Most profitable way to play P3
Hello,
I'm trying to play P3 with max leverage and I want to throw some options out there, others to bring their own advices, so everyone can profit and learn. I'm not experienced in options or futures. I just want to put everything on the table, so we can find most profitable ways to take advantage of an eventual crash (if we will see our money back from the brokers, but that's a different story).
I'm thinking for example to buy FAZ (or other 3x bearish ETF) calls like farthest OTM Jan 11 would it be a good choice you think? What about shorting e-minis with 1:200? I tried to play the EUR/USD but so far not much success because I didn't stay in and then got whipsawed. What about stocks that went up too much and buy farthest OTM puts for them or shorting their SSF?
So, if u have few thousands to burn and you know for sure that S&P will be 300 by year end, where would you invest your money for maximum profit?
Thanks a lot and good luck!
I'm trying to play P3 with max leverage and I want to throw some options out there, others to bring their own advices, so everyone can profit and learn. I'm not experienced in options or futures. I just want to put everything on the table, so we can find most profitable ways to take advantage of an eventual crash (if we will see our money back from the brokers, but that's a different story).
I'm thinking for example to buy FAZ (or other 3x bearish ETF) calls like farthest OTM Jan 11 would it be a good choice you think? What about shorting e-minis with 1:200? I tried to play the EUR/USD but so far not much success because I didn't stay in and then got whipsawed. What about stocks that went up too much and buy farthest OTM puts for them or shorting their SSF?
So, if u have few thousands to burn and you know for sure that S&P will be 300 by year end, where would you invest your money for maximum profit?
Thanks a lot and good luck!
Replies to This Discussion
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Permalink Reply by badmofo1024 on -
I'm subscriber to EWI. I agree with the direction we are headed. However, I've learned over the last couple of years that they get a bit overconfident. Overconfidence in a view will result in narrow minded trading - and lots of losses. There is NO reason why we *need* to be in P3.... while it is a strong possibility.
I've liked FAZ, but since it's triple your timing needs to be 100% to hold onto the gains. I've outlawed x3 trading from my portfolio all together... sticking with safer x2.
My advice is to lighten up on the EWI... trade with the the trend (currently down), profit and preserve capital. Betting too much on a position will lead to ruin.
Good trading.
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Permalink Reply by Idan Koren on -
I think that financials will get hard hit, but tech which was bubble like will get hit the hardest. Stocks that do not deserve to be where they are will fall very fast, like YHOO.
I would short sell a basket of individual names, and not just ETFs.
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Permalink Reply by rtrs111 on -
Definitely agree to both so far, even if someone tells you the universe is gonna crash, you shouldn't bet the farm on it. Like EWI said, better stay in cash, like at least 80% flat I'd say, minimum, and use stops no matter what.
But, if you are going to invest a little - to recover the damage from P2 let's say :) - I agree with a basket of stocks, maybe some ETFs (I got also burned with FAZ, I just threw it out there (and so far it didn't move much)) - everything else is probably too crazy. I got already a small list with few candidates: I am planning deep OTM Jan 11 for them. For me the risk is not if it's gonna happen (given how many problems there are everywhere, which are impossible to be solved, let's agree - not that I want to see like a martial law, but it's not my fault and I want to be on the right side with my money), but to not see your money back after a third of a third of a third...
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Permalink Reply by Shiva on -
How about BAC puts? They look cheap. If financials should take a hit, this one will take it hard. I am seriously considering BAC Mar $14 puts.
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Permalink Reply by Jeff Graubart on -
Never go long a 3x bull or bear fund for more than 1 or 2 days. They are designed to lose money over time. Don't count on S&P 300 in tomorrows dollars. They are apt to turn the printing presses on full speed if the S&P dips below the March lows. If I had a few thousand to gamble on a drop to 300 hundred by year end, I would divide my money between puts on the S&P or QQQQ that sell for around 30 cents (S&P) or 10 cents (QQQQ) in every available month between now and then (a downward diagonal) or some variation of that theme and would always wait until opex to sell, unless they are worthless, which would be the most common outcome. But the most profitable and stressful way to play P3 is by gaining eperience as a trader, finding trading vehicles and companies and indexes you feel most comfortable with, using TA, following the trend and always CYA.
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Permalink Reply by Pablo413 on -
If you are just playing the market casino with a few thousand dollars that you will never miss - pay your money and take your chances. I have a couple of thousand dollars in FAZ April 2010 $20 call options for just this reason. I like to gamble, but only for small amounts that I don't mind losing. At best I will hold to expiration and have a profit many times the initial bet. At worst - I lose the bet and blow two grand.
If you are investing real trading capital in options and don't have much experience - please watch this video. It may be the difference between life and death to your trading account.
http://www.youtube.com/watch?v=JlfzdcbCAM8
By the way - Momentumoptionstrading.com has made me a very nice bundle of cash without much risk, and they shoot very straight with their fills and performance history. Their results are real, not theoretical. The best way to make money is to pay someone else to think for you. These guys think very well.
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Permalink Reply by RICHARD (FRBN) on -
IM buying puts on companies that pay no dividend and have little growth opportunity in this market. MTD is one im in as it sells expensive commercial scales. even with a weak USD$ they are struggling. the stock is $95 and pays no dividend.
if a stock pays dividends more than 2% i stay away from it unless its heavily in debt. PBI is one i trade that has a booster dividend but is heavily in debt. they don't have the money to prop up thier stock price and you'd have to expect them to cut the dividend to conserve capital sometime this year. the chart says so. im not in PBI right now. got out when it was oversold and im waiting for it to complete this timid bounce. bottom line you go with the charts and even if you take all the caution like me, some will go against you. im not one to put everything ive got into one thing.
like to keep some $$ free for day trading options on stocks making big moves. this is the most
fun but im not making much doing it so far considering the time invested.
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Permalink Reply by rtrs111 on
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I've got some Jan deep OTM puts in HGSI, few Apr calls in TZA (down so far) and surprisingly good CTIC puts, hopefully one of them will bring me some profit. Atm, thinking about some bank (UBS?) or AIG maybe? I'm an optimist pessimist as u can see :) Now, cross my fingers and bring the popcorn!
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