus payment like they did last time with a $1,200 check,” said Cummins. Strategists expect Congress to bicker about the size and content of the stimulus package but ultimately come to an agreement before enhanced unemployment benefits run out at the end of July. Cummins said state budgets begin a new year July 1, and states with a critical need for funds may have to start letting workers go, as they cut expenses. The Trump administration has indicated the jobs report Thursday could help shape the fiscal package, depending on what it shows. The federal supplement to state unemployment benefits has been $600 a week, but there is opposition to extending that, and strategists expect it to be at least cut in half. The unemployment rate is expected to fall to 12.2% from 13.3% in May. Cummins said he had expected 7.2 million jobs, well above the consensus, and an unemployment rate of 11.8%. As of last week, nearly 20 million people were collecting state unemployment benefits, and millions more were collecting under a federal pandemic aid program. “The magnitude here and whether it’s 3 million or 7 million is kind of hard to handicap to begin with,” Cummins said. Economists have preferred to look at unemployment claims as a better real time read of employment, but they now say those numbers could be impacted by slow reporting or double filing. “There’s no clarity on how you define the unemployed in the Covid 19 environment,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “If there’s 30 million people receiving insurance, unemployment should be above 20%.
This past week saw the following moves in the S&P:
The economy is moving in the right direction, as many economic data points are coming in substantially better than what the economists expected. From May job gains coming in more than 10 million higher than expected and retail sales soaring a record 18%, how quickly the economy is bouncing back has surprised nearly everyone. “As good as the recent economic data has been, we want to make it clear, it could still take years for the economy to fully come back,” explained LPL Financial Senior Market Strategist Ryan Detrick. “Think of it like building a house. You get all the big stuff done early, then some of the small things take so much longer to finish; I’m looking at you crown molding.” Here’s the hard truth; it might take years for all of the jobs that were lost to fully recover. In fact, during the 10 recessions since 1950, it took an average of 30 months for lost jobs to finally come back. As the LPL Chart of the Day shows, recoveries have taken much longer lately. In fact, it took four years for the jobs lost during the tech bubble recession of the early 2000s to come back and more than six years for all the jobs lost to come back after the Great Recession. Given many more jobs were lost during this recession, it could takes many years before all of them indeed come back.
The economy is going the right direction, and if there is no major second wave outbreak it could surprise to the upside. Importantly, this economic recovery will still be a long and bumpy road.
Nasdaq - Russell Spread Pulling the Rubber Band Tight
The Nasdaq has been outperforming every other US-based equity index over the last year, and nowhere has the disparity been wider than with small caps. The chart below compares the performance of the Nasdaq and Russell 2000 over the last 12 months. While the performance disparity is wide now, through last summer, the two indices were tracking each other nearly step for step. Then last fall, the Nasdaq started to steadily pull ahead before really separating itself in the bounce off the March lows. Just to illustrate how wide the gap between the two indices has become, over the last six months, the Nasdaq is up 11.9% compared to a decline of 15.8% for the Russell 2000. That's wide!
In order to put the recent performance disparity between the two indices into perspective, the chart below shows the rolling six-month performance spread between the two indices going back to 1980. With a current spread of 27.7 percentage points, the gap between the two indices hasn't been this wide since the days of the dot-com boom. Back in February 2000, the spread between the two indices widened out to more than 50 percentage points. Not only was that period extreme, but ten months before that extreme reading, the spread also widened out to more than 51 percentage points. The current spread is wide, but with two separate periods in 1999 and 2000 where the performance gap between the two indices was nearly double the current level, that was a period where the Nasdaq REALLY outperformed small caps.
To illustrate the magnitude of the Nasdaq's outperformance over the Russell 2000 from late 1998 through early 2000, the chart below shows the performance of the two indices beginning in October 1998. From that point right on through March of 2000 when the Nasdaq peaked, the Nasdaq rallied more than 200% compared to the Russell 2000 which was up a relatively meager 64%. In any other environment, a 64% gain in less than a year and a half would be excellent, but when it was under the shadow of the surging Nasdaq, it seemed like a pittance.
The US equity market made its most recent peak on June 8th. From the March 23rd low through June 8th, the average stock in the large-cap Russell 1,000 was up more than 65%! Since June 8th, the average stock in the index is down more than 11%. Below we have broken the index into deciles (10 groups of 100 stocks each) based on simple share price as of June 8th. Decile 1 (marked "Highest" in the chart) contains the 10% of stocks with the highest share prices. Decile 10 (marked "Lowest" in the chart) contains the 10% of stocks with the lowest share prices. As shown, the highest priced decile of stocks are down an average of just 4.8% since June 8th, while the lowest priced decile of stocks are down an average of 21.5%. It's pretty remarkable how performance gets weaker and weaker the lower the share price gets.
