Variable Margin Vs. Gross Margin | Small Business - Chron.com

**Trading on Bitfinex – Margin Funding FRR Delta Fixed and Variable**

The Flash Return Rate benefits our customers by keeping the interest rates applied towards their funding offers at the best average value.
FRR Delta
If you choose to lend, you have the option to specify an offset from the FRR, through the Funding Form.
For example, if the FRR is 0.045 and you specify that FRR Δ -0.001, then your calculated rate will be 0.044
With Δ Fixed, once the order is matched, the rate will not be updated against the FRR anymore. It will be applied and kept until the funds are returned.
With Δ Variable, the offset is automatically adjusted against the FRR. This way the best average rate is always calculated along with the offset when matching it against the best average return rate.
submitted by garbisdarie to bitfinex [link] [comments]

Banque de France: 24Mar/Variable Trade Costs, Composition Effects, and the Intensive Margin of Trade

submitted by Central_Bank_Bot to Economics [link] [comments]

Margin Isn't Dangerous & Why I'd Still Use It If I Had Less Than $25,000

Margin Isn't Dangerous & Why I'd Still Use It If I Had Less Than $25,000

Cash vs. Margin


TL;DR- Use Margin if you're trading securities and either above or below 25k. If you know how to size positions, it won't matter if you move $4,000 into a trade or $4,000,000. As long as you sized the position correctly. If you're limited to 3 trades, then take 3 PERFECT trades: https://imgur.com/a/SpPOERQ

I see lots of people discussing contrasting ideas although they attempt to justify using both. Here are some things I see said and written frequently from people that doesn't add up for me:

  • "Use a cash account to avoid PDT" - (Totally fine, in some cases such as certain options traders. Not if you're trading securities.)
  • "Risk 1% of your account" - (So if your account is at $25,500, I risk ~$255 and if I lose 2R I'm below PDT. Doesn't sound too great to me if I were to lose the first 2 straight trades.)
  • "Margin is a double-edged sword" - (It's only dangerous if you don't set hard stops or size your positions correctly.)
  • "Never take on a trade that is worth more than your account" - (I can agree if you were swing trading but in terms of IntraDay trading, this is hindering your ability to grow your account. If you're risking $100 on a trade that costs less than your account value.. then $25 on a trade because of your account value.. then you're adding unneeded variables. Remember: "Consistency.")


The Predictive Model I built lays out all valid trades within the report range as well as \"Perfect Trades\" that I consider \"Textbook\". The report range is between a 30 day range. Between 4-17-20 to 5-17-20. Total \"Perfect Trade\" count is 9 trades. Even if I were limited to 3 trades per week. I'd be able to trade them with less than 25k on margin. The stats reflect $100 risk I've set on a different tab. (The \"W\" is just a graphic I made for \"Winning\")

It doesn’t matter if you move $4,000, $40,000, or $4,000,000 into a position. As long as you’re risking the same. Your Trading Account's performance is based off of risk. Such as:
•Sharpe ratio
•RRR
•Number of R’s in 1 week/month/quarter. (Example: I made 7R this week. If my R is $100. I made $700)

If I were to go back to when I was below $25,000 some years ago. I'd still use a margin account while being limited to 3 trades per week. Here's why:

Formulas you have to know:
Position size formula = Risk ÷ Stop Size
Stop Size Formula = Entry - StopLoss

Example 1a:

Stock ABC,
Entry = $10.00
StopLoss = $9.90
StopSize = 10¢
Risk = $100
In Live Trading: $100 ÷ $0.10 = 1000 Shares
1,000 shares at $10.00 = $10,000 position

Example 1b:

Stock XYZ,
Entry = $385
StopLoss = $383.00
StopSize = $2.00
Risk = $100
In Live Trading: $100 ÷ $2.00 = 50 Shares
50 shares at $385 = $19,250 position.

*$10,000 CASH account: CANNOT trade Stock XYZ and must wait 3 days for his entire account to settle after trading Stock ABC. If it was a margin account, they'd still be able to take 2 more trades this week.
*$10,000 MARGIN account: CAN trade Stock XYZ and can trade both scenarios while still able to trade 1 more time in a 5 day rolling period.

Then the next point made is, "Just won't trade anything above $20".


Ok. great rebuttal, but why?

Let's remember this: StopSizes aren't always directly correlated to the price of a stock. YES you're more likely to have a wider StopSize on a higher priced stock and a tighter StopSize on a lower priced stock. But remember this: of slippage on 1,000 shares is 10% of his risk ($10)... It will be even more slippage if his stop loss market order is hit. Even a Sell-StopLimit order will have slippage within the amount you allow for when you enter a position.
Stock XYZ would have to be slipped 20¢ just to equate the amount of slippage on Stock ABC.Highly liquid and available stocks such as AAPL, AMD, NVDA etc don't have 20¢ spreads. Not even 10¢. Rarely 5¢. Most of the time. Just a couple cents. Of course there could be more right out of the open but the spread in my years of experience is tightened within 2 minutes of the open.
Yes, these small amounts in pennies do hold lots of merit if you're looking at having any longevity in this business, it WILL add up over the years.

Both trades have the same risk [in perfect world theory].

If both stop market orders were hit (StopLoss). Both traders would exit with a $100 loss on each. Although 1 trade required $10,000 in capital and the other trade required $19,250 in capital.
Use margin. If I had to go back to when I had less than $25,000 in my account, I'd still do it the same way I did it with margin. I highly suggest using margin even if you’re limited to 3 trades per week. I get asked all the time when I began trading. If you watched my last video, I showed my first ever deposit with Scottrade (Old brokerage that was bought out by TDA a few years ago) in 2015 although I don't consider that's when I started trading because I didn't treat it the way I do today.
I really consider myself starting as a trader in 2017 when I:
•Wrote a business plan
•Understood statistics
•How to research.
All this being said, slowly over time I noticed that I am taking less and less trades and increasing my risk size. Why?
EV: Expected Value.


- Margin has zero negative effect if you're sizing your positions the same every time. Margin allows you to take on more expensive positions that are showing your edge.

Bonus: Being limited to 3 trades a week isn't fun, I remember that feeling from years ago. Just remember to take 3 perfect trades a week. Sometimes "Perfect Trades" don't work out in your favor while some subpar situations hit target. Some weeks you might take your 3 "Perfect Trades" by Tuesday. Some weeks you might take only 1 "perfect trade". If you follow my watchlists on Twitter (Same handle as my Reddit), I keep my Day Trading Buying Power transparent. Not always is it growing perfectly linear. And not always am I posting every single day because sometimes, my edge isn't there. Just because the market is open doesn't mean you HAVE to trade.
My watchlists aren't littered with 15+ tickers. Rarely do they have more than 7. That may work for other traders, but for me, I demand quality. It's either there or it isn't. No reason to force a trade. I'd rather focus heavily on a few tickers rather than spread myself thin across multiple.
Trading isn't supposed to be exhilarating or an adrenaline rush. It can be boring. I said that in the post I wrote back in April.
Also if you make money, even if its just $20 in a month. Take that money out and buy something. Shrine it. Cherish it. You ripped that money out of WallStreet. Be proud of it. It takes a lot of courage to do this business. Realize that the P/L is real money. Sometimes even just buying a tank of gas or a book will help you realize that. Spend it from time to time. Get something out of your trading account. You may or not be trading for long, get something that is tangible to always remember the experience in case you don't last. Make it your trophy.

That's all I've got for right now. Maybe I'll make another post or 2 before the year ends. I hit my 1 year full-time mark in September.
Best wishes!
-CJT2013
submitted by CJT2013 to Daytrading [link] [comments]

The importance of crosshair placement, why you're doing it wrong, and how to fix it.

The importance of crosshair placement, why you're doing it wrong, and how to fix it.

Valorant and the importance of crosshair placement.



Introduction

Hey guys, I'm Twix, and I'm back with another informative post, this time concerning the aspect of crosshair placement. Through this post I will be discussing the importance of crosshair placement within the tac shooter genre, going over the most common mistakes I see people make in my experience as a coach, and offering structured routines to remedy the majority of these mistakes. If you haven't read through any of my posts before ( I wouldn't they're too long ) I am an FPS player which mainly played CS:GO competitively, with around 7k hours and multiple level 10 faceit accounts and LAN wins in the past 5 years, who transitioned towards the end of my CS:GO days into being an FPS coach, I mainly worked with people trying to gain a competitive edge in CS, but later moved to coaching Apex players, and following the closed beta release of Valorant, I have been coaching Valorant players for the past few months, with unanimously positive feedback. If you haven't read my first post which is a comprehensive general guide for players looking to improve in Valorant, I highly recommend you look at it here before continuing on to this post. In relation to other qualifications / achievements, I have hit top 30 as hitscan DPS in Overwatch, maintained top 500 ranking in Apex ( PC ) for a couple of seasons, and hold numerous 1% rankings on various Kovaak's FPS Aim Trainer maps. My main goal in creating these posts is to contribute to the Valorant community by sharing my knowledge gained over 10k collective hours of FPS experience ( mainly Tactical fps ) and hopefully help the people reading my posts improve and gain that competitive edge they need to progress into their desired ranking. For those of you interested in learning more about my coaching service, or looking for a community of Valorant players looking to improve, I will link my Discord server at the end of this post.

Why is crosshair placement important?


If I was asked about the importance of consistent crosshair placement in games such as PUBG, Apex, Overwatch, Fortnite, etc. I would probably answer by saying that while it's beneficial to maintain solid crosshair placement, it's by no means the most important aspect in relation to performing well in those games, in tactical shooters however, it's a whole different story. Tactical shooters are low TTK ( time to kill ) games, and for the most part, a single bullet to the head is enough to eliminate a player, this means that in contrast to AFPS games, or games like Overwatch or Apex, which have a much higher TTK, first shot accuracy is of extreme importance in Valorant, inevitably leading to the fact that crosshair placement is also extremely important. In a game with higher TTK, even if your first shot accuracy isn't perfect in an aim duel, you can win the fight if you land more shots on the opposing player over x amount of time that you trade with them, while in Valorant, whoever needs to make the least amount of adjustment to their crosshair when engaging in a 1v1 scenario wins the exchange. It doesn't matter if your raw aim is out of this world, even if you have the most precise flicks known to the FPS community, if your crosshair placement is sub-optimal, you will lose vs. someone with consistent crosshair placement, this is simply due to the fact that all they need to do, is click once your head moves into their crosshair, often without even needing to move their mouse. Crosshair placement may very well be the most important aspect in relation to gunplay and generally the mechanical aspect of tac shooters such as CS:GO or Valorant, as it's the deciding factor in the majority of aim duels.

Common mistakes


A large amount of players tend to underestimate the importance of crosshair placement in Valorant, and especially the underlying complexity of maintaining consistency in that context. People think that all you need to do to maintain solid crosshair placement is aim high enough to hit headshots, meaning that the only factor that affects crosshair placement is vertical positioning, others still stick to making their main source of information on game improvement being players who make statements as un-informative and vague as "just click heads", my main goal is to break down and explain the multiple factors that go into proper crosshair placement. Lets start with the basics:

Vertical Positioning:
As mentioned above, one of the elements which ties into crosshair placement is vertical positioning. this is the set distance that you need to position your crosshair at in relation to the ground to be able to align your crosshair's horizontal axis with player model head-level. The good thing about vertical positioning, is that you can get accustomed to the head level that the player models have in Valorant quite rapidly, as the hitbox sizes in this game are identical, meaning you can always use the ground as a point of reference to determine where the enemy player's head would be.
In Valorant, the head level always remains a set distance from the ground
In order to train your general ability to place your crosshair at the correct height, try to make a habit out of constantly reminding yourself to place your crosshair at head level, regardless of where you are or what you're doing on the map. What I mean by this, is that even if there isn't any imminent threat of enemy players peeking you, try to keep constantly keep your crosshair at head level, the more time you spend doing this, the faster it will become a habit and become something you do subconsciously, without having to actively focus on the action. This habit allows you to build muscle-memory during otherwise useless down-time, another way to do this is to track your teammate's heads with your crosshair while rotating, leaving spawn etc.
While vertical positioning is something that people get used to relatively easily, I have come across a recurring issue among the VODs of people I coach, and that is that people generally struggle with adapting the vertical component of their crosshair's position to varying points of elevation. Here's an image to help you visualize a scenario where this could be an issue:
Peeking C Long, Positions marked: Cubby ( right ), Platform ( left ), back-site ( back )
In the image above I am peeking into C back-site from C long on the map 'Haven', I have highlighted three different positions / angles where an enemy could potentially peak from in an in-game reenactment of this scenario, Platform, Cubby, and back-site. What you'll notice is that these positions all have different points of elevation, meaning that while using the ground as reference will allow me to maintain my crosshair at head-level if someone peeks my position from ground level on C site, in order to clear cubby and platform, I would need to adjust my crosshair accordingly, using their lower levels as a reference for where the head-level position would be in those angles.
Unfortunately, if you are struggling with this due to the fact that you aren't familiar with the map layout yet, the only thing that will remedy your situation is more time spent playing the game, if however, your issue stems from a mechanical inability, meaning that your mouse control isn't good enough to allow you to make such adjustments comfortably, the routine provided later in the guide may help you get past that issue.

