Quick thoughts - 12 Aug
Most stocks and indices experienced a sell-off during the second half of the trading hours yesterday. That’s the first sign of weakness after the recent post-CPI rally.
Will the weakness continue today? Pre-market is green now. Let’s see how the market moves later.
My view (not financial advice): we may not have drastic movement today as it’s option expiry day. But if there’s any, the probability of pull back is higher.
Puts buyers will be losing lots of money by now given the fierce rally since July and also after Wed’s CPI report. So even if we have a small to medium pullback today, those who have been holding on to Puts will still likely be in a loss due to time decay (Theta)
For call buyers who only hopped on the boat a day later after the CPI print, they could be in the red too if the market continues its pullback from yesterday (even if it’s a small one).
That’s how market (makers) work(s). They will maximise their returns by wiping out as many option premiums as possible. Hence, it’s important to take profits off the table when you have the chance. Don’t be too greedy.
But you’re a long term buy-and-hold investor, then.. it doesn’t really concern you haha. Buy into good companies and wait for the returns in 5 years’ time (or maybe longer![]()
). The good thing is, you will be able to sleep better at night ![]()
If you have found my posts useful, please help to like and subscribe my YouTube channel / videos. Thanks!
Will the weakness continue today? Pre-market is green now. Let’s see how the market moves later.
My view (not financial advice): we may not have drastic movement today as it’s option expiry day. But if there’s any, the probability of pull back is higher.
Puts buyers will be losing lots of money by now given the fierce rally since July and also after Wed’s CPI report. So even if we have a small to medium pullback today, those who have been holding on to Puts will still likely be in a loss due to time decay (Theta)
For call buyers who only hopped on the boat a day later after the CPI print, they could be in the red too if the market continues its pullback from yesterday (even if it’s a small one).
That’s how market (makers) work(s). They will maximise their returns by wiping out as many option premiums as possible. Hence, it’s important to take profits off the table when you have the chance. Don’t be too greedy.
But you’re a long term buy-and-hold investor, then.. it doesn’t really concern you haha. Buy into good companies and wait for the returns in 5 years’ time (or maybe longer
If you have found my posts useful, please help to like and subscribe my YouTube channel / videos. Thanks!
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Violets : doesn't look weak to me
Cow Moo-neyOP Violets: Yup looks bullish at the moment, seems like no pullback today
Nubby : Any tips master
Cow Moo-neyOP Nubby: No tips and not a master haha. My general view of the market is still bearish, and it’s tough to go against the majority and also this fierce rally
Soulbender : This aged well
Cow Moo-neyOP Soulbender: I was wrong