It's hard to believe that sentiment can change so fast in the market that one day investors and traders are bidding up stocks to record highs, but then the next day sell them so much that it takes the market down over 2%. That's exactly what happened not only in the last two days but also two weeks ago. While the 5% pullback from a record high back on June 10th took the Nasdaq back below its February high, this time around, the Nasdaq has been able to hold above those February highs.
In the entire history of the Nasdaq, there have only been 12 periods prior to this week where the Nasdaq closed at an all-time high on one day but dropped more than 2% the next day. Those occurrences are highlighted in the table below along with the index's performance over the following week, month, three months, six months, and one year. We have also highlighted each occurrence that followed a prior one by less than three months in gray. What immediately stands out in the table is how much gray shading there is. In other words, these types of events tend to happen in bunches, and if you count the original occurrence in each of the bunches, the only two occurrences that didn't come within three months of another occurrence (either before or after) were July 1986 and May 2017. In terms of market performance following prior occurrences, the Nasdaq's average and median returns were generally below average, but there is a pretty big caveat. While the average one-year performance was a gain of 1.0% and a decline of 23.6% on a median basis, the six occurrences that came between December 1999 and March 2000 all essentially cover the same period (which was very bad) and skew the results. Likewise, the three occurrences in the two-month stretch from late November 1998 through January 1999 where the Nasdaq saw strong gains also involves a degree of double-counting. As a result of these performances at either end of the extreme, it's hard to draw any trends from the prior occurrences except to say that they are typically followed by big moves in either direction. The only time the Nasdaq wasn't either 20% higher or lower one year later was in 1986.
In the mid-1980s the market began to evolve into a tech-driven market and the market’s focus in early summer shifted to the outlook for second quarter earnings of technology companies. Over the last three trading days of June and the first nine trading days in July, NASDAQ typically enjoys a rally. This 12-day run has been up 27 of the past 35 years with an average historical gain of 2.5%. This year the rally may have begun a day early, today and could last until on or around July 14. After the bursting of the tech bubble in 2000, NASDAQ’s mid-year rally had a spotty track record from 2002 until 2009 with three appearances and five no-shows in those years. However, it has been quite solid over the last ten years, up nine times with a single mild 0.1% loss in 2015. Last year, NASDAQ advanced a solid 4.6% during the 12-day span.
Tech Historically Leads Market Higher Until Q3 of Election Years
As of yesterday’s close DJIA was down 8.8% year-to-date. S&P 500 was down 3.5% and NASDAQ was up 12.1%. Compared to the typical election year, DJIA and S&P 500 are below historical average performance while NASDAQ is above average. However this year has not been a typical election year. Due to the covid-19, the market suffered the damage of the shortest bear market on record and a new bull market all before the first half of the year has come to an end. In the surrounding Seasonal Patten Charts of DJIA, S&P 500 and NASDAQ, we compare 2020 (as of yesterday’s close) to All Years and Election Years. This year’s performance has been plotted on the right vertical axis in each chart. This year certainly has been unlike any other however some notable observations can be made. For DJIA and S&P 500, January, February and approximately half of March have historically been weak, on average, in election years. This year the bear market ended on March 23. Following those past weak starts, DJIA and S&P 500 historically enjoyed strength lasting into September before experiencing any significant pullback followed by a nice yearend rally. NASDAQ’s election year pattern differs somewhat with six fewer years of data, but it does hint to a possible late Q3 peak.
([CLICK HERE FOR THURSDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
Friday 7.3.20 Before Market Open:
([CLICK HERE FOR FRIDAY'S PRE-MARKET EARNINGS TIME & ESTIMATES!]())
Friday 7.3.20 After Market Close:
([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
Micron Technology, Inc. $48.49
Micron Technology, Inc. (MU) is confirmed to report earnings at approximately 4:00 PM ET on Monday, June 29, 2020. The consensus earnings estimate is $0.71 per share on revenue of $5.27 billion and the Earnings Whisper ® number is $0.70 per share. Investor sentiment going into the company's earnings release has 71% expecting an earnings beat The company's guidance was for earnings of $0.40 to $0.70 per share. Consensus estimates are for earnings to decline year-over-year by 29.00% with revenue increasing by 10.07%. Short interest has increased by 7.6% since the company's last earnings release while the stock has drifted higher by 8.0% from its open following the earnings release to be 0.9% below its 200 day moving average of $48.94. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 11, 2020 there was some notable buying of 46,037 contracts of the $60.00 call expiring on Friday, July 17, 2020. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 8.4% move in recent quarters.