Horizontal Positioning:
Just as with vertical positioning, horizontal positioning is pretty self-explanatory in terms of it's function. Knowing at what height to position your crosshair at in relation to the environment is far easier to do than knowing where to position it on a horizontal axis, the reasoning behind this is that with vertical placement you will always have the ground or lower level of the object the opponent is standing on as a point of reference which allows you to instantly know at what height head-level is. When focusing on the horizontal aspect of crosshair placement, there isn't a set point of reference at all times; Sometimes you need to hold wide angles, sometimes you need to move along with the object you're playing against, and sometimes you need to pre-aim to swing effectively, all this variability makes it much harder for a newer player to grasp crosshair placement and horizontal positioning is just as crucial as vertical positioning if not even more important.
A very common mistake which I see a lot of in the VODs I review as a coach, is newer players holding angles too tightly, meaning that they're playing in a position where they anticipate an enemy push and are waiting for the engagement, and their crosshair is a position where it's hugging the edge of the wall the enemy will peek from. Here is a visual representation of what I'm talking about:

Example of incorrect horizontal placement
In the image above, I'm holding an angle where if someone crosses moving parallel to the wall I'm looking at, I'll have under 50 ms to react, my crosshair is so close to the edge of the wall that I will need to click my LMB the milli-second I see the enemy. By holding this angle, chances are that by the time I click the enemy will have already crossed to the left of my crosshair resulting in a miss and most likely my death; It would take inhuman reaction times for anyone to hit a player while holding like this, especially if the enemy player is swinging. Instead, you should allow some distance from your crosshair to the edge of the angle you're holding, allowing yourself to spot the enemy's player model, and then time your click effectively. Here is a visual representation of correct crosshair placement while holding the same angle:

Example of correct horizontal placement
As you can see, in the image above I am allowing for some space between the wall and my crosshair, giving me a significantly longer time window to spot an enemy player and react. Holding an angle that's too "tight" would mean I need to make a larger adjustment to hit the enemy, and therefore I increase my margin of error due to vertical overshoot ( see below ). There are exceptions to the rule when it comes to the distance you need to hold at, if the angle you are holding only allows forward movement ( into your crosshair ) you can hold a narrow line of sight. If you are clearing an angle ( moving along it to check for enemies ) and you are the agressor, you can hold tight and move along with the wall / LOS to allow for a faster reaction if you spot an enemy during your movement. If you are the agressor and you want to swing into an angle that you believe / know an enemy is holding, it is sometimes optimal to pre-aim, meaning you position your crosshair in a way where without moving your mouse it will be aimed at the enemy's head once you swing out the angle.

Vertical Offset:
The final common issue I would like to bring up which ties into both crosshair placement and horizontal click-timing, is something I call "vertical offset" or "vertical overshoot", this is a player's inability to move his crosshair horizontally while maintaining the same vertical placement. Vertical offset is a big issue when it comes to switching angles or flicking horizontally, I have seen many scenarios where a player is holding an angle properly with their crosshair at a pixel-perfect vertical position in relation to head level, only to make a 30 degree turn to check a different angle and end up shooting at an enemy's chest and losing the duel. Usually, the larger the movement, the more the player's crosshair deviates vertically. Here is a depiction of what vertical offset / overshooting looks like in-game:

Example of margin of error caused by vertical offset / overshooting
In the image above the green dot is where the crosshair should end up in an ideal scenario while flicking from it's current position to the target dummy, while the green lines represent a theoretical margin of error for overshooting. Fortunately for people that face this issue, I have come up with multiple Kovaak's maps and firing range excercises to help combat it and largely reduce your margin of error when moving your crosshair / flicking horizontally.

Settings: What sensitivity / crosshair should I use?


This part of the post discusses a topic which is highly subjective, both the sensitivity you use and the crosshair you use are something preference-based that you should decide upon on your own, the reason I'm adding this section into the post is for players which are newer to the tac-shooter genre; There are a few guidelines that will help them narrow down the settings that work the best for them.
First off, don't by any means copy your favorite pro's config, just because something works for a professional player that has probably spent well above 10,000 hours playing FPS games and decided upon their ideal sensitivity and crosshair within that massive period of time, doesn't mean that it's going to work for you, use whatever you're most comfortable with. Other than individual preference, and having gotten used to their sensitivity, the Pros you watch may be using gear which feels different at their sensitivity setting. A lighter mouse, faster mouse-pad, and faster feet can feel very different in terms of mouse movement, even if you're playing on the same sensitivity value on paper. In relation to grip-styles and what mice are ideal for each hand size, make sure to check out my first post in this sub before moving forward with this guide, as playing on hardware that caters to your individual preferences plays an important role in increasing your mechanical potential.

Sensitivity:
As I stated in the paragraph above, sensitivity is something quite subjective and while there's no general rule as to which single sens value is superior, Valorant and CS:GO professionals tend to stick to e-dpi or cm/360 much lower than professional players in other titles and FPS subgenres. Your e-dpi is your in-game sensitivity value multiplied by your mouse's DPI setting. The average e-dpi used by Valorant professionals is around 250 e-dpi, which would be a value of 0.625 in-game @ 400 DPI, or around 50 cm/360.

Pro player & Streamer sensitivity settings (e-dpi)
cm/360 is a universal format for sensitivity measurement, it's the amount of centimeters you need to move your mouse in order to perform a full rotation. This is the format adopted within aimer communities due to the simple fact that you asking someone "what sensitivity do you play on?" And them responding with "1.5 in CSGO" is pretty useless information as they could be playing at any DPI range, and you don't necessarily know what each CSGO sens corresponds to in relation to physical movement, or even movement in other games. "e-dpi" solves the issue of different DPI x Sens measurements within the same game, but the cm/360 format is easily transferable from title to title.
The reason professional players in the tac shooter genre use lower sens on average, is due to the fact that in contrast with other FPS games, tac shooters don't require larger or extended movements, instead they require you to hold or clear angles while maintaining stable crosshair placement, the least adjustments you need to make to your crosshair's position on your screen, the better your "aim" will be. The majority of players I have coached report that it has been significantly easier for them to maintain consistent crosshair placement at lower sensitivities. For newer players that still haven't found a "main" sensitivity that they feel comfortable on, I would recommend for them to stick to the range of 200-300 e-dpi, while for more experienced players coming from CS or other similar games, I would recommend a similar range with a higher cap, at 200-400 e-dpi ( very few professional players play above 300 e-dpi ).

Crosshair settings:
This is something even more subjective and preference-based than sensitivity even, so what I will do in this section is simply post my own settings which I use for my in-game crosshair, and explain why I picked each value within the menu.

Crosshair Settings
So, lets break my crosshair down setting by settings:
  • Color: I use "Cyan" as it stands out quite well for me with my current color settings, any color that doesn't match your enemy outline color works perfectly fine here.
  • Inner Line Opacity: This setting basically determines how see through your crosshair will be, I like setting mine at "1" as It makes the crosshair stand out more.
  • Inner Line Thickness: I set this to "1" which is the lowest value, a lot of professional players like to use "2", I think setting the value to "1" makes it easier to align your crosshair with heads or with other objects in the environment, it is also less obstructive, so I highly recommend either this or "2" to newer players
  • Inner Line Offset: This setting determines how large the gap is in your crosshair, I like setting this to "1" as the gap is as small as possible without disappearing, larger gaps make it more difficult to determine where the exact center of your screen is, which can act as a hnderance in your first shot accuracy at longer range engagements.
  • Movement & Firing Error: These settings just turn your crosshair into a dynamic crosshair and make the gap widen significantly while moving or shooting respectively in order to give you a visual representation of how the innacuracy factor works. Useless and distracting, would highly suggest that you keep these both off unless you're very new and still don't understand how movement / spray accuracy works.
  • Outer Lines: Everything is off here, I don't think playing with outer lines provides any benefit whatsoever and it's an extra distraction.

Crosshair Placement Improvement Routine:

A large portion of improving your crosshair placement is based on simply playing the game more, crosshair placement is largely based on muscle memory, part of having good crosshair placement is simply based on having experience in-game allowing it to become a subconscious habit, and the rest is based on your ability to anticipate player model movement and learn to make horizontal movements without simultaneously your crosshair vertically. The routine I will provide is not only a great way to work on your crosshair placement, but also highly beneficial to the click-timing aspect of your aim, which is basically the only element of aiming required in Valorant, as good tracking is unecessary in such a low TTK game. If you are already training using a daily routine on Kovaak's ( as you should be ) you can just implement this into your daily scenarios.

Kovaaks:
( These are all maps which require you to make horizontal movements without overshooting vertically, thus good aim training for those struggling with crosshair placement, see my other posts for a larger variety of Kovaaks maps )

  • 1 wall 2 targets horizontal - 10 minutes ( focus on your flicks, work on hitting both targets in the same movement, not pausing in between )
  • Valorant Small flicks - 10 minutes ( Great routine as head level is that of Valorant, and vertical deviation will cause you to miss, forcing you to maintain head level as you play through it )
  • PatTarget Switch small - 10 minutes ( Works on your ability to swap from one target to another while maintaining head level crosshair placement, keep LMB held while playing, only go for heads )

HSDM:

  • Valorant doesn't currently offer it's own deathmatch servers, therefore the next best thing is practicing in CS:GO. HSDM is a headshot only modifier for community FFA servers in CS:GO. To access these maps go to "Community Server Browser" and simply type in "HSDM", any server with decent population will do ( preferably 128 tick ). Playing FFA on headshot only forces you to maintain head-level crosshair placement as body shots don't count. I advise going for taps rather than spraying, as it limits the RNG, also spraying in CS:GO isn't transferable to Valorant as a mechanic. Make it a challenge for yourself to maintain positive K/D while playing. Use the AK in rifle servers, and the USP-S in pistol servers.

Firing Range:

  • Set the target dummy position to static, and practice your click timing by only going for the targets furthest to the left and furthest to the right interchangeably, do this for around 10 minutes.
  • Play Spike Rush and set it to hard. When set on "Hard" the AI will one shot you as soon as you peek if it has seen you, and one shot you after around half a second if you shift-peek it. Pretty decent warmup in relation to crosshair placement as you will die every single time if you aren't instantly headshotting the targets the moment you peek. Play this for another 10 minutes.

