The end of the US stock market is nearing

hey money maker, if you use the quarter of mil and the price drops to 218 or lower on the following monday, you still make money the options however yield a loss, while making money is important so is managing risk.

Well, if it dropped below 218 the next Monday, options would make even more money, because the expiration date wasn't until Feb7. But you should NEVER wait until expiration to close your option trade if you are profitable, just close it whenever you want. In this example, it was closed at a $4000+ profit, so it doesn't really matter what it does the next week. But I don't think that was your point....

I think your point was if it doesn't start it's downward move until AFTER the expiration date, then you are correct, you will lose your $3000. But, if it doesn't start it's downward move until AFTER the expiration date, then it was just a bad trade to begin with! Your decision methodology for choosing your option pick/strike price/expiration date would definitely need to be reworked!

If you are confident enough to put $230K on a short trade, you should be comfortable enough to put $3000 on a PUT option, right? Because prior to either you would have to know that it is going down (and roughly the timeframe of the move) and a guestimated amount you are expecting the drop to be. If you thought QQQ was going to drop within the next three weeks, just purchase a PUT option with a longer expiration date.

As far as risk management, Regulation T requires you to have, at a minimum, 150% of the position value when you open the short trade (different brokers may require more than the minimum 50%). In this case, that would be the $230,000 for the positions PLUS an additional $115,000, or at least $345,000 in your account. If it moves against you, you still need to maintain the margin requirement. So let's say instead of falling to $218, it jumps up $25...you don't panic because you still think it will drop to $218 eventually.....but now the margin requirement is $382,500 instead of $345,000....since you only have $375,000 in your account, you get a margin call and they liquidate your position automatically. Since you shorted 1000 shares, you just lost $25,000! If it jumped up $25 and you owed PUT options, you would only lose the amount invested, or $3000. Much less risk with PUTs vs. shorting because you know with options the maximum amount you can lose, and you don't always know with shorting.

I believe in making your money work for you. I just don't consider using $230,000 to make $5000 good money management when you can use $3000 to make nearly the same profit....why have $345,000 tied up in this trade when you can get nearly the same results with only $3000 tied up?

https://halturnerradioshow.com/index.php/en/news-page/news-nation/coronavirus-in-china-20-million-quarantined-2-8-million-infected-112-000-dead
nice reason and excuse for a huge correction... such fundamental reasons always come into play whenever the market has a technical picture in favor of a big move one way or another...

HI Igor, I think Donald Trump has been less dishonest and told less lies than this fellow. However I do suspect the situation is worse than reported officially. On another topic, how do you define a short term medium and long term trend , perhaps the short term is 6 - 21 days ? Medium 21- 90 days and against the longer term trend ? longer term 90 - 200 days ? As you don't mention time frames in your book I am interested to know your thoughts on this matter and if you would agree with the suggested periods ? PS any cases in Moscow ?

nope... short-term in my view is ranging from intraday to intraweek... medium-term is intramonth...longer-term might take a few months or even a few years in rare cases... though because everything is also based on measured objective targets then it's not possible to predict in advance what kind of position it might become as timing is the most difficult aspect of trading to predict in advance...

what's is good about diamonds and a couple of other formations is that they are more or less symmetrical time-vise also and therefore sometimes it's possible to evaluate timing in advance as well...

when it comes to current China situation I think there is a great chance that the market will gap down on the Monday opening... in case it manages to take out current year's bottom then there will be a great chance that we have already seen the tops on major indices for the entire future ahead...

Thanks for the reply Igor, what other formations appear symmetrical time wise in your experience ? I am unaware of any texts offering symmetrical relationships time-wise and I believe even your own texts down delve into this area. An opportunity for another book? I remember reading [COLOR=rgba(0, 0, 0, 0.87)]Benoit Mandelbrot[/color] book on the length of market memory (trend and s/r level) and it was approximately 200 days from his studies. Do you use any other terms (other than medium to longer term) than those mentioned above more so to bridge the medium to longer term period ? Or is basically rely on the fib replacements and established S/R lines ? Also how is the psychology of crowds of bots going ? I think that line of investigation can yield some very interesting information

Get ready to load the shorts... its -220 on DOW already on weekend charts. China is not going to go away anytime soon. correction expected now...

Do not believe the doomsday predictions, there is a small correction in progress,, however we are in the midst of the biggest blowoff rally the Dow has ever seen in its history.

And there are no diamonds in the sky, at least not yet

The roaring 20s are here

true... there is no diamond on the charts as of today yet... it's only a projection at the moment and it just may or may not become one in the future... however, the basis for the market to make a sizable correction no shorter than going back to about 18K level is in fact another real diamond that had been built back in 2014-16... that was a continuation pattern which measured objective target has already been reached...in such cases the market always comes back to revisit the levels where the pattern was located in the past...it's a rule regardless of any other incoming fundamental or technical reasons and circumstances...

Hang Seng's MMY and MMM are down... was changed last Friday... this is the first worrisome bearish sign among major stock indices...

Dear Igrok,
Thanks Pro...
How about Dowjones...

same thing... all the US stock indices will gap down on the opening today as it was suggested... though strong confirmation will only come with them making fresh 2020 lows...

Thank y so much...

I don't think the markets will crash anytime soon.

The amount of moneyprinting worldwide is increasing, big investors sit on piles of cash ready to buy any correction.

And the markets can always count on Central Banks to start buying everything, as they already do in some countries.

18K on the DJIA is a must... worse that that is not necessary but quite probable... the global problem is that the financial capital is unable to reproduce itself...

here is the channel on the DJIA chart... it has a wrong sequence of the internal waves... therefore the break on the upside is quite likely to be a false one while the break below the red line is inevitable and has a pretty good chance to sustain...

on the opening the Dow was short just 22 pips of it's Jan low... good idea to buy ahead of that level but I don't think it will sustain much longer...

I think DOW is still bullish. Tomorrow there are some important news ( hopefully good ).
il has a lot of room to the upside while a support is forming at the current level

in case it makes fresh intramonth low then a serious sell-off is imminent...

True. Corona makes it hard to have a safe stop loss. I think the situation is dangerous.