General Mills, Inc. (GIS) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.04 per share on revenue of $4.89 billion and the Earnings Whisper ® number is $1.10 per share. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 25.30% with revenue increasing by 17.50%. Short interest has decreased by 9.4% since the company's last earnings release while the stock has drifted higher by 2.7% from its open following the earnings release to be 7.8% above its 200 day moving average of $54.91. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, June 24, 2020 there was some notable buying of 8,573 contracts of the $60.00 call expiring on Friday, July 17, 2020. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 3.0% move in recent quarters.
FedEx Corp. (FDX) is confirmed to report earnings at approximately 4:00 PM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $1.42 per share on revenue of $16.31 billion and the Earnings Whisper ® number is $1.65 per share. Investor sentiment going into the company's earnings release has 61% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 71.66% with revenue decreasing by 8.41%. Short interest has increased by 10.4% since the company's last earnings release while the stock has drifted higher by 43.9% from its open following the earnings release to be 7.6% below its 200 day moving average of $140.75. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 25, 2020 there was some notable buying of 1,768 contracts of the $145.00 call expiring on Thursday, July 2, 2020. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 7.7% move in recent quarters.
Conagra Brands, Inc. (CAG) is confirmed to report earnings at approximately 7:30 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.66 per share on revenue of $3.24 billion and the Earnings Whisper ® number is $0.69 per share. Investor sentiment going into the company's earnings release has 66% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 83.33% with revenue increasing by 23.99%. Short interest has decreased by 38.3% since the company's last earnings release while the stock has drifted higher by 6.3% from its open following the earnings release to be 6.4% above its 200 day moving average of $30.68. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, June 11, 2020 there was some notable buying of 3,239 contracts of the $29.00 put expiring on Thursday, July 2, 2020. Option traders are pricing in a 4.7% move on earnings and the stock has averaged a 10.8% move in recent quarters.
Constellation Brands, Inc. (STZ) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.91 per share on revenue of $1.97 billion and the Earnings Whisper ® number is $2.12 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 13.57% with revenue decreasing by 13.69%. Short interest has increased by 20.8% since the company's last earnings release while the stock has drifted higher by 25.2% from its open following the earnings release to be 5.2% below its 200 day moving average of $178.34. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, June 9, 2020 there was some notable buying of 888 contracts of the $195.00 call expiring on Friday, October 16, 2020. Option traders are pricing in a 3.1% move on earnings and the stock has averaged a 5.7% move in recent quarters.
Capri Holdings Limited (CPRI) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $0.32 per share on revenue of $1.18 billion and the Earnings Whisper ® number is $0.34 per share. Investor sentiment going into the company's earnings release has 39% expecting an earnings beat The company's guidance was for earnings of $0.68 to $0.73 per share. Consensus estimates are for earnings to decline year-over-year by 49.21% with revenue decreasing by 12.20%. Short interest has increased by 35.1% since the company's last earnings release while the stock has drifted lower by 56.7% from its open following the earnings release to be 44.0% below its 200 day moving average of $25.67. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 4, 2020 there was some notable buying of 11,042 contracts of the $17.50 put expiring on Friday, August 21, 2020. Option traders are pricing in a 10.8% move on earnings and the stock has averaged a 6.7% move in recent quarters.
X Financial (XYF) is confirmed to report earnings at approximately 5:00 PM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.09 per share. Investor sentiment going into the company's earnings release has 25% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 55.00% with revenue increasing by 763.52%. Short interest has increased by 1.0% since the company's last earnings release while the stock has drifted lower by 1.2% from its open following the earnings release to be 37.7% below its 200 day moving average of $1.47. Overall earnings estimates have been unchanged since the company's last earnings release. The stock has averaged a 4.9% move on earnings in recent quarters.
Acuity Brands, Inc. (AYI) is confirmed to report earnings at approximately 8:40 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $1.14 per share on revenue of $809.25 million and the Earnings Whisper ® number is $1.09 per share. Investor sentiment going into the company's earnings release has 42% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 51.90% with revenue decreasing by 14.60%. Short interest has increased by 48.5% since the company's last earnings release while the stock has drifted higher by 2.4% from its open following the earnings release to be 23.4% below its 200 day moving average of $110.25. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.2% move on earnings and the stock has averaged a 8.2% move in recent quarters.