Link to my Discord server for further questions / coaching inquiries:

---------- https://discord.gg/6ZYVZ6x

New twitter : https://mobile.twitter.com/Twix_v2
submitted by Hi_Im_TwiX to VALORANT [link] [comments]

Yield farming thread

What is yield farming? Most broadly, it means getting some benefit for providing capital, usually in the form of tokens. Currently, there are three major different schemes:
  1. Staked funds aren't utilized in any way and tokens are distributed proportionally to what's staked (may be dai, weth, ycrv, or other tokens). Token price risk: zero. Token accrues, but even if it falls to zero you lose nothing. Smart contract/protocol risk: depends on the staking contract, usually low to zero. Contracts are usually simple modification of the first contract used by yearn (taken from synthetix), making analysis easy by only looking for differences. APR: may start high, but usually collapses fast to relatively low values as funds pour in.
  2. Providing liquidity in trading pools. Tokens are gained in return for providing liquidity for requested tokens on uniswap, balancer, curve, mooniswap. Token price risk: medium to high, depends on pool weights. See these two articles for details on how liquidity providing works: Uniswap - pool weight is always 50%/50% Balancer - arbitrary pool weights, down to 2% for one token. Can be multitoken, not just two. Smart contract security risk: medium to high. In addition to checking the (usually simple) staking contract, requires security analysis of the token contract. If it's possible to mint a very large amount of token, or someone has a hidden enormous stash, the attacker could clean the pool by dumping them at once. I'm aware of one scam called "YYFI" that did this - you can see the attacker successively getting DAI from the balancer pool. Fortunately for the victims, he wasn't very competent and did everything manually, giving time for people to withdraw. A more competent attacker would automate the pool cleaning process in a smart contract. APR: usually very high - upper three digits or four. It's rarely realized APR because it's calculated assuming that token price stays constant. If you think the token being distributed is undervalued definitely the best option to farm.
  3. Depositing and borrowing funds for defi. Currently utilized by compound and cream (a compound clone). Users get rewarded with tokens for lending and borrowing tokens. Token price risk: zero. Security risk: the most complex to analyze option of all, although Compound itself is definitely the safest defi dapp on ethereum.
Warning: gas fees are high. $10k is probably the minimum amount that makes sense for active manual farming, which still only makes sense for a more long-term farms like COMP or CRV, at the cost of not maximizing APR. I have spent over $3k in gas during the last two months by farming very actively. Below $100k, or if you don't want to spend a lot of time on this, it's probably best to deposit your funds into one of yearn vaults that yield farms for users. https://yearn.finance/vaults
A partial list of current yield farms (feel free to comment with more farms! I can edit and add them to this list):
  • COMP farming, the oldest one (I think?). Relatively low returns (58% on DAI), safe, no price risk. Efficient way to farm is to supply and borrow the same asset (can be done via instadapp) up to maximum leverage possible (with some margin for interest payments).
  • BAL farming, provide liquidity to BAL pools. Safe smart contracts (just don't deposit deflationary tokens). Price risk and APR depends on the pair. https://balancer.exchange/
    See returns for both balancer and compound at https://www.predictions.exchange/
  • YFV finance, one of the many clones of YFI. The seed pool is safe IF you withdraw before the staking period ends (see the security part). Current APR on stablecoins: 121%
  • CRV farming, providing liquidity to curve pools. Mostly safe - curve smart contracts tself are safe, but keep in mind if one of tokens in the pool collapses (renBTC is probably the riskiest) other tokens are going to get drained. You can see the current APR on https://dao.curve.fi/mintegauges. As of now, the highest APR is for compound pool - 105.27%. It's varying and there's complicated game with CRV voting that impacts it.
  • CREAM farming. CREAM is a clone of compound. It's definitely less safe than Compound. Initially, it launched with a direct control by one normal address, but recently they moved to a 5-of-9 multisig.
  • YFII, another YFI clone. Current APR 95%. https://yfii.finance/#/staking
  • Mstable, liquidity providing with stablecoins. APR about 50% (MTA + BAL). https://defirate.com/mta-yield-farming/
  • Zombie, meme token. Current APR is abysmal (33.5%) but token may unexpectedly pump, increasing it. There's a smart contract bug that, as long as rewardDistribution and owner aren't set to zero, potentially allows rewardDistribution to lock all staked funds (not steal). Makes zero sense as of today.
Analyzing security.
Yield farms come and go. The key to earning high returns is to be agile and to jump fast into new farms, which requires manual analysis of security. Of course it's possible to yolo in without any analysis, but I don't recommend it. I'm going to show an example on two recent farming contracts (of the first type - funds just sit in contracts).
Original yearn staking contract. GRAP staking contract. Let's load two codes into a text diff tool, like this site. What interests us on the code level are changes relating to the withdrawal capability, which in the original code are limited to the withdraw() function. We can see that the only substantial change is the addition of the checkStart modifier which prevents both deposits and withdrawals if it's too early. As startime is set directly in source code and can't be modified anywhere, that change is safe - if it doesn't throw on deposit it's not going to throw on withdraw.
The next step is switch to the 'read contract' tab on etherscan and look at two variables: owner and rewardDistribution. In Grap's case, they lead to a timelock contract that requires all changes to wait for at least 24.5 hours - which makes any fund lockup extremely unlikely. At worst, we only have to look at the rewardDistribution contract once a day to see if there's any pending change.
GRAP farming is now finished with no security incidents.
Second example: YFV. This one is still active. Contract link. After comparing them we can see that changes are much more extensive. The withdrawal function also has the checkStart modifier, but that part is fine (ctrl-f to check if starttime can be modified somewhere else - it can't). What's the problem is the checkNextEpoch modifier. There's a lot of things there and three external contract calls (mint calls). If anything in there throws, withdrawal would become impossible. Dangerous. However, that only happens after the staking period ends, so withdrawing before block.timestamp >= periodFinish is relatively safe.
Another check is to look at the owner and rewardDistribution variables. Owner is set to zero, but where's rewardDistribution? Unfortunately, contrary to GRAP, it's private. It's possible to read it with the getStorageAt web3 api (although finding the index is more work - it's 3). However, the team has provided a link to the transaction in which they set rewardDistribution to 0 so it's fine.
In conclusion, as long as you don't hold the funds after the locking period ended there's no security risk here. The current period ends on Tue Sep 1 14:02:29 2020, UTC.
submitted by nootropicat to ethtrader [link] [comments]

Results for a strategy I've been working on.

Hello,
I've been a long time lurker, but figured I would share what I've been up to for the last few months.
I've been working on a few different strategies (mainly mean reversion/momentum) with different variables/indicators using tick data. After many many many hours of tweaking, I optimized it further by isolating certain days of week / times of day (down to 30 minute windows) that performed the best on average, and it's now only trading those 'successful' windows.
I've been running the below strategy (lets call it strategy A) live for the past 1.5 months and so far results match the backtest. Strategy A works extremely well with high volatility, which is why I'm trying to milk it while I can. :)
It trades in very tight time intervals (average time in market = 13 mins), but is extremely selective about when it takes a trade, so that usually means a few trades per week. This is running on NinjaTrader (I coded it in ninjascript) and is trading 1 ES futures contract at a time. I built in a saftey-net where it halts trading for the day if the unrealized P&L drops below a certain amount, but so far it hasn't hit it.
I'm working on another strategy that performs much better in various market conditions and is backtesting successfully going back 3+ years, but is even more selective about when it executes trades. Because of this, the trades are even more sparse, but with an increased contract count, it performs quite well.
EDIT: There's been some confusion about how much capital I'm using. My broker only requires $1k of margin for every ES contract. Since I started live trading (end of june), I've been using $1.5K USD total and I've only been trading 1 ES contract/order. I've added another chart below outlining what the results would look like if you were to trade 30 ES contracts per order instead of 1 (this would require 30K USD + more for buffer in case of drawdown, so 40-50K to be safe). The liquidity pool for ES futures is very deep, so in theory, you could run this strategy at 100+ contracts/order.
Results:

Daily P&L
Cumulative Net Profit
Strategy Stats
Net Profit/month with 30 contracts/order

submitted by cyclical_trend to algotrading [link] [comments]

Conservative Margin Lending - A tool to use, and a reason to invest outside of Super

Conservative Margin Lending - A tool to use, and a reason to invest outside of Super
Hi AusFinance, i thought i would write on a topic i'm rather passionate about, and hopefully offer some 'food for thought' and an alternative to the standard answers of 'Super is the best environment for your money'.
Disclaimers:
  1. this is not financial advice, i am merely trying to offer some food for thought
  2. these examples are greatly simplified, they do not take into account interest rate risk, legislation risk (both on super, on changes to tax, etc..).
  3. The case study below does not take into account the ability to margin lend inside super. the ability is there, such as Bell Potter's Equity Lever platform, but this is not available to your average retail/industry super, hence it is excluded.
Margin lending for the uninitiated:
For those of you unaware, margin loans are borrowing to invest. Your shares/fund units act as security that let you borrow money to buy more shares/fund units. These are given different levels of "Loan to Value Ratio" aka LVR.
a 75% LVR means you can make up a total investment with a minimum of 25% your money, and a maximum of 75% borrowed money. So with $2,500 you'd be able to borrow up to $7,500 (Making up a total portfolio of $10,000).

Why borrow to invest?
Simply put, Margin lending amplifies your gains and your losses. I have included a table below to demonstrate what a margin loan will do to a $25,000 investment at an 8% p.a. return at different LVRs. I am using Leveraged Equities variable 4.24% interest rate on their direct investment loan as the interest cost - the product offers access to the vast majority of funds and shares that an investor needs, it's just lacking advanced features like options trading (who cares!)

https://preview.redd.it/42p6co191lb51.png?width=786&format=png&auto=webp&s=764b15d0695792766367cc05b5adae78f3af840a
Here we can see the return improve from the standard 8% all the way to 11.8% if using 50% LVR. But in my opinion, 50% LVR is too risky for many investors appetite here, even if it is my ideal point. Instead, i would direct your attention to 35% LVR.
Why 35% LVR?
a 35% LVR comes with a number of benefits to an investor doing standard VAS/VGS/VDHG style etf investing.
  1. Increased returns - as we can see it takes an 8% return and increases it to a 10.1% return
  2. Returns slightly understated - The return is not factoring the effect that the interest will have on your tax return - it is tax deductible.
  3. Low chance of a margin call.
Let's talk about #3. Margin calls are without a doubt the scariest part of margin lending, and i don't blame you for being afraid of them. Many people who leverage too aggressively and fly too close to the sun get hit with a nasty cycle where:
  1. Their investment falls into margin call territory because it has dropped
  2. They are forced to sell their assets at the worst points in the market to get out of the margin call
  3. they miss out on the recovery because their excess cash was used covering margin calls on the way down.
But this is where a 35% LVR is so appealing. the calculation to figure out where your margin call will happen is:
1-(Loan/(Lending Value + Buffer)).
So if we take a standard favourite of Ausfinance such as VAS, VDHG etc, we can see that they have a LVR of 75%. Industry standard buffer is 10%. so let's figure out a margin call on a $25,000 investment, with $14,000 borrowed funds (35% LVR):
1-($14,000/(($39,000*0.75)+($39,000*0.10))) = 58%
it would take a 58% drop in the portfolio to bring it to a margin call. This is the portfolio dropping from $39,000 to $16,470.
This requires a staggering drop before you experience a margin call, and if you are concerned reducing your LVR to only 25% will still improve your return and increase your chance of never being margin called.
You have time to add to your holdings with equity only (buying a dip + decreasing your overall LVR). the important thing is you can manage your risk and it requires truly a cataclysmic level of decline before you experience a margin call ,and at that point that may not be your biggest concern.

Why all the fuss? What's the point of risking being margin called?
It's all in that % return. in the following example i will use ASIC's compound calculator, along with the following parameters:
$25,000 initial deposit (your capital), $0 regular deposits, annual compounding, and a 30 year time horizon. The only assumption is that as the portfolio grows in capital value, the 35% LVR is maintained.
Case 1 - 0 LVR (AKA [email protected]%) - after 30 years of compounding at 8% you end up on $251,566
Case 2 - 35% LVR (AKA compounding at 10.1%) - after 30 years of compounding at 10.1% you end up on $448,291
Verdict - Case 2 ends up being $196,725 better. a 78% superior return
Every % matters so much in a long term strategy, it is truly impossible to overstate how important it is to long term outcomes.

