Pops
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Investing General Discussion
- Thread starter Furious
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Guest, it's time once again for the massively important and exciting FoH Asshat Tournament!
Go here and give us your nominations!Who's been the biggest Asshat in the last year? Give us your worst ones!
TJT
Mr. Poopybutthole
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I'm with you dude. I've said multiple times I'm buy and hold. I've never sold a stock and I've only dabbled in options a very small amount.
Blazin
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Blazin
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Sanrith Descartes
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Blazin
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Ravishing
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Im like you. I got burned on too many get-rich-quick schemes.
Today is crazy, -2100 to -1000 to -1400 in just the past 30mins.
I have some buy orders ready at my target prices. My gut says tomorrow is another big down day, nobody buys/holds through a weekend in a bear market.
Sanrith Descartes
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152$ strike
Jun 19 exp
3.21$ cost basis
Edit - and the repo action just sent TLT through the roof.
Furry
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This is a bad idea. It looks like they're doing something on paper, but the something they're doing is either going to backfire and amplify losses to come or crash the currency which is even worse then the stock market imploding for a few months.
Sanrith Descartes
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The banks and creditors are going to need liquidity when lots of companies start drawing down on their existing lines of credit. This is actually a good move to stem off a liquidity issue.
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Blazin
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Might want to take profit, the fed just blew up part of your trade unfortunately. The coming stimulus is going to keep rates depressed. The snap back off the low yields already happened with the TLT move from almost $180 to $155. I think the TLT is likely to settle in the $160s until we come through the other side and start seeing economic numbers ramping up. Obviously you understand we are in extreme volatility which makes reading where we can go rather difficult. If this all falls apart then yields will continue their run lower and you'll lose your gain, but if you believe that the Fed is going to stabilize the treasury markets then the decline is likely to halt at least for the period of your put and there is little profit left for you.
Yields making a sizable move higher in the near term appears highly unlikely, you got the snap back (good trade) but holding it too long has a decent chance of souring.
Furry
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Blazin
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Not sure you understand the part of our financial system they are addressing. If you want the bearish view, this move does not fix the virus crisis at all, they are simply trying to stop it from creating a liquidity crisis.
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Big Phoenix
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Sanrith Descartes
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Thanks. I'm never one to be greedy. Double or triple my investment in a month is a wonderful thing.
Sanrith Descartes
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I'll try as an amateur. So as companies (like Boeing) start using their credit lines to fund operations in the short term that means the banks offering the lines of credit need cash to loan them. This can create a cash shortage for the banks.
The repo action basically buys (in this case) 500b (or a trillion, whatever the number is) of 3 month dated treasuries the banks are holding. Thus the treasuries turn to cash and the cash can be used to fund the credit line drawdown and the like.
At least that is my understanding of it.
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Blazin
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Pretty much nailed it. Only add that large corporations often tap the corp bond market which is currently seized up so they turn to their lines of credit and max them out. The other thing they do was happening this morning in the credit market, and that is selling any other assets to generate cash. So other bond holdings being dumped (like muni's). Fed steps in to say "Hey stop doing that! We have all the cash you want" Fed makes the numbers huge to try to settle the institutions to not panicking and believing that sufficient money supplies will be made available.
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