Methode Electronics, Inc. (MEI) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.77 per share on revenue of $211.39 million. Investor sentiment going into the company's earnings release has 45% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 24.19% with revenue decreasing by 20.53%. Short interest has increased by 6.2% since the company's last earnings release while the stock has drifted lower by 1.7% from its open following the earnings release to be 9.0% below its 200 day moving average of $32.97. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 8.1% move in recent quarters.
UniFirst Corporation (UNF) is confirmed to report earnings at approximately 8:00 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.17 per share on revenue of $378.28 million and the Earnings Whisper ® number is $1.25 per share. Investor sentiment going into the company's earnings release has 44% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 52.44% with revenue decreasing by 16.63%. Short interest has decreased by 2.7% since the company's last earnings release while the stock has drifted higher by 14.1% from its open following the earnings release to be 8.4% below its 200 day moving average of $186.14. Overall earnings estimates have been revised lower since the company's last earnings release. The stock has averaged a 7.0% move on earnings in recent quarters.
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%
33 purely directional trades - 57.5% win
18 long call or long put positions, +692, 55% win
15 call or put verticals, -121, 60% win
22 neutral / other trades
13 iron condors, +345, 77% win rate
7 strangles, -163, 71% win rate
1 straddle, -310, 0% win rate
1 butterfly, -83, 0% win rate
PTON call purchased and held through earnings, sold the morning of announcement +410
Trading the range on the daily chart in GLD from 158 up to 165, a mix of various calls +245
NKLA 30 put purchased before the close on the day it went north of 100, just a pure fade +215
EWZ 22/26 strangle that I held just way too long as it beat me up day after day from May 20-Jun 3, -316
ZM pre earnings vertical, fading another 2 SD move (the day it hit 200 for the first time). Was expecting a post-earnings selloff given the magnitude of the up move. Stock basically hasn't had a down tick since. Max loss -247
EWW 29 straddle, put on around the same time as the EWZ strangle. Rolled from Jun to Jul to no avail. Out at a -310 loss.
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:
Larger bid/ask spreads make it almost impossible to trade the higher priced names, even if you have a correct assumption. I have traded some bigger underlyings during this time like LULU and NVDA. They are just tough fills, both getting in and getting out. I almost want to say that you shouldn't even bother trading underlyings bigger than a 10 cent bid/ask spread with a small account.
Get an idea of the timeframe you're interested in holding before putting anything on. Have a plan for entering and exiting everything that goes beyond "I'll take this trade off at 50%". You can use TA, you can use a news catalyst, a binary event, just have something. Countless sources out there talk about trading a plan. It doesn't have to be the perfect plan, it just has to be "a" plan.
Undefined risk trades in tiny accounts need hard stops. Yes, some of the studies say that you'll do better without having fixed stop loss rules (50% of max loss, 100% of max loss) -- but what the studies don't say is the effect that it will have on you, mentally. I got pretty bent out of shape over how badly EWZ and EWW went against me -- much more than I expected. It made no sense, as I've lost way more on the turn of a card in .5 seconds and been unfazed. I was unprepared for the mental toll that it took waking up day after day, watching positions move further and further against me. Great time to be short calls during the mother of all rallies.
My initial plan for undefined risk trades in my account was that I would only do them in ETFs. Logic being that I'm just not going to wake up to an accounting scandal or a buyout and take a $1k loss on the chin. I later expanded my range into lower priced underlyings like BBBY, TLRY, and yes, AAL. But these ETFs can and do move (I learned the hard way) and can soak up a surprising amount of BP. It might be better to have 5 iron condors taking up $1000 of BP @ 200 each instead of 2 strangles @ 500 each.
My new questions :
My big wins felt like I simply leaned on my TA background or got lucky. My big losses, I sure felt like I earned those, through mistakes I've definitely since identified. The stuff in the middle, I'm just not sure. I'm up money, but it feels like I'm just spinning my wheels. My win rate is good, but I still struggle with expectations about how quickly a trade should progress. What is the next step of the process for a newer options trader? I've read some stuff on narrower spreads + more contracts vs. wider spreads and fewer contracts. Is there a number where I should just keep doing what I'm doing until I reach a specific # of occurrences? Should I even think about branching out into different strategies yet (ratio spreads, jade lizards, etc) or continue to work on these basics?
I still feel like I am super weak in delta management. In some cases I feel like I've taken a loss simply because I didn't know what the proper management techniques were. I understand the concept of rolling out in time for a credit, but I just don't think it's in my nature to hold trades for longer than a month, and even that is hard for me. At what delta is it appropriate to start thinking about hedging?