Case Study: Super Showdown
As a final demonstration of the power of a low leverage strategy we will put two different cases head to head. Let us assume that a 30 year old intends to retire at age 65, and has the option of either having $50,000 in super, or invested at a 35% LVR.
After retirement, they will either 1. Take the money tax free in pension phase or 2. pay capital gains tax by cashing out their own 'pension' each year, with their marginal tax rate being 30% (using the currently legislated but not implemented rates). Case 2 will overstate their tax slightly, as i will not scale it, i will just hit the whole thing at 30%.

https://preview.redd.it/86c7xcrc7lb51.png?width=530&format=png&auto=webp&s=045a1774106ac8d8ac848decb04bec9a142bdc52
We can see that with the CGT discount, paying 15% tax is actually better than paying a 0% tax rate due to the higher return. It's an out-performance of $508,681
But okay, i hear you, CGT discount may be gotten rid of, let's recalculate it with no discount:

https://preview.redd.it/yafmmg6p7lb51.png?width=530&format=png&auto=webp&s=d9ae4b0db5de48808ca202f7c6e40d599c34c065
Even without a CGT discount (and 30% flat is more tax than you'd pay on a CGT discounted method on the highest marginal rate currently) there has been an out-performance of $306,102

What do i hope you take away from this?
Even if you decide that the risk of margin lending is too much for you, or that i'm absolutely insane to choose an outside of super strategy that relies on borrowing to invest, i hope that i have given you something to think about.
the one thing i hope everyone takes away from this just as a general point is the sheer power of small changes in your long term return %.
I really strongly believe in conservatively leveraging safe and boring investments to boost that all critical return over the long term to create outstanding long term results.
minor edit: fixed up some grammar
submitted by Savings-Flounder to AusFinance [link] [comments]

How to not get ruined with options - Part 2 of 4

Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM
Post 2: Basics: Buying and Selling, the Greeks
Post 3a: Simple Strategies
Post 3b: Advanced Strategies
Post 4a: Example of trades (short puts, covered calls, and verticals)
Post 4b: Example of trades (calendars and hedges)
---
This is a follow up of the first post.
The basics: Volatility and Time
Now that you understand the basics of intrinsic and extrinsic values and how together gives a price to the premium, it is important to understand how the extrinsic value is actually calculated. The intrinsic value is easy:
The intrinsic value of a call = share price - strike (if positive, $0 otherwise)
The intrinsic value of a put = strike - share price (if positive, $0 otherwise)
The extrinsic value is mostly based on two variables: volatility of the share price and time.
Given the historic volatility, and the predicted volatility, how far can the share price go by the expiration date? The longer the date, and the higher the share volatility, the higher the chance of the share to change significantly.
A share that jumped from $25 to $50 in the past few weeks (hello NKLA!) will have much higher volatility than a share that stayed at $50 for several months in a row. Similarly, an option expiring in two months will have a higher extrinsic value than an option expiring in one month, just because the share has more chances to move more in two months than a single month.
The extrinsic value is calculated as a combination of both the expiration date (how many days to expiration, hours even when you are close to expiration), and the implied volatility of the share.
Each strike, call or put, will have their own implied volatility. It is quite noticeable when you look at all the strikes for the same expiration. Sometimes, you can even arbitrage this between strikes and expiration dates.
The basics: Buying and Selling contracts
Until now, we have only talked about buying call and put contracts. You pay a premium to get a contract that allows you to buy (call) or sell (put) shares of a specific instrument.
As your risk is the cost of your premium, you can notice that buying options is a risky proposition.
To make a profit on the buying side:
  1. You have to be directionally correct. The price must go up for calls, down for puts.
  2. AND the share price move must be bigger than the premium you paid.
  3. AND the share price move must happen before the option expiration.
You will notice that it is pretty unforgiving. Sure, when you are right, you can make a 100% to 1000% profit in a few months, weeks, or even days. But there is a big chance that you will suffer death by thousands of cuts with your long call or put contracts losing value every day and become worthless.
We were discussing earlier how volatile stocks can have a high extrinsic value. What happens to your option price if the share is changing a lot and suddenly calms down? The extrinsic portion of the option price will crater quickly because volatility dropped, and time is still passing every day.
The same way you can buy options, you can also sell call and put options. Instead of buying the right to exercise your ITM calls and puts, you sell that right to a 3rd party (usually market makers).
To make a profit on the selling side:
  1. You have to be directionally correct.
  2. OR the share price does not move as much as the premium.
  3. OR the share price does not move before the option expiration.
Buying calls and puts mean that you need to have strong convictions on the share’s direction. I know that I am not good at predicting the future. However, I do believe in reversion to the mean (especially in this market :)), and I like to be paid as time is passing. In case you didn't guess yet, yes, I mostly sell options, I don’t buy them. This is a different risk, instead of death by a thousand cuts, a single trade can have a big loss, so proper contract sizing is really important.
It is worth noting that because you sold the right of exercise to a 3rd party, they can exercise at any time the option is ITM. When one party exercises, the broker randomly picks one of the option sellers and exercises the contract there. When you are on the receiving end of the exercise, it is called an assignment. As indicated earlier, for most parts, you will not be getting assigned on your short options as long as there is some extrinsic value left (because it is more profitable to sell the option than exercising it). Deep ITM options are more at risk, due to the sometimes inexistent extrinsic value. Also, the options just before the ex-dividend date when the dividend is as bigger than the extrinsic value are at risk, as it is a good way to get the dividend for a smaller cash outlay with little risk.
In summary:
The Greeks
Each option contract has a complex formula to calculate its premium (Black-Scholes is usually a good initial option pricing model to calculate the premiums).
Things that will determine the option premium are:
There are four key values calculated from the current option price: delta, gamma, theta, and vega. In the options world, we call them ‘the Greeks’.
Delta is how correlated your option price is compared to the underlying share price. By definition 100 shares have a delta of 100. If an option has a delta of 50, it means that if the share price increases by $1, the new price of your option means that you earned $50. Conversely, a drop of $1 means you will lose $50.
Each call contract bought will have a delta from 0 to 100. A deep ITM call will have a delta close to 100. An ATM call will have a delta around 50. Note that on expiration day, as the intrinsic value disappears, an ATM call behaves like the share price, with a delta close to 100. Buying a put will have a negative delta. A deep ITM put will have a delta close to -100. Selling a call will have a negative delta, selling a put will have a positive delta.
Gamma is the rate of change of delta as the underlying share price changes. Unless you are a market maker or doing gamma scalping (profiting from small changes in the share price), you should not worry too much about gamma.
Theta is how much money you lose or profit per day (week-end included!) on your option contracts. If you bought a call/put, your theta will be negative (you lose money every day due to the time passing closer to the contract expiration, and your option price slowly eroding). If you sold a call/put, your theta will be positive (you earn money every day from the premium). It is important to note that the theta accelerates as you get closer to the expiration. For the same strike and volatility, a theta for an option that has one month left will be smaller than the theta for an option that has one week left, and bigger than an option that has 6 months left. In the third post, I will explain how you can take advantage of this.
FWIW, with the current volatility, I get 0.1% to 0.2% of Return On Risk per day, so roughly 35% to 70% of return annualized. I don’t expect these numbers to keep like this for a long time, but I will profit as long as we are in this sideways market. I also have an overall positive delta, so I will benefit as the market goes up, and theta gain will soften the blow when the market goes down.
Vega is how much your option price will increase or decrease when the implied volatility of the share price increase by 1%. If you bought some puts or calls, your vega will be positive, as your extrinsic value will increase when volatility increases. Conversely, if you sold some puts or calls, your vega will be negative. On the sell side, you want the actual volatility to be lower than the implied volatility to make money.
This is why we often say that you sell options to sell the volatility. When volatility is high, sell options. When volatility is low, buy options. Not the opposite. This also explains why some people lose money when playing stock earnings despite being directionally correct. Before earnings, the option price takes into account the expected stock price change, so the volatility is significantly higher than usual. They bought an expensive call or put, numbers are out, share price moves in the correct direction, but because suddenly the volatility dropped (no uncertainty about the earnings anymore), the extrinsic value of the option got crushed, and offset the increase in intrinsic value. The result is not as much profit as expected or even a loss.
Bid/Ask spread
Options are less liquid than the corresponding shares, especially given the sheer quantity of strikes and expiration dates. The gap between the bid and the ask can be pretty big. If you are not careful about how you enter and exit the trade, you will transform a profitable trade into a losing one. Due to the small contract costs, the bid/ask spread adds up quickly, and with the trading fees, they can represent 10% or more of your profit. Beware!
Never ever buy or sell an option at the market price. Always use a limit order, start with the mid-price, or be even more aggressive. See if someone bites, it happens. If not, give up $0.05 or less, wait a bit longer, and do it again. Be patient. If you are at mid-price between the bid and the ask, and you think this is a fair price, and the market or time is on your side, again just be patient. It is better to not enter a trade that is not in your own terms than overpaying/underselling and reducing your profit/risk ratio too much.
LEAPs
Leap options have a very long expiration date. Usually one year or more. ETF indexes, like SPY, can have leaps of 1, 2, or 3 years away. They offer some advantages as they have a low theta. A deep ITM Leap can behave like the stock with 30% of the cost. Just remember that if the share drops by 30% long term, you will lose everything. Watch out! This is a personal experience of mine in 2008, where I diversified away from a few companies to many more companies by buying multiple leaps. It was akin to changing 100 shares into options with a delta of 250. However, when the market tanked, all these deep ITM leaps lost significantly (more than if I only had 100 shares). Good lesson learned. You win some, you lose some.
Number of shares
The vast majority of options trades at 100 shares per contract. But during share splits, or reverse splits, company reorganizations, or special dividend distributions, the numbers of shares can change. The options are automatically updated.
The 1:N splits are easily converted as you just get more contracts, and your strike is getting adjusted. For example, let’s say you own 1 contract of ABC with a strike of $200 controlling 100 shares (so exposure to $20k). Then the company splits 1:4, you are going to get 4 contracts with a strike of $50, with each contract controlling 100 shares (so still the same exposure of $20k).
The N:1 reverse splits are a tad more complex. Say you have 1 contract of ABC with a strike of $1, controlling 100 shares (so exposure to $100). Then the company reverse splits 5:1, you are going to still get 1 contract, but with a strike of $5, with each contract controlling 20 shares (so still the same exposure of $100). You will still be able to trade these 20 shares contracts but they will slowly trade less and less and disappear over time, as new 100 shares contracts will be created alongside.
Brokers and fees
In my experience, ThinkOrSwim (TOS owned by TD Ameritrade, being bought by Schwab) is one of the very best brokers to trade options. The software on PC, Mac, iPad, or iPhone is top-notch. Very easy to use, very intuitive, very responsive. Pricing on contracts dropped recently, it’s now $0.65 per contract, with $0 for exercise or assignment. You may actually be able to negotiate an even better price.
I also have Interactive Brokers (IB), and that’s the other side of the spectrum. The software is very buggy, unstable, unintuitive, and slow to update. I tried few options trades and got too frustrated to continue. Too bad, it has very good margin rates (although if you are an option seller it is not really needed, as you receive cash when you open your trades). However, it’s perfectly acceptable to trade plain ETFs and shares.
Market Markers
Most of the options you buy or sell from will be provided by the Markets Makers. Do not expect that you will get good deals from them.
You will see in the third post how you selling a put and buying a call is equivalent to buy a share. When you buy/sell a call / put from the market makers, you are guaranteed that they will hedge their corresponding positions by buying/selling a share and the opposite options (put/call).
The next post will introduce you to simple option strategies.
---
Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM
Post 2: Basics: Buying and Selling, the Greeks
Post 3a: Simple Strategies
Post 3b: Advanced Strategies
Post 4a: Example of trades (short puts, covered calls, and verticals)
Post 4b: Example of trades (calendars and hedges)
submitted by _WhatchaDoin_ to investing [link] [comments]

