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Trading Alert – Calling a Stock Market Crash Between End of August, End of September

rafifarber Stock Trading, The Jewish Libertarian Blog , ,

I explain why here.

Read that first.

Yesterday I entered the following positions in order to prepare:

4 contracts XBI Sept. 15, 2017 61 PUT, at $0.19 a contract, total cost $76

17 contracts XBI Sept. 15, 2017 62 PUT, at $0.21 a contract, total cost $425

From July 18th, 2015 (today) to the low on August 24th, 2015, XBI fell 33%.

I’m expecting something similar to happen again. My guess is August 27th but it could be any time before October.

If what happened then plays out again, the target low on XBI will be $52.50.

At that price, the 61 PUTs will be worth $8.50. The 62 PUTs will be worth $9.50.

Total risk = $501

Maximum gain on 61 PUT: $3,324

Maximum gain on 62 PUT: $18,801

XBI on August 24th, 2015:

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After all that, finally covering my Greek put option shorts

rafifarber Stock Trading

Months ago, around the last Greek elections when Syriza was elected, I went short the National Bank of Greece. I bought 20 contracts of a 50 cent January 2016 put for 10 cents each. For those who aren’t familiar with options, a put gives me the right to sell a security at a certain price by a certain date. 10 cents a put really means $10, because each contract controls 100 shares.

So 20 contracts cost me a grand total of $200. It was a nickel and dime trade, because had I known economics back in 2008 (I wasn’t introduced until 2012) I would have gone short Greece then and made a lot of money. I wasn’t confident I would still make money on my contracts after Varoufakis resigned and the Greeks took the bailout, but I kept them anyway and the National Bank of Greece kept on plummeting down.

So today I sold all 20 puts for 19 cents a contract. NBG is at $0.70 a share. I think I bought them when it was at $1.50 or so. The $0.50 puts are still not in the money, but if someone wants to buy them for $0.19, they are betting NBG will go to $0.29. I don’t know if they’ll get that far. So I sold them.

(Disclaimer for all the government people, I love you all dearly: I am not advising anyone. No one should listen to anything I ever say about anything. This is all for raunchy entertainment purposes.)