Every time I put on a credit spread for a 2-3 day move and am directionally correct, I often wish that I had just bought a naked option. I've caught several big moves this way in things like AAPL; most recently I bought the FB dip to the 50 day MA around 215 and took it off today at 225 (which was always my plan) -- it leads me to wonder if my expectations for credit spreads are completely out of line. I can't lie, it feels bad to catch a 10 point move and only make $40, haha. What is the ideal timeframe for a credit spread to be left on? Is it better to just buy premium with a stop loss and have a more profitable risk/reward equation for situations like the above where the only intent is to hold for a couple days?
Here's a random question -- other than when the BPR hit is too much (ie names over $50) for undefined risk, would you rather hold 1) a strangle for 10-14 days or 2) an iron condor for 25-30 days? So far my criteria for IC vs strangle has largely been driven by the risk profile and BPR and not so much profit potential in X number of days. If you're collecting the standard 1/3rd on the IC and taking the trade off at 50% (if you're lucky) , it seems like it takes about a month to get there, most of the time.
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.
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. Idomybit 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.
Our fourth release of the year, MAME 0.221, is now ready. There are lots of interesting changes this time. We’ll start with some of the additions. There’s another load of TV games from JAKKS Pacific, Senario, Tech2Go and others. We’ve added another Panorama Screen Game & Watch title: this one features the lovable comic strip canine Snoopy. On the arcade side, we’ve got Great Bishi Bashi Champ and Anime Champ (both from Konami), Goori Goori (Unico), the prototype Galun.Pa! (Capcom CPS), a censored German version of Gun.Smoke, a Japanese location test version of DoDonPachi Dai-Ou-Jou, and more bootlegs of Cadillacs and Dinosaurs, Final Fight, Galaxian, Pang! 3 and Warriors of Fate. In computer emulation, we’re proud to present another working UNIX workstation: the MIPS R3000 version of Sony’s NEWS family. NEWS was never widespread outside Japan, so it’s very exciting to see this running. F.Ulivi has added support for the Swedish/Finnish and German versions of the HP 86B, and added two service ROMs to the software list. ICEknight contributed a cassette software list for the Timex NTSC variants of the Sinclair home computers. There are some nice emulation improvements for the Luxor ABC family of computers, with the ABC 802 now considered working. Other additions include discrete audio emulation for Midway’s Gun Fight, voice output for Filetto, support for configurable Toshiba Pasopia PAC2 slot devices, more vgmplay features, and lots more Capcom CPS mappers implemented according to equations from dumped PALs. This release also cleans up and simplifies ROM loading. For the most part things should work as well as or better than they did before, but MAME will no longer find loose CHD files in top-level media directories. This is intentional – it’s unwieldy with the number of supported systems. As usual, you can get the source and 64-bit Windows binary packages from the download page. This will be the last month where we use this format for the release notes – with the increase in monthly development activity, it’s becoming impractical to keep up.
MAME Testers Bugs Fixed
07560: [Crash/Freeze] (cave.cpp) hotdogst: Using debugger memdump command causes MAME to crash. (O. Galibert)
07603: [Documentation] (snes.cpp) snes [asterix]: Release year does not match title screen. (ArcadeShadow)
07615: [Documentation] (cninja.cpp) mutantf, mutantf2, mutantf3, mutantf4, deathbrd: Release years are incorrect. (jkburks)
Crazy Bonus 2002 (Ver. 1, set 3) [Ioannis Bampoulas]
Frantic Fred (Release 2) [Brian Troha, The Dumping Union]
Mario Kart Arcade GP (Japan, MKA1 Ver.C, update) [xuserv]
NCR Class 3433 [rfka01]
Olivetti Prodest PC 1 [Carl, rfka01]
Roland MKS-100 Digital Sampler [DBWBP]
Roland S-550 Digital Sampler [DBWBP]