Ten Reasons why Artifact will be the biggest eSport title, ever

Ten Reasons why Artifact will be the biggest eSport title, ever
Written by Michael "rokman" Weldon
Hello Artifact! Before I get into the meat of the article, I thought I’d introduce myself. My card game experience comes from the Pokemon Trading Card Game. I started collecting and playing way back in the nineties. After nearly a decade playing casually, I ended up moving toward the competitive scene for a handful of years. I had a few big tournament wins and a lot of success playing the game. There was even a point that I was a paid writer for a Pokemon Trading Card Game website known as SixPrizes, you can see my articles here.
Within the eSports world, I have worked in the production side of things at a few major tournaments. As a Production Assistant and Camera operator, I worked at IGN Pro League 3 in Atlantic City (Here’s a picture of me and Idra), as well as IGN Pro League 5 in Las Vegas (Here’s a photo before we opened the main stage). Live eSports events are so unbelievable to witness, as a fan. Twitch is convenient, but it is just not the same. Being there, LIVE, with people who share your interest, who will shout and scream with you when your favorite team wins? There is nothing like it. You have to go to a live event for your favorite game, if you haven’t already.
The last thing about myself I’d like to cover is what drew me to Artifact. I’ve always been a fan of the RTS genre. DotA, Heroes of Newerth, League of Legends, you name it. If you played HoN, you might remember that “Too Bad it’s Me, Blacksmith” meme? Yeah, that was me. Sorry! Ha!
Truth be told, I’ve had an off-and-on relationship with all of these games. Going from riding a high of winstreaks to the inevitable burning out when paired with casual players who are playing to have fun and goof around. Who even plays games to have fun? Totally insane, right? Sheesh!
So finally, there’s Artifact, a game that I can only blame myself when I lose. One versus one in an RTS style game, based around trading cards, it’s basically the exact type of game I’ve been looking for my entire life. That’s why I’m writing this article on reddit, and that’s why I know Artifact will be the biggest eSport title, ever. Here’s ten reasons that’s going to happen --
  1. Valve
Valve has such an incredible track record of PC titles. Half-Life, Counter-Strike, Team Fortress, Portal, Left for Dead, DotA 2, it’s actually unbelievable. And when Artifact was announced at the DotA International 7, it wasn’t received well. But that’s because those people in the crowd were just plain ignorant. (Yeah, I said it!) They were thinking Valve was piggy-backing off of Hearthstone’s success.
I guess you can’t blame them for thinking that, many developers have entered the genre of digital trading card games, but none of them have had Hearthstone’s financial success. And damn, Hearthstone has been an extremely profitable title. In the most recent Financial report from Activision Blizzard, the company was reporting that pre-orders for the Boomsday Project were exceeding any previous expansion. That’s actually off the charts, because Hearthstone has been around for over FOUR YEARS now!
But there’s a few things Hearthstone hasn’t done right, from a competitive standpoint. And now that I think about it, has Blizzard ever handled eSports correctly? If you ask me, they’ve only ever been interested in making games that are popular, which is fine, and clearly worked for them as a business model. But that doesn't translate into a competitive eSport.
But Valve though? Get out of town! They’ve been a major player in eSports for many years. Just take a look at the DotA International’s prize support! Here’s a list of the Top Games awarding prize money across all tournaments. DotA 2 and Counter-Strike: Global Offensive are the top games. But get this, after adding up ALL of the prize support between the next THIRTY games on this list, you STILL don’t exceed the total prize support from DotA 2 and CS:GO. That’s BONKERS!
I know what you’re going to say, and I agree, prize support isn’t everything. But it’s definitely a massive part of a game’s success (And by extension, the developer of that game). Think about all the people involved when a game is successful, other than players. Production crew at live events (I was one of those guys!), camera crews, media companies, eSports organizations, even a company like Twitch, which live streams events. All of this infrastructure keeps the whole thing in motion, so having massive prize support for players is the very reason all of these other companies have spawned underneath a video game title.
And that’s why Valve is the number one reason I think Artifact is going to take over eSports. They know what they are doing. They organize these events. They create the prize pool for the DotA International. And they do that by offering all players the ability to buy cosmetics, with a portion of their purchases funding the actual tournament.
I put all my faith in GabeN and Valve to do this right. They’re the best in the business when it comes to this type of thing. But that’s not the only thing you need to take over eSports. You KIND OF need a good game, right? Well, let me introduce you to --
  1. Dr. Richard Garfield
Is there really anything else I need to say? The man himself, the CREATOR of the modern collectible card game. If the out-of-this-world success of Magic the Gathering isn’t enough to convince you, his understanding of skill versus luck in a game should do the trick. This is an hour long presentation he gave. If you haven’t listened to it, you should do so immediately.
Many of the following reasons on my list will reference some of the concepts Dr. Garfield covers in his presentation. Also many mechanics in Artifact are built on these concepts presented here, and because of that, there isn’t much more I need to elaborate on, for now.
If you weren’t aware, Magic the Gathering is the biggest card game, ever. Despite the current drama taking place, Magic the Gathering has been the premier card game to play if you were looking to make a career out of cards. While it isn’t always a profitable career path, there are a small group of players that have raked in quite a bit of prize winnings over the years. Take a look at the Top 200 All-Time Money Leaderboards. That’s some eye-popping dollar signs, if you ask me.
But Dr. Richard Garfield doesn’t only want to cater to that tiny small percent of players, working toward big paychecks, and Magic the Gathering has recognized the different archetypes of players, known as Timmy, Johnny, and Spike. Dr. Garfield has even explained that he builds all kinds of cards, with these different player archetypes in mind.
I’d even say some of the core strategies amongst the four colors in Artifact embody a lot of the Timmy/Johnny/Spike concepts. This is important to mention because it means Dr. Garfield will cater to various playstyles in Artifact, which will allow people to be creative with their decklists, tailored to their individual style. And if you ask me, that is a recipe for some very exciting Artifact games!
So, looking at where we are now, we’ve got Valve developing a game designed by Dr. Richard Garfield. Already, that should be enough for you to believe in this game’s success. But I’m going to break it down even further. For a game to be the number one eSport, I think the most important thing has got to be the most obvious, a --
  1. High Skill Ceiling
Let’s take a look at Basketball. There’s many levels of basketball, from friendly pickup games on the street, to community leagues at the local recreation center, to high school, to college, to professional foreign markets, to the very top at professional NBA basketball. In each of these levels, you would imagine anyone in one level could take on a person in a level below theirs, and beat them greater than 99% of the time. While that isn’t always the case (Haven’t you heard of The Professor?) it clearly shows the extremely high skill ceiling of Basketball, just because it can facilitate so many different levels of expertise. This isn’t a difficult concept to grasp, I just wanted to go over it briefly.
For a video game title to completely dominate the eSport world, it has to have an extremely high skill ceiling. And this is a broad concept to cover, so I’m only going to cover one aspect of it, which is the one I think defines it the greatest… Decision making.
In Artifact, the number of decisions you make, and their future impact is one of the biggest elements that separate Artifact from other card games. Within the umbrella of decision making, are concepts like Hero deployment, spending resources in one lane over another, when to give up a lane, and many other specific examples like these. (I’ll probably cover this topic directly in it’s own article at another time.)
Comparing Artifact to Hearthstone, the average number of decisions per game has to be an astronomically different number. Unfortunately, I’m not able to play Artifact currently so I can’t give you these statistics. But I’m basing this assumption off of PAX West game videos that I watched. And I think a lot of people can agree with my assumption here. If not, go ahead and tell my why you disagree in the comments.
By having so many instances where players have to make decisions, even in a perceived simple concept like initiative, your game will automatically open itself up to a high skill ceiling. Bare with me here, I’m going to break this down, as simple as I can…
Similarly to basketball, you would assume that 99% of the time, the higher skilled player will win? Obviously the numbers won’t be that high. Nobody can say for sure what that number is for Artifact, but many experts believe that in Magic the Gathering, the higher skilled player has somewhere around 60 and 70% of winning. Let’s hope Artifact is above that number.
Now let’s take a look at the opposite of skill. That pesky thing that everyone says is the worst part of Artifact. And the one thing I think they are all dead wrong about, of course it’s --
  1. RNG
How many different possible unique games of Tic-Tac-Toe are there? The answer is 255,168. That’s every single unique series of plays you can make in Tic-Tac-Toe, period. But how many unique games of Dota 2 are there? Well, before the game even begins there over two quadrillion possible team compositions. (I don’t do math. These guys did though) And that’s before the games even begun!
What about professional sports, like Baseball? I’d say it’s essentially infinite, when taking into consideration so many variables about the athlete's body, different flights of the ball on a pitch, various types of swings, and if the bat makes contact, the nearly infinite points of contact that a baseball could land in a stadium, and that’s not even taking into consideration random things like a player tripping, or a fan in the audience interrupting the play. You get the idea.
This is an incredibly important detail when considering how successful a game can be in the eSports space. Card games are at a massive disadvantage, there’s only so many possible things that can happen, it’s actually a fairly small finite number of unique games, when compared to something like DotA 2.
So what’s the deal with adding in paths in front of creeps? What about the RNG Flop at the beginning of the game? These things are SO INCREDIBLY good for the game, it honestly perturbs me how many people following Artifact are unsure of this design choice. By adding in these variables into the possible unique games of Artifact, it increases the number by a HUGE MARGIN. I would argue this makes Artifact the number one card game, when it comes to the number of possible unique games. But why is this a good thing? Two reasons --
Even with a small deck of forty cards, you’ll have tons of unique games, even when facing opponent decks that are all the same decklist. Each game can be very different based on the minute RNG built into the game! That means you won’t get burn out playing the same decklist. Meta is stale and boring? At least your games will play out slightly different!
How does a player react to certain possible Flops? How does a player recover from poor creep spawns during redeployment phases? These variables create a much more exciting spectating experience! Which brings us to the next point --
  1. Spectator eSport
LuminousInverse, SUNSfanTV, SirActionSlacks, and fwosh did such an amazing job commentating games during the PAX West live streams. If you haven’t had a chance to watch them, I’d highly recommend it. During the commentary, in many situations, the commentators would talk about potential lines of play from the Challengers on stage. In almost every scenario, there were multiple plays to choose from, and many of them were fairly equal in perceived value.
In many other card games, there is a clear best play from your hand, every turn, and any other line would be called a “misplay”. But in Artifact, that line separating a viable play and a misplay is quite blurry. Without knowing future creep deployments, some plays could end up being better than others, even when they aren’t necessarily the number one best option at face value. This creates a scenario where commentators have A LOT to talk about during matches, sometimes too much.
On YouTube, you can find a guy making videos named Jackson Walters. I highly recommend his videos and would like to mention him for one specific reason. He uses a program to draw on the screen when he does his gameplay commentary. If you’ve ever seen an NFL broadcast, you would know this is a common feature during a replay. A yellow line, drawing over a freeze frame of the last play.
No other video game I know of uses this type of technology, and Artifact is absolutely an AMAZING candidate to take advantage of it. There is so much going on, when choosing a lane for a hero to go to, when choosing a spot for a creep to spawn in lane, potential pathing of units, all of these examples would make this technology great for commentators to relay pertinent information to the audience.
But those two things aren’t the only thing that makes Artifact a great spectator eSport. And this is a topic that is debated frequently amongst the community. Is Artifact going to have good “streamability” on Twitch? My answer is a resounding YES. Because Valve has done such an unbelievably good job designing the User Interface, a lot of things are clearly displayed to the audience.
Even to people who have very little knowledge of the game, just understanding the basics, they’ll be able to recognize when a player is put in a bad position (Here’s a hint -- there’s giant red X’s all over his units!) and the audience can understand when a player is forced to make a big play to turn things around.
Furthermore, with the UI clearly labeling Tower health and incoming Tower damage, the audience is given obvious indicators for “points” or a way to keep track of the “score” in the game. Which actually isn’t that common amongst many popular eSports titles. Speaking of eSports titles, let’s talk about the biggest thing Artifact has, that other card games don’t --
  1. Deck sharing
“Valve is even working on a deck sharing system that will let you lend a deck to a friend for a match just like you would in a physical card game.” Excuse me? I actually can’t believe this! I know a lot of you young people won’t appreciate how awesome of a concept like this really is, but I’m going to break it down for you.
Before the internet existed and everyone had everyone’s decklist, people actually had to work out decks on their own, and with their friends. I personally have spent hundreds of hours “solitairing” decks against no opponent, testing a deck’s consistency and working kinks out of the list. With the current state of electronic card games, people can get detailed statistics of all the top deck lists in the game, what the best players are using on ladder, and so on and so forth. Even in some games, at top tournaments, everyone’s deck list is public knowledge before it begins!
This is not how things have always been. Back in my day, people could go to major tournaments and whip out a completely unknown, Secret.dec, that no one has seen before. That player and his group of friends have already tested it a thousand games against the most popular decks in the meta. When things like this happened, people LOST their freaking minds. And to be honest, this is how some stars were born within some trading card game circles.
With Artifact’s Deck Sharing, Players will be able to put multiple decks together and give them to their friends, without them needing to invest money in the game, bring them in and use them as exclusive testing partners. While this might understandably sound a bit insane, I can see small groups of friends using this feature for testing purposes.
Other than the obvious, it being a gigantic tool to bring more players to Artifact, I’m looking at it from the competitive perspective. I could even solitaire games against myself, playing both decks simultaneously! Nice!
While this feature is great at bringing new players in and keeping the cost of entry low, there is something else Artifact has already taken into consideration, you guessed it --
  1. Card accessibility
Black Lotus $6,500. Ancestral Recall $3,363. Time Walk $2,628.
Yikes. This is the exact reason Valve has gone on record stating that they don’t want this to happen. Their first step in preventing this, at least in the first set, which releases on November 28th, is only having three rarities of cards. Common, Uncommon, and Rare. Also guaranteeing that one of the twelve cards included in each two dollar pack is a Rare.
They’re going to take things even further for an electronic trading card game, and allow players to buy and sell cards on the steam marketplace. Looking at it from a business standpoint, how genius is that? They not only sell every card pack in client, but they ALSO get a cut of every transaction made on the secondary market! Absolutely genius! (~15% of all secondary market sales goes right into Valve’s pocket!!!)
As of now, nobody can predict the average costs of cards, or the average cost to create a popular meta deck. But one thing is certain, we won’t have to buy hundreds of booster packs hoping to open some specific super-rare necessary-for-laddering “legendary cards” that can’t be resold in a secondary market! Yeah, I’m looking right at you, Hearthstone!
So we’ve got a situation where the game is designed by Richard Garfield, developed by Valve, has a high skill ceiling, with RNG that makes things interesting, great for spectating, allows deck sharing, and will have accessible cards? What’s even missing in something so amazing like that? Oh, I know, SirActionSlacks favorite topic --
  1. The Lore
Let’s say the 482,000 average players of DotA 2 won’t be interested in the amazing game I just described above. Well, I’d call them crazy, but let’s go with this for a moment. What is the one other thing that could potentially make them want to at least open the game and poke around? Yeah, it’s all those interesting characters they’ve known for years, it’s that universe they have spent thousands of hours playing in. A massive chunk of that playerbase might be interested in Artifact, just for the LORE.
And if you haven’t seen it already, definitely check out SirActionSlacks Loregasm videos on youtube. I had no idea how much lore was actually in the DotA universe, and it gave me a whole new appreciation for the game I spent many hours playing.
From the bits and pieces I’ve been able to piece together during the card reveals, inspecting the artwork and reading the flavor text in the tweet’s on the official Artifact Twitter page, it seems to me that the first set will be based around the Bronze Legion and the Red Mist Army.
There’s plenty of great lore to explore there, but it might even give us some clues about the first expansion set for Artifact? Maybe an Abyssal Horde expansion? Or even just a straight up Roseleaf Expansion? Only time will tell…
Even though I covered this subject briefly before, I’d like to mention it again, in it’s own bullet point --
  1. Prize support
Remember when I linked the Top 200 All-time Money leaders from Magic the Gathering? Number one on the list is Paulo Vitor Damo da Rosa, with total winnings of $497,785. That’s quite a bit of money playing a card game! Well, that is until someone is crowned victor of the first Artifact Tournament, slated for the first quarter of 2019. First place gets a cool $1,000,000. That’s more than DOUBLE any Magic the Gathering player has made... in all of it’s 25 year history! Yikes!
None of the details have been released yet, but if you play close attention to the Artifact website and the Official twitter @PlayArtifact, they’ll be announcing it soon, hopefully. Many players hoping to take a stab at that prize pool are anxiously waiting to hear how they could potentially qualify for the big tournament, myself included.
But as I’ve mentioned before, a giant prize pool isn’t the only key to success as an eSport, it’s many other things. What I would like you to remember, is how many industries can be supported when a prize pool gets that large. But money doesn’t just bring in a bunch of companies underneath it, it also brings in SPONSORS!
Sponsors support all those gaming organizations, that sign pro players to represent them, and allows for such a competitive space to become an eSport. This in turn creates an environment where many people can provide for their families, support each other, and their communities, all from a video game. If that doesn’t get you excited, then you’re truly dead inside. Or your a hundred years old and don’t know what a video game is.
And finally, the above nine things would make a pretty great game, but there’s still one last thing that makes all the difference. In my opinion, it’s the most important piece of success for a video game title to be the number one eSport...
  1. Content creators
Here’s a list of some of the best content creators out there right now, making amazing content for Artifact. If you aren’t already following all of these guys, I highly recommend you do so immediately, not just because what they’re making is awesome, but also because they are giving away beta keys!
Artifaction
The Artifaction podcast is hosted by SUNSfanTV and SirActionSlacks. They just held a massive create-a-card competition for 2 beta keys! If you missed it, that’s unfortunate, because it was great watching how miserable these two were after they reviewed over a thousand cards on stream (Which was only half of the submissions!).
BTS Podcast
Hosted by LuminousInverse and Hotbid. One of my favorite podcasts out there right now, these guys are great. Hotbid is a natural talent for keeping the podcast moving and making sure everyone on mic stays opinionated, taking hard stances. That’s what creates discussion, that’s what makes a podcast interesting. Creating debates. I can’t recommend these guys enough!
Artificer’s Guild
This is an all encompassing youtube channel, covering news, card releases, reviews, lore, it’s a great channel to have on subscribe. Check out their videos, they come out every few days!
RobAJG
What a great twitch channel this guy is running! He’s offering gameplay reviews, interviews, card reveals, as well as personal commentary. He does stream a lot of games other than Artifact, but when he streams Artifact, he can bring the house down.
Jackson Walters
While a newer content creator for Artifact (he’s only got three videos up), these videos are absolutely PACKED with amazing information you can break down. He is on another level when it comes to breaking down some pinpoint decision making moments in games. If you want to play on a high level in Artifact, definitely watch his videos.
Swim
Swim is a top Gwent streamer and dabbling with the idea of moving to Artifact. Personally, I think he’d be an amazing addition to the Artifact community and he’s got only one video up currently, breaking down the Black cards and revealing his own card, Slay. Make sure you give him plenty of love because he is a great creator!
Lastly, I’d like to include myself in this list of content creators. You can check out my twitter here.
I’m looking to write more articles like this in the future (If you guys enjoyed it, that is) Some of the topics I’ll be covering are going to be pretty heavy, like this article, but also decklists, analyzing metas and tournament results, maybe patch notes (if Valve decides to patch Artifact and change cards), interviews, pro scene topics, maybe even tracking cards on the marketplace, and predicting future meta shifts! I’d also like to do a card reveal, if Valve is interested in spreading the love. Seriously, Valve, I’d die if you sent me a card reveal...
In conclusion, because of the ten reasons stated above, I believe Artifact will be the biggest eSport title, ever. I’d love to hear why you agree or disagree, so comment below! Also, one last thing, I do have a beta key to give away, if you follow me on twitter @rokmanfilms, I might do something fun to give the key away. I know you fiends are only motivated by the chance of winning a key! Ha!
Thanks for reading! I’ll be posting again soon…
ONE LAST THING -- I am interested in being a writer for a publication or website. If you’re interested in adding a writer like me to your team, you can Direct Message me on twitter, message me on Discord at rokman#5483, or message me here on Reddit! Sorry, not sorry, for the shameless plug!
submitted by Mei_Xiang to forsen [link] [comments]

