New answers tagged

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I'd like to emphasize the aspect that the initial Corona crash, by which I mean the sharp 25%-40% market drop (where the percentage depends on the market you look at) has happend as fast as no crash before. Therefore, I believe (in agreement with Hart CO) that not enough time has passed since the record highs to be able to judge the situation properly. ...


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The FED is buying, propping up the markets to keep down the panic. All the while the banks are selling into the rallies. Small investors believe they have caught the bottom, and that markets will always go upward long term. Investing for some is no different than going to a casino. They really don't understand the game and roll the dice with each investment/...


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Do these regulations (aka absence of market freedom) add more risk to the investor? Yes. For example, a completely stupid "windfall profits tax" has been suggested here long time ago for old hydropower and old nuclear power. The risk is very real, in this case for investors investing to old hydropower and old nuclear power. assuming that an european ...


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Much of the US in general is still in denial about what is happening. They think: "the markets dove, they recovered a little, and now they are relatively stable and will soon resume their normal gradual climb". And more than any other country, many individual Americans are going to resist being told what to do. Just look at how long it took for people to ...


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Another part of the answer: The market prices are being supported by put options that expire on the middle Friday of each month. Market Makers have to take the opposite side of those trades AND at the same time remain delta neutral. This is called a “put wall”. Market mechanics make it very difficult to climb over put walls unless the vix also continues ...


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The market is always priced right for a large group of people assessing future reward vs future risk, and being motivated to buy or sell from other people, today. Your assessment of future possible reward vs risk may be different. Your need to buy or sell may be different. The market reflects the opinions of a pool of people. Their votes are not equally ...


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As before the crisis, or perhaps even more so, there are simply no risk-free, interest-yielding investments. As always, the stock market is not only driven by the anticipated profits of the companies but also by demand for stock, which is still large because there are few alternatives. Since there is a large degree of biological, social, political and ...


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I'll provide another answer in addition to my first answer. The stock market indices consists of large industrial public companies, not small services sector companies. The hard situation applies mostly to small services sector companies: gyms, restaurants, photography companies, nightclubs, bars, barber shops, etc. These small companies, which are having ...


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The majority of the public seems to be operating on the belief that the COVID-19 is "going away" soon. Why this notion is popular probably has a lot to do with political and media rhetoric in both China and the US. Early on, Trump maintained that the virus was a non-issue, creating an air of complacency with many Americans. Both the media and Trump seem to ...


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Not a complete answer, but three things to add to what has been posted. Nobody knows. The accepted answer suggests confidently that the market is currently correctly priced, but based on history, we should doubt that anyone can predict that. There could be a 30% drop this week, or not. Maybe the alternatives to being in the market are also ...


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Market reactions to information are not always timely, proportional, or rational. We don't know the full impact of our current situation; we're feeling it out. Some people (bulls), believe that the initial dip was an over-reaction, that the government response will prevent further decline, and/or that things will go back to normal pretty quickly, so they ...


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The market reacts only to new information. It is already known that the new coronavirus has resulted in a pandemic. It was known long before the current situation. Having infections in most countries, and knowing the growth is exponential is enough. Not all people understand the power of exponential growth and how quickly its rate increases. Yet, there are ...


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An option can be traded at any time. There are 3 main reasons why an option price will change: Underlying price of LB stock moves Implied volatility increase or decrease Time decay, the non-intrinsic premium of your option will slowly decay over time and go to zero until the time of expiration when essentially the option is worth only its intrinsic value. ...


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You could offer less. You must be prepared to walk away at that point though, as the seller is within their rights to completely withdraw the sale. When I bought my property, the conveyancer advised me not to proceed due to non standard construction. I wanted the house anyway as it was better than other properties i'd looked at. I called the Estate ...


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You are proposing to gazunder. I can't speak for what might be 'best' for you personally, but I don't know of anyone who thinks this is a noble practice. how would it be best to approach this Tell your conveyancer to tell the seller's conveyancer. Both these parties might try and talk you out of it.


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You can make money buying or selling options if the stock cooperates. Timing is everything. Avoid selling options until you really understand options and you are an experienced investor/trader. As for LB, it normally has an implied volatility of about 50%. At that level, you 4/21 $5 put would have a theoretical value of ZERO. Because the market has ...


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The short answer is yes. You can make a profit, on puts or calls, when the options are still out of the money. In order to do so, the difference between what you paid/sold the option for in the first transaction has to be greater than what you can sell/pay for the closing position and commissions need to be considered and possibly tax liability. When ...


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