Saitek Kasparov Renaissance (set 2) [hap, Berger]
Samsung Deskmaster 286-12 [rfka01]
Schneider Rundfunkwerke AG Euro AT [rfka01]
SciSys Kasparov Leonardo (set 2) [hap, Berger]
Siemens PG 750 [rfka01]
Siemens PG-750 486 EISA [rfka01]
Striker Xtreme (1.00) [PinMAME]
Zenith Data Systems Z-248 [rfka01]
New working software list additions
The Latin Hangman (Revision 1004) (cleanly cracked), The Sea Voyagers (cleanly cracked), The Wreck of the BSM Pandora (cleanly cracked) [4am, Firehawke]
Minerals of North Dakota (Version 1.0) (cleanly cracked), North Dakota Cities With Population 500 and Above (Version 1.0) (cleanly cracked), North Dakota Cities with Population Under 500 (Version 1.0) (cleanly cracked), North Dakota Counties (Version 1.0) (cleanly cracked), North Dakota Explorers (Version 1.0) (cleanly cracked), North Dakota Indian Tribes (Version 1.0) (cleanly cracked), North Dakota Parks and Historical Sites (Version 1.0) (cleanly cracked), North Dakota Plants (Version 1.0) (cleanly cracked), North Dakota Pride (Version 1.0) (cleanly cracked), North Dakota Symbols (Version 1.0) (cleanly cracked), North Dakota U.S. Senators and Representatives (Version 1.0) (cleanly cracked), North Dakota Wildlife (Version 1.0) (cleanly cracked), Notable People of North Dakota (Version 1.0) (cleanly cracked) [Frank Cifaldi, 4am, Firehawke]
apple2_flop_orig: 816/Paint (Version 3.1), ABM, Alien Munchies, Aliens, The Bard's Tale III: The Thief of Fate, Crosscountry California, Hobgoblin's Revenge, John Madden Football, Kampfgruppe (Version 1.0), Lady Tut, The Latin Hangman (Revision 1004), Merlin's Castle, Meteoroids in Space, Microbe, Mines of Titan, Super Huey, Terrapin Logo Plus (Version 1.1), Tink!Tonk! Tonk in the Land of the Buddy-Bots, Typhoon of Steel (Version 1.0), Who Stole Cinderella's Slipper? (Version 2.0), Wild West Math Level 4, Will O The Wisp [4am, Firehawke]
c64_cass: Alice in Videoland, Boulder Dash 4, Collapse, Gemini Wing, Grandmaster Chess, The Greed Monster, Hacker II, Head Over Heels, James Pond 2: RoboCod, Kettle, Master Chess, Micro Rhythm, Midnight Resistance, Pulse Warrior, Realm, Summer Camp, Tetris [c64tapes.org, Zoë Blade]
cgenie_cass: BängBäng - 2 player gun fight, Colour-Assembler NE555 timer chip information and calculator [Jürgen Buchmüller]
dai_cass: De Acrobaten (NL) [Robbbert]
Baseball 4, Pinball [hap]
Football 4 [hap, Sean Riddle]
Space Invader 2 [hap, Kevin Horton]
fmtowns_cd: The 4th Unit 5 - D-Again (Demo), Air Warrior V2.1L10, Ed Bogas' Music Machine, Ehon Writer - Denshi Ehon - Aesop World Dai-1-shuu, Gadget - Invention, Travel, & Adventure, GEdit Towns, HomeStudio V1.2L10, Hyper Address (HMB-106), Kanji Land 3-nen, Kid Pix Jr., Kotoba Asobi - CDView HiP Catch, Lord of the Rings, Vol. I, Master CD - Install Model-you, My Fair Lady CAN III. Intermediate, New Horizon CD Learning System II - English Course 1 (FM Towns Marty version), Niko², Oto to E no Deru Eigo Jisho No. 1 - Start with Words, The Queen of Duellist (HME-166A), Sargon V - World Class Chess, Software Contest Nyuusen Sakuhinshuu 1 (HMC-139), Software Contest Nyuusen Sakuhinshuu 1 (HMC-139B), Software Contest Nyuusen Sakuhinshuu 3, Virtuacall 2 [redump.org, r09]
fmtowns_flop: Ai Shimai - Futari no Kajitsu, Doukyuusei 2 Special Disk, Music Pro-Towns (1990-05-23), S. A. 2, Shangrlia 2 Special Disk, Super Ultra Mucchin Puripuri Cyborg Maririn DX [r09]
hp86_rom: HPIB service ROM, Service ROM [F.Ulivi]
Indiana Jones and the Last Crusade - The Action Game (5.25"), SimLife [ArcadeShadow]
Conflict Europe, Conquest of Camelot - The Search for the Grail, Harpoon, Harpoon Battleset 2 - North Atlantic Convoys, The Software Toolworks Game Pack 3 [Flyers80, FakeShemp]
Leisure Suit Larry Goes Looking for Love (In Several Wrong Places) [Gypsy Dave, FakeShemp]
3-D FloorPlan Designer V2.0, Ad Lib Instrument Maker V1.51, Ad Lib Juke Box Registration Bonus Disk V1.51, Ad Lib Juke Box Registration Bonus Disk V1.62, Ad Lib Juke Box V1.5, Ad Lib Juke Box V1.6, Ad Lib Juke Box V1.64, Ad Lib Visual Composer V1.51, SYSGRATION Mouse Driver 7.03 (5.25"), SYSGRATION Mouse Driver 8.00 (3.5"), SYSGRATION Mouse Driver 8.00 (5.25") [Justin Kerk]