The Mouthbreather's Guide to the Galaxy

The Mouthbreather's Guide to the Galaxy
Alright CYKAS, Drill Sgt. Retarded TQQQ Burry is in the house. Listen up, I'm gonna train yo monkey asses to make some motherfucking money.

“Reeee can’t read, strike?” - random_wsb_autist
Bitch you better read if you want your Robinhood to look like this:
gainz, bitch


Why am I telling you this?
Because I like your dumb asses. Even dickbutts like cscqb4. And because I like seeing Wall St. fucking get rekt. Y’all did good until now, and Wall St. is salty af. Just google for “retail traders” news if you haven’t seen it, and you’ll see the salty tears of Wall Street assholes. And I like salty Wall St. assholes crying like bitches.
https://www.zerohedge.com/markets/retail-investors-are-crushing-hedge-funds-again

That said, some of you here are really motherfucking dense & the sheer influx of retardation has been driving away some of the more knowledgeable folks on this sub. In fact, in my last post, y'all somehow managed to downvote to shit the few guys that really understood the points I was making and tried to explain it to you poo-slinging apes. Stop that shit yo! A lot of you need to sit the fuck down, shut your fucking mouth and listen.
So I'm going to try and turn you rag-tag band of dimwits into a respectable army of peasants that can clap some motherfucking Wall Street cheeks. Then, I'm going to give you a mouthbreather-proof trade that I don't think even you knuckleheads can mess up (though I may be underestimating you).
If you keep PM-ing me about your stupid ass losses after this, I will find out where you live and personally, PERSONALLY, shit on your doorstep.
This is going to be a long ass post. Read the damned post. I don't care if you're dyslexic, use text-to-speech. Got ADHD? Pop your addys, rub one out, and focus! Are you 12? Make sure to go post in the paper trading contest thread first.

THE RULES:
  1. Understand that most of this sub has the critical reading skills of a 6 year old and the attention span of a goldfish. As such, my posts are usually written with a level of detail aimed at the lowest common denominator. A lot of details on the thesis are omitted, but that doesn't mean that the contents in the post are all there is to it. If I didn't do that, every post'd have to be longer than this one, and 98% of you fucks wouldn't read it anyway. Fuck that.
  2. Understand that my style of making plays is finding the >10+ baggers that are underpriced. As such, ALL THE GOD DAMN PLAYS I POST ARE HIGH-RISK / HIGH-REWARD. Only play what you can afford to risk. And stop PM-ing me the second the market goes the other way, god damn it! If you can't manage your own positions, I'm going to teach your ass the basics.
  3. Do you have no idea what you're doing and have a question? Google it first. Then google it again. Then Bing it, for good measure. Might as well check PornHub too, you never know. THEN, if you still didn't find the answer, you ask.
  4. This sub gives me Tourette's. If you got a problem with that, well fuck you.

This shit is targeted at the mouthbreathers, but maybe more knowledgeable folk’ll find some useful info, idk. How do you know if you’re in the mouthbreather category? If your answer to any of the following questions is yes, then you are:
  • Are you new to trading?
  • Are you unable to manage your own positions?
  • Did you score into the negatives on the SAT Critical Reading section?
  • Do you think Delta is just an airline?
  • Do you buy high & sell low?
  • Do you want to buy garbage like Hertz or American Airlines because it's cheap?
  • Did you buy USO at the bottom and are now proud of yourself for making $2?
  • Do you think stOnKs oNLy Go uP because Fed brrr?
  • Do you think I'm trying to sell you puts?
  • If you take a trade you see posted on this sub and are down, do you PM the guy posting it?
  • Do you generally PM people on this sub to ask them basic questions?
  • Is your mouth your primary breathing apparatus?
Well I have just the thing for you!


Table of Contents:
I. Maybe, just maybe, I know what I’m talking about
II. Post-mortem of the February - March 2020 Great Depression
III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS
IV. Busting your retarded myths
V. LIQUIDITY NUKE INBOUND
VI. The mouthbreather-proof trade - The Akimbo
VII. Quick hints for non-mouthbreathers


Chapter I - Maybe, just maybe, I know what I’m talking about
I'm not here to rip you off. Every fucking time I post something, a bunch of dumbasses show up saying I'm selling you puts or whatever the fuck retarded thoughts come through their caveman brains.
"hurr durr OP retarded, OP sell puts" - random_wsb_autist
Sit down, Barney, I'm not here to scam you for your 3 cents on OTM puts. Do I always get it right? Of course not, dumbasses. Eurodollar play didn't work out (yet). Last TQQQ didn't work out (yet). That’s just how it goes. Papa Buffet got fucked on airlines. Plain retard Burry bought GME. What do you fucking expect?
Meanwhile, I keep giving y'all good motherfucking plays:
  1. 28/10/2019: "I'ma say this again, in case you haven't heard me the first time. BUY $JNK PUTS NOW!". Strike: "11/15, 1/17 and 6/19". "This thing can easily go below 50, so whatever floats your boat. Around $100 strike is a good entry point."
  2. 3/9/2020: "I mean it's a pretty obvious move, but $JNK puts."
  3. 3/19/2020, 12pm: "UVXY put FDs are free money." & “Buy $UVXY puts expiring tomorrow if we're still green at 3pm. Trust me.”
  4. 3/24/2020: “$UUP 3/27 puts at $27.5 or $27 should be 10-baggers once the bill passes. I'd expect it to go to around $26.”
And of course, the masterpiece that was the TQQQ put play.
Chapter II. Post-mortem of the February - March 2020 Great Depression
Do you really understand what happened? Let's go through it.
I got in puts on 2/19, right at the motherfucking top, TQQQ at $118. I told you on 2/24 TQQQ ($108) was going to shit, and to buy fucking puts, $90ps, $70ps, $50ps, all the way to 3/20 $30ps. You think I just pulled that out of my ass? You think I just keep getting lucky, punks? Do you have any idea how unlikely that is?
Well, let's take a look at what the fuckstick Kevin Cook from Zacks wrote on 3/5:
How Many Sigmas Was the Flash Correction Plunge?
"Did you know that last week's 14% plunge in the S&P 500 SPY was so rare, by statistical measures, that it shouldn't happen once but every 14,000 years?"
"By several measures, it was about a 5-sigma move, something that's not "supposed to" happen more than once in your lifetime -- or your prehistoric ancestors' lifetimes!
"According to general statistical principles, a 4-sigma event is to be expected about every 31,560 days, or about 1 trading day in 126 years. And a 5-sigma event is to be expected every 3,483,046 days, or about 1 day every 13,932 years."

