buy far out of the money puts on SPY

What's the discussion?

>>1128938
>What's the discussion?
see
>Would you throw your bottom dollar selling some put options of an ETF, sell some futures, what?
just wanted to get opinions/ideas.

Id probably short leveraged (maybe x15) eff

>>1129088
ETFs*

>>1129088
what ETFs can leverage 15x? most i've seen for an index fund is 3X

>>1129405
Don't know about the us, but in sweden avanza has a ton of x15 etfs.

Short markets that are bubbles and then buy low

>>1129090
*ETH

just buy the dip in this case lads

>x15 ETF

And this is how you ruin your life. Not even professionals use these ETFs.

>>1129845
The premise is how to maximize returns when you absolutely KNOW FOR CERTAIN the stock market is crashing tomorrow. There is no risk. In such a scenario, I'd put my life savings into the highest leverage inverse ETF I could find.

>>1128926
Long SP Inverse ETF.
Long Calls on Treasuries
Possible Short-Selling on Consumer Discretionary, Oil & Gas stocks
Short Dollar.

>>1129760
This is notoriously hard to predict.

>>1130027
i was thinking buying calls in an inverse ETF, S&P500 or even Russell2000, would be the best way. for simplified math:

1. have $40k
2. buy 100 SPXU call contracts ATM for about $400 each
3. if the index drops 20%
4. SPXL could go from 30 to 50/share
5. that would next you $1,600/contract if you let it close out or
6. $160,000 off that one play

I don't know much about futures - never traded them. but i wondered if anyone did buy index futures before and if that leverage was better.

>>1129414
the SEC has said that they want to cut down on some of the x3's we got out here now. there's some funds that, by principle of their business, like mREITS, take on leverage as part of their operation. but that's another argument.

>>1128926
>selling some put options

Selling puts is a bullish trade. You wouldn't do that if you thought prices would drop. You'd either be buying puts or selling calls.

>>1130284
Index futures are better because there is no time decay, you just short or go long and close out whenever, you just pay your brokerages trade fee on each end.

With options, time decay will always be grinding down the price, and if you wait too long to cash them out, or don't time it right, just one good unexpected rally (in the case of puts) can halve the price of the option. Waiting for the option to close out on its expiry date is dumb, in most cases, you will lose a lot of value. You want to close it out at the bottom of a dramatic move down when the VIX has spiked.

Buying puts on a inverse ETF is only okay if there is enough volume in the ETF options, often many ETF's have thin volume on options so the spreads are quite wide. You really have to time it right because bad timing will really erode your option price.

While futures have no time decay, they do require you to have a lot more cash in your account to trade them (forget how much, it's different for each future based on the underlying index.)

>>1131135
Roll yield is time decay bra

>>1131163
its far less severe than time decay on an option, since a futures contract period is three months, and also most people don't hold futures that long for it to matter. I should have said time decay and volatility kills the options prices, it's been a while since I bought them, forget the specific terms for all the changing components in an options price.

>>1130058
Except it isn't. 2008 dip was obvious as was the recent one in S&P. Whoever bought in the dip, profited massively.

>>1131755
yea, except if you thought it was the same dip as in august, you would have blown thru your "dip money" the 2nd week of Jan and just now recovering. the problem is verifying a bottom.

Keep an eye on Australia. Shit will hit the fan soon enough.

So, admittedly I'm a newbie and I've been trying to lurk enough before posting but I see this shit literally everywhere "buying puts on SPY" can anyone explain this shit and why it would be beneficial or is it just a meme at this point?