Rex Nebular and the Cosmic Gender-Bender, Space Quest I: Roger Wilco in the Sarien Encounter (VGA release) [ArcadeShadow]
Jurassic Park [Flyers80, FakeShemp]
Pepper's Adventures in Time [Gypsy Dave, FakeShemp]
itt3030: Master boot disk, System boot disk [Robbbert]
timex_cass: 4K Race Refueled+, ACZ General Ledger 2000, AERCO 2068 Printer Driver V12, AERCO CP68 Printer Driver, Androids, Aritmetica, Artworx, Assalto A Embaixada, Astro Blaster (bootleg?), Auto Analyzer, Basic 64 Demo - TC 2048, Basic 64 Demo - TC 2068, Blam, Blind Alley, Britain Invaded, Budgeter, Capitalization Master, Checkbook Manager, Chess, Circuit Board Scramble, ColorPRINT, ColorTILE, Copy, Cozinheiro, Crazy Bugs, Crossfire, Cyber Zone, Demo (Keyboard Tutorial, Turtle Graphics, Home Accounting), Demonstração TC 2048, Desktop Publisher, Disassembler, Dragmaster, Financial Record Keeper, Flight Simulation, Frogger, Fun Golf, Fórmula 1, Guardian, Guerra estelar, Gulpman, Herói, Home Improvement Planner, Horace & the Spiders, Horace Goes Skiing, Horácio e as Aranhas, Hot Z Disassembler v1.43, Hot Z Disassembler v1.84, Hot Z Disassembler v1.95, Hungry Horace, Interface RS232, Invasores Lunares, JRC Catalog 3, JazzoFire, Keyword v1, Keyword v5.0, Language Usage, Math Wizardry I, Math Wizardry II, Minesweeper, Motociclismo, Mscript, Mscript (rerelease), Multi-Draw 2068, Musicola, Omnicalc 2, Orçamento Doméstico, Penetrator, Perigos Na Selva, Personal Home Finance, Personal Portfolio Manager, Pro Pinball, Pro-File 2068, Programa de a presentaçao, Quadra-Chart, Relocatable AERCO Centronics Print Driver, Simple Roulette, Smart Terminal 1, Space Raiders, Speech Synthesizer, Spelling I, Spelling II, States & Capitals, Stock Market Simulation, Super Hot Z Disassembler v2.51, Tape Corrector, Tasword Two, TC 2048 Demonstraçao, TC2048 Hi-Res Colour Demo, TechDraw Jr., Timachine, Time Teacher I, Time-Gate, Timex TC2048 Hi-Colour Demo, Toolkit, The Trader Trilogy, Travel with Trashman, TS-2068 DEMO, Upload-2000, VU-3D, VU-Calc, VU-File, War in the East, Window Print 32, Window Print 64, Word Play I, Word Play II, Wordcross, The Worx, Zeal Disassembler, Zeus Assembler [World of Spectrum, Spectrum Computing, ICEknight]
vgmplay: The Berenstain Bears' Camping Adventure (GEN/MD), Loadstar (GEN/MD), Medal City (GEN/MD), MegaMind (GEN/MD), MegaRace (GEN/MD), Paddle Fighter (GEN/MD), Phantasy Star II Text Adventures (GEN/MD), Riddle Wired (GEN/MD), Robot Battler (GEN/MD), Slam City with Scottie Pippen (Sega CD) (GEN/MD), The Smurfs (GEN/MD), Space Harrier 32X (GEN/MD), Spirou (GEN/MD), Tintin in Tibet (GEN/MD), Waterworld (GEN/MD), X-Men - Mind Games (Beta) (32X) (GEN/MD), Yogi Bear's Cartoon Capers (GEN/MD), Zany Golf (GEN/MD) [Project2612, Tafoid]
vsmile_cart: Avventura nel Parco Alfabeto (Italy), Disney/Pixar Toy Story 2 - Operazione: Salvataggio di Woody! (Italy), Nickelodeon Spongebob - Un giorno da Spugna (Italy), Spider-Man & Friends - La Sfida del Dottor Ock (Italy), V.Smile Football Club (Italy) [tag2015]
pi_storyreader_cart: 101 Dalmatiner (Germany), Arielle - Die Meerjungfrau (Germany), Bambi (Germany), Cinderella (Germany), Pinocchio (Germany), Schneewittchen und die Sieben Zwerge (Germany), Die Schöne und das Biest (Germany), Susi und STROLCH (Germany) [TeamEurope]
picno: Nontan to Issho Anime Stamp [TeamEurope]
4-in-1 (Flashcard Fishing, Break a Brick, Balloon Juggling, Penguin Maze) (US) [Sean Riddle, David Haywood, anonymous]
Dodgeball (US) [Sean Riddle, David Haywood, Peter Wilhelmsen, anonymous]
vsmile_cart: Disney Cenerentola - I desideri magici di Cenerentola (Italy, rev. 1), Disney/Pixar Toy Story 3 (Italy), Disney/Pixar Wall-E (Italy) [tag2015]
vsmilem_cart: Disney La Maison de Mickey (France, Rev. 005), Marvel Spider-Man & ses amis - Missions Secrètes (France), Mon Youtou tout fou! (France) [DisizDream]
cpu/z180: Moved some internal registers out of the base class, and implemented software-selectable clock divider. [AJR]
cpu/mcs96: Added N8097BH and P8798 variants, and changed some variants to use 16-bit buses. [AJR]
cpu/upd78k updates: [AJR]
Fixed disassembly of DBNZ and MOV A,!addr16 instructions for µPD78K/III.