On 3/5, TQQQ closed at $81. I just got lucky, right? You should buy after a 5-sigma move, right? That's what fuckstick says:
"Big sigma moves happen all the time in markets, more than any other field where we collect and analyze historical data, because markets are social beasts subject to "wild randomness" that is not found in the physical sciences.
This was the primary lesson of Nassim Taleb's 2007 book The Black Swan, written before the financial crisis that found Wall Street bankers completely ignorant of randomness and the risks of ruin."
I also took advantage of the extreme 5-sigma sell-off by grabbing a leveraged ETF on the Nasdaq 100, the ProShares UltraPro QQQ TQQQ. In my plan, while I might debate the merits of buying AAPL or MSFT for hours, I knew I could immediately buy them both with TQQQ and be rewarded very quickly after the 14% plunge."
Ahahaha, fuckstick bought TQQQ at $70, cuz that's what you do after a random 5-sigma move, right? How many of you dumbasses did the same thing? Don't lie, I see you buying 3/5 on this TQQQ chart:
https://preview.redd.it/9ks35zdla5151.png?width=915&format=png&auto=webp&s=2c90d08494c52a1b874575ee233624e61ac27620
Meanwhile, on 3/3, I answered the question "Where do you see this ending up at in the next couple weeks? I have 3/20s" with "under 30 imo".

Well good fucking job, because a week later on 3/11, TQQQ closed at $61, and it kept going.
Nomura: Market staring into the abyss
"The plunge in US equities yesterday (12 March) pushed weekly returns down to 7.7 standard deviations below the norm. In statistical science, the odds of a greater-than seven-sigma event of this kind are astronomical to the point of being comical (about one such event every 160 billion years).
Let's see what Stephen Mathai-Davis, CFA, CQF, WTF, BBQ, Founder and CEO of Q.ai - Investing Reimagined, a Forbes Company, and a major fucktard has to say at this point:

"Our AI models are telling us to buy SPY (the SPDR S&P500 ETF and a great proxy for US large-cap stocks) but since all models are based on past data, does it really make sense? "
"While it may or may not make sense to buy stocks, it definitely is a good time to sell “volatility.” And yes, you can do it in your brokerage account! Or, you can ask your personal finance advisor about it."
"So what is the takeaway? I don’t know if now is the right time to start buying stocks again but it sure looks like the probabilities are in your favor to say that we are not going to experience another 7 standard deviation move in U.S. Stocks. OTM (out-of-the-money) Put Spreads are a great way to get some bullish exposure to a rally in the SPY while also shorting such rich volatility levels."
Good job, fuckfaces. Y'all bought this one too, admit it. I see you buying on this chart:
https://preview.redd.it/s9344geza5151.png?width=915&format=png&auto=webp&s=ebaef4b1414d901e6dafe354206ba39eb03cb199
Well guess what, by 3/18, a week later, we did get another 5 standard deviation move. TQQQ bottomed on 3/18 at $32.73. Still think that was just luck, punk? You know how many sigmas that was? Over 12 god-damn sigmas. 12 standard deviations. I'd have a much better chance of guessing everyone's buttcoin private key, in a row, on the first try. That's how unlikely that is.
https://preview.redd.it/luz0s3kbb5151.png?width=587&format=png&auto=webp&s=7542973d56c42e13efd3502331ac6cc5aea42630
"Hurr durr you said it's going to 0, so you're retarded because it didn't go to 0" - random_wsb_autist
Yeah, fuckface, because the Fed bailed ‘em out. Remember the $150b “overnight repo” bazooka on 3/17? That’s what that was, a bailout. A bailout for shitty funds and market makers like Trump's handjob buddy Kenny Griffin from Citadel. Why do you think Jamie Dimon had a heart attack in early March? He saw all the dogshit that everyone put on his books.

https://preview.redd.it/8fqvt37ama151.png?width=3711&format=png&auto=webp&s=0b06ee5101685c5274c6641a62ee9eb1a2a3f3ee


Read:
https://dealbreaker.com/2020/01/griffin-no-show-at-white-house
https://www.cnbc.com/2020/03/11/bank-ceos-convene-in-washington-with-president-trump-on-coronavirus.html
https://www.proactiveinvestors.co.uk/companies/news/914736/market-makers--didn-t-show-up-for-work--macro-risk-ceo-says-914736.html
https://www.chicagobusiness.com/finance-banking/chicago-trading-firms-seek-more-capital
https://www.housingwire.com/articles/did-non-qm-just-disappear-from-the-market/
https://www.bloomberg.com/news/articles/2020-03-22/bruised-hedge-funds-ask-clients-for-fresh-cash-to-buy-the-dip
https://fin24.com/Markets/Bonds/rand-bonds-rally-after-reserve-bank-intervention-20200320

Yup, everyone got clapped on their stupidly leveraged derivatives books. It seems Citadel is “too big to fail”. On 3/18, the payout on 3/20 TQQQ puts alone if it went to 0 was $468m. And every single TQQQ put expiration would have had to be paid. Tens or hundreds of billions on TQQQ puts alone. I’d bet my ass Citadel was on the hook for a big chunk of those. And that’s just a drop in the bucket compared to all the other blown derivative trades out there.

https://preview.redd.it/9ww27p2qb5151.png?width=2485&format=png&auto=webp&s=78f24265f3ea08fdbb37a4325f15ad9b61b0c694
Y’all still did good, 3/20 closed at $35. That’s $161m/$468m payoff just there. I even called you the bottom on 3/17, when I saw that bailout:

"tinygiraffe21 1 point 2 months ago
Haha when? I’m loading up in 4/17 25 puts"
"dlkdev
Scratch that, helicopter money is here."
"AfgCric 1 point 2 months ago
What does that mean?"
"It means the Fed & Trump are printing trillions with no end in sight. If they go through with this, this was probably the bottom."

"hurr durr, it went lower on 3/18 so 3/17 wasn't the bottom" - random_wsb_autist
Idiot, I have no way of knowing that Billy boy Ackman was going to go on CNBC and cry like a little bitch to make everyone dump, so he can get out of his shorts. Just like I have no way of knowing when the Fed decides to do a bailout. But you react to that, when you see it.
Do you think "Oh no world's ending" and go sell everything? No, dumbass, you try to figure out what Billy's doing. And in this case it was pretty obvious, Billy saw the Fed train coming and wanted to close his shorts. So you give the dude a hand, quick short in and out, and position for Billy dumping his short bags.
Video of Billy & the Fed train

Here's what Billy boy says:
“But if they don’t, and the government takes the right steps, this hedge could be worth zero, and the stock market could go right back up to where it was. So we made the decision to exit.”
https://www.businessinsider.sg/bill-ackman-explains-coronavirus-trade-single-best-all-time-podcast-2020-5
Also, “the single best trade of all time.” my ass, it was only a 100-bagger. I gave y’all a 150-bagger.
So how could I catch that? Because it wasn't random, yo. And I'm here to teach your asses how to try to spot such potential moves. But first, the technical bootcamp.

Chapter III. Mouthbreather's bootcamp on managing a position – THE TECHNICALS

RULE 1. YOU NEVER BUY OPTIONS AT OPEN. You NEVER OVERPAY for an option. You never FOMO into buying too fast. You NEVER EVER NEVER pump the premium on a play.
I saw you fuckers buying over 4k TQQQ 5/22 $45 puts in the first minutes of trading. You pumped the premium to over $0.50 dudes. The play's never going to work if you do that, because you give the market maker free delta, and he's going to hedge that against you. Let me explain simply:

Let's say a put on ticker $X at strike $50 is worth $1, and a put at strike $51 is worth $2.
If you all fomo in at once into the same strike, the market maker algos will just pull the asks higher. If you overpay at $2 for the $50p, the market maker will just buy $51ps for $2 and sell you $50ps for 2$. Or he'll buy longer-dated $50ps and sell you shorter-dated $50ps. Max risk for him is now 0, max gain is $1. You just gave him free downside insurance, so of course he's going to start going long. And you just traded against yourself, congrats.

You need to get in with patience, especially if you see other autists here wanting to go in at the same time. Don't step on each other's toes. You put in an order, and you wait for it to fill for a couple of seconds. If it doesn't fill, AND the price of the option hasn't moved much recently, you can bump the bid $0.01. And you keep doing that a few times. Move your strikes, if needed. Only get a partial fill or don't get a fill at all? You cancel your bid. Don't fucking leave it hanging there, or you're going to put a floor on the price. Let the mm algos chill out and go again later.

RULE 2. WATCH THE TIME. Algos are especially active at x:00, x:02, x:08, x:12, x:30 and x:58. Try not to buy at those times.
RULE 3. YOU USE MULTIPLE BROKERS. Don't just roll with Robinhood, you're just gimping yourself. If you don't have another one, open up a tasty, IB, TD, Schwab, whatever. But for cheap faggy puts (or calls), Robinhood is the best. If you want to make a play for which the other side would think "That's free money!", Robinhood is the best. Because Citadel will snag that free money shit like no other. Seriously, if you don't have a RH account, open one. It's great for making meme plays.

RULE 4. YOU DON'T START A TRADE WITH BIG POSITIONS. Doesn't matter how big or small your bankroll is. If you go all-in, you're just gambling, and the odds are stacked against you. You need to have extra cash to manage your positions. Which leads to
RULE 5. MANAGING YOUR WINNERS: Your position going for you? Good job! Now POUND THAT SHIT! And again. Move your strikes to cheaper puts/calls, and pound again. And again. Snowball those gains.
RULE 6A. POUND THOSE $0.01 PUTS:
So you bought some puts and they’re going down? Well, the moment they reach $0.01, YOU POUND THOSE PUTS (assuming there’s enough time left on them, not shit expiring in 2h). $0.01 puts have amazing risk/return around the time they reach $0.01. This is not as valid for calls. Long explanation why, but the gist of it is this: you know how calls have unlimited upside while puts have limited upside? Well it’s the reverse of that.
RULE 6B. MANAGING YOUR LOSERS:
Your position going against you? Do you close the position, take your loss porn and post it on wsb? WRONG DUMBASS. You manage that by POUNDING THAT SHIT. Again and again. You don't manage losing positions by closing. That removes your gainz when the market turns around. You ever close a position, just to have it turn out it would have been a winner afterwards? Yeah, don't do that. You manage it by opening other positions. Got puts? Buy calls. Got calls? Buy puts. Turn positions into spreads. Buy spreads. Buy the VIX. Sell the VIX. They wanna pin for OPEX? Sell them options. Not enough bankroll to sell naked? Sell spreads. Make them fight you for your money, motherfuckers, don't just give it away for free. When you trade, YOU have the advantage of choosing when and where to engage. The market can only react. That's your edge, so USE IT! Like this:

Example 1:
Initial TQQQ 5/22 position = $5,000. Starts losing? You pound it.

https://preview.redd.it/gq938ty8e5151.png?width=944&format=png&auto=webp&s=734ab7ed517f0e6822bfaaed5765d1272de398d1
Total pounded in 5/22 TQQQ puts = $10,824. Unfortunately expired worthless (but also goes to show I'm not selling you puts, dickwads)
Then the autists show up:
"Hahaha you lost all your money nice job you fucking idiot why do you even live?" - cscqb4
Wrong fuckface. You see the max pain at SPX 2975 & OPEX pin coming? Sell them some calls or puts (or spreads).

https://preview.redd.it/7nv23fr41a151.jpg?width=750&format=pjpg&auto=webp&s=14a8879c975646ffbfe2942ca1982bfabfcf90df
Sold 9x5/20 SPX [email protected], bam +$6,390. Still wanna pin? Well have some 80x5/22 TQQQ $80cs, bam anotha +$14,700.

https://preview.redd.it/1iqtpmc71a151.jpg?width=750&format=pjpg&auto=webp&s=df9b954131b0877f4acc43038b4a5a4acf544237
+$21,090 - $10,824 = +$10,266 => Turned that shit into a +94.85% gain.