Fixed disassembly of SFR-mode read/modify/write instructions for µPD78K/I and µPD78K/II.
atarist.cpp: Fixed the 68K side of ACIA serial communications (keyboard microcontroller is not fully cooperating yet). [AJR]
acia6850: Fixed transmission of a spurious character following master reset. [AJR]
machine/upd7001.cpp: Added NEC µPD7001 analog-to-digital converter device. [AJR]
dgnalpha.cpp: Removed old hack to ignore first floppy drive controller interrupt (now prevents disk boot). [AJR]
mpu4dealem.cpp: Adjusted v4dealem CRT controller clock to make refresh rate more reasonable. [AJR]
cpu/h8500: Added Hitachi H8/500 disassembler and skeleton CPU device family. [AJR]
pasopia7.cpp: Use CRT controller to help draw screen [AJR]
pasopia.cpp: Added RS-232 serial interface. [AJR]
bus/pasopia: Added Toshiba Pasopia PAC2 slot, with RAM, Kanji ROM and expander options. [AJR]
pasopia.cpp, pasopia.cpp: Replaced fixed expansions with PAC2 slots.
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):
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 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:
Effect of earnings / PR / binary events on the option contract - this reaction may be different than the underlying stock reaction to the event
The Black-Scholes option pricing model allows one to understand how the premium will change - note that "all models are incorrect, but some are useful"
The "Greeks" give you a sense about how prices change when the stock price change - Meet the Greeks video
Position Management - when to adjust, close, or roll
Legging position into strangles/straddles - more advanced position with higher risk / higher reward
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!**
Differences Between Binary Options Trading and Real Options Trading - 85% Loss vs 100% Loss. In binary options trading, when you lose a trade, they actually give you back 15% of the money you invested with, making it a 85% loss while in real options trading, you can lose up to 100% of the money you put in, yes, the whole thing. Are binary options charts and forex charts the same Binary option tradind course. There are actually a lot of people that are trying their luck on the stock market and do not know are binary options charts and forex charts the same about binary options and what they are Jun 25, 2020 · Binary options depend on the outcome of a yes/no proposition. The main features of binary options are similar to the traditional options. The same inputs apply even when setting prices for binary options. The main difference between these two, however, is the payoff structure when binary options expire. When binary options expire, there can only be two possible outcomes, either 100 or 0. Trading stock binary options takes some understanding of how stocks behave in order to profit from it. Stocks constitute one of the asset derivatives that can be traded on the binary options market. Usually, a trader will have access to trade hundreds of stocks, as brokers will list several stocks from the different stock exchanges across the Binary options present traders with a unique way to trade a wide array of financial assets, and for the average trader, this is a very good thing. Still, many people wonder if trading these options is as profitable as trading within the traditional stock market .
Binary Options Explained - Can You Really Make Money With Binary Options?
Forex and Binary options strategy. In this video, the Forex and binary options grail indicator is presented. This is one of the most accurate binary options strategy on the internet. Nadex is the leading US-based CFTC-regulated financial exchange for binary options and option spreads. We’re located in the heart of Chicago’s financial district. Subscribe to learn more about ... In this video I explain the main differences between Forex and Binary Options trading. www.fxloungebinary.com. #Binary_Options_Trading #Binary_Option_Trading #Binary_Options_Broker #BinaryOptionsTrading #What_is_Binary_Options_Trading Ready to start trading stocks and options consistently and profitably ... The Difference Between Forex and Binary Options Trading - Binary Option vs Forex Trading. There are some major differences between binary options trading and forex trading. They are 1. Spread. 2 ...