.cscqb4 rn

You have a downside position, but market going up or nowhere? You play that as well. At least make some money back, if not profit.

Example 2:

5/22, long weekend coming right? So you use your brain & try to predict what could happen over the 3-day weekend. Hmm, 3 day weekend, well you should expect either a shitty theta-burn or maybe the pajama traders will try to pooomp that shite on the low volume. Well make your play. I bet on the shitty theta burn, but could be the other, idk, so make a small play.

Sold some ES_F spreads (for those unaware, ES is a 50x multiplier, so 1 SPX = 2 ES = 10 SPY, approximately). -47x 2955/2960 bear call spreads for $2.5. Max gain is $2.5, max loss is 2960-2955 = $5. A double-or-nothing basically. That's $5,875 in premium, max loss = 2x premium = $11,750.
Well, today comes around and futures are pumping. Up to 3,014 now. Do you just roll over? You think I'm gonna sit and take it up the ass? Nah bros that's not how you trade, you fucking fight them. How?
I have:
47x 2960 calls
-47x 2955 calls

Pajama traders getting all up in my grill? Well then I buy back 1 of the 2955 calls. Did that shit yesterday when futures were a little over 2980, around 2982-ish. Paid $34.75, initially shorted at $16.95, so booked a -$892 loss, for now. But now what do I have?

46x 2955/2960 bear calls
1x 2960 long call

So the fuckers can pump it. In fact, the harder they pump it, the more I make. Each $2.5 move up in the futures covers the max loss for 1 spread. With SPX now at ~3015, that call is $55 ITM. Covers 24/46 contracts rn. If they wanna run it up, at 3070 it's break-even. Over that, it's profit. I'll sell them some bear call spreads over 3050 if they run it there too. They gonna dump it? well under 2960 it's profit time again. They wanna do a shitty pin at 3000 today? Well then I'll sell them some theta there.
Later edit: that was written yesterday. Got out with a loss of only $1.5k out of the max $5,875. Not bad.
And that, my dudes, is how you manage a position.

RULE 7 (ESPECIALLY FOR BEARS). YOU DON'T KEEP EXTRA CASH IN YOUR BROKER ACCOUNT. You don't do it with Robinhood, because it's a shitty dumpsterfire of a broker. But you don't do it with other brokers either. Pull that shit out. Preferably to a bank that doesn't play in the markets either, use a credit union or some shit. Why? Because you're giving the market free liquidity. Free margin loans. Squeeze that shit out, make them work for it. Your individual cash probably doesn't make a dent, but a million autists with an extra $1200 trumpbucks means $1.2b. That's starting to move the needle. You wanna make a play, use instant deposits. And that way you don't lose your shit when your crappy ass broker or bank gets its ass blown up on derivative trades. Even if it's FDIC or SIPC insured, it's gonna take time until you see that money again.


Chapter IV. BUSTING YOUR RETARDED MYTHS

MYTH 1 - STONKS ONLY GO UP

Do you think the market can go up forever? Do you think stOnKs oNLy Go uP because Fed brrr? Do you think SPX will be at 5000 by the end of the month? Do you think $1.5 trillion is a good entry point for stonks like AAPL or MSFT? Do you want to buy garbage like Hertz or American Airlines because it's cheap? Did you buy USO at the bottom and are now proud of yourself for making $2? Well, this section is for you!
Let's clear up the misconception that stonks only go up while Fed brrrs.

What's your target for the SPX top? Think 3500 by the end of the year? 3500 by September? 4000? 4500? 5000? Doesn't matter, you can plug in your own variables.

Let's say SPX only goes up, a moderate 0.5% each period as a compounded avg. (i.e. up a bit down a bit whatever, doesn't matter as long as at the end of your period, if you look back and do the math, you'll get that number). Let's call this variable BRRR = 0.005.

Can you do the basic math to calculate the value at the end of x periods? Or did you drop out in 5th grade? Doesn't matter if not, I'll teach you.


Let's say our period is one week. That is, SPX goes up on average 0.5% each week on Fed BRRR:
2950 * (1.005^x), where x is the number of periods (weeks in this case)

So, after 1 month, you have: 2950 * (1.005^4) = 3009
After 2 months: 2950 * (1.005^8) = 3070
End of the year? 2950 * (1.005^28) = 3392

Now clearly, we're already at 3015 on the futures, so we're moving way faster than that. More like at a speed of BRRR = 1%/wk

2950 * (1.01^4) = 3069
2950 * (1.01^8) = 3194
2950 * (1.01^28) = 3897


Better, but still slower than a lot of permabulls would expect. In fact, some legit fucks are seriously predicting SPX 4000-4500 by September. Like this dude, David Hunter, "Contrarian Macro Strategist w/40+ years on Wall Street". IDIOTIC.
https://twitter.com/DaveHcontrarian/status/1263066368414568448

That'd be 2950 * (BRRR^12) = 4000 => BRRR = 1.0257 and 2950 * (BRRR^12) = 4500 => BRRR = 1.0358, respectively.

Here's why that can't happen, no matter the amount of FED BRRR: Leverage. Compounded Leverage.

There's currently over $100b in leveraged etfs with a 2.5x avg. leverage. And that's just the ones I managed to tally, there's a lot of dogshit small ones on top of that. TQQQ alone is now at almost $6b in AUM (topped in Fed at a little over $7b).

Now, let's try to estimate what happens to TQQQ's AUM when BRRR = 1.0257. 3XBRRR = 1.0771. Take it at 3XBRRR = 1.07 to account for slippage in a medium-volatility environment and ignore the fact that the Nasdaq-100 would go up more than SPX anyway.

$6,000,000,000 * (1.07^4) = $7,864,776,060
$6,000,000,000 * (1.07^8) = $10,309,100,000
$6,000,000,000 * (1.07^12) = $13,513,100,000
$6,000,000,000 * (1.07^28) = $39,893,000,000.

What if BRRR = 1.0358? => 3XBRR = 1.1074. Take 3XBRRR = 1.10.
$6,000,000,000 * (1.1^4) = $8,784,600,000
$6,000,000,000 * (1.1^8) = $12,861,500,000
$6,000,000,000 * (1.1^12) = $18,830,600,000
$6,000,000,000 * (1.1^28) = $86,526,000,000

And this would have to get 3x leveraged every day. And this is just for TQQQ.

Let's do an estimation for all leveraged funds. $100b AUM, 2.5 avg. leverage factor, BRRR = 1.0257 => 2.5BRRR = 1.06425

$100b * (1.06^4) = $128.285b
$100b * (1.06^8) = $159.385b
$100b * (1.06^12) = $201.22b
$100b * (1.06^28) = $511.169b

That'd be $1.25 trillion sloshing around each day. And the market would have to lose each respective amount of cash into these leveraged funds. Think the market can do that? You can play around with your own variables. But understand that this is just a small part of the whole picture, many other factors go into this. It's a way to put a simple upper limit on an assumption, to check if it's reasonable.

In the long run, it doesn't matter if the Fed goes BRRR, if TQQQ takes in it's share of 3XBRRR. And the Fed can't go 3XBRRR, because then TQQQ would take in 9XBRRR. And on top of this, you have a whole pile of leveraged derivatives on top of these leveraged things. Watch (or rewatch) this: Selena Gomez & Richard H. Thaler Explaining Synthetic CDO through BLACKJACK

My general point, at the mouth-breather level, is that Fed BRRR cannot be infinite, because leverage.
And these leveraged ETFs are flawed instruments in the first place. It didn't matter when they started out. TQQQ and SQQQ started out at $8m each. For the banks providing the swaps, for the market providing the futures contracts, whatever counter-party to whatever instrument they would use, that was fine. Because it balanced out. When TQQQ made a million, SQQQ lost a million (minus a small spread, which was the bank's profit). Bank was happy, in the long run things would even out. Slippage and spreads and fees would make them money. But then something happened. Stonks only went up. And leveraged ETFs got bigger and more and more popular.
And so, TQQQ ended up being $6-7b, while SQQQ was at $1b. And the same goes for all the other ETFs. Long leveraged ETF AUM became disproportionate to short AUM. And it matters a whole fucking lot. Because if you think of the casino, TQQQ walks up every day and says "I'd like to put $18b on red", while SQQQ walks up and says "I'd only like to put $3b on black". And that, in turn, forces the banks providing the swaps to either eat shit with massive losses, or go out and hedge. Probably a mix of both. But it doesn't matter if the banks are hedged, someone else is on the other side of those hedges anyway. Someone's eating a loss. Can think of it as "The Market", in general, eating the loss. And there's only so much loss the market can eat before it craps itself.

If you were a time traveller, how much money do you think you could make by trading derivatives? Do you think you could make $20 trillion? You know the future prices after all... But no, you couldn't. There isn't enough money out there to pay you. So you'd move the markets by blowing them up. Call it the Time-travelling WSB Autist Paradox.

If you had a bucket with a hole in the bottom, even if you poured an infinite amount of water into it, it would never be full. Because there's a LIQUIDITY SINK, just like there is one in the markets.
And that, my mouth-breathing friends, is the reason why FED BRRR cannot be infinite. Or alternatively, "STONKS MUST GO BOTH UP AND DOWN".

MYTH 2 - YOU CAN'T TIME THE MARKET

On Jan 14, 2020, I predicted this: Assuming that corona doesn't become a problem, "AAPL: Jan 28 $328.3, Jan 31 $316.5, April 1 $365.7, May 1 $386, July 1 $429 December 31 $200."
Now take a look at the AAPL chart in January. After earnings AAPL peaked at $327.85. On 1/31, after the 1st hour of trading, when the big boys make moves, it was at $315.63. Closed 1/31 at $309.51. Ya think I pulled this one out of my ass too?
Yes you can time it. Flows, motherfucker, flows. Money flow moves everything. And these days, we have a whole lot of RETARDED FLOW. Can't even call it dumb flow, because it literally doesn't think. Stuff like:

  • ETF flows. If MSFT goes up and AAPL goes down, part of that flow is going to move from AAPL to MSFT. Even if MSFT flash-crashes up to $1000, the ETF will still "buy". Because it's passive.
  • Option settlement flows. Once options expire, money is going to flow from one side to another, and that my friends is accurately predictable from the data.
  • Index rebalancing flows
  • Buyback flows
  • 401k passive flows
  • Carry trade flows
  • Tax day flows
  • Flows of people front-running the flows

And many many others. Spot the flow, and you get an edge. How could I predict where AAPL would be after earnings within 50 cents and then reverse down to $316 2 days later? FLOWS MOTHERFUCKER FLOWS. The market was so quiet in that period, that is was possible to precisely figure out where it ended up. Why the dump after? Well, AAPL earnings (The 8-K) come out on a Wednesday. The next morning, after market opens the 10-Q comes out. And that 10-Q contains a very important nugget of information: the latest number of outstanding shares. But AAPL buybacks are regular as fuck. You can predict the outstanding shares before the market gets the 10-Q. And that gives you EDGE. Which leads to

MYTH 3 - BUYBACKS DON'T MATTER

Are you one of those mouthbreathers that parrots the phrase "buybacks are just a tax-efficient way to return capital to shareholders"? Well sit the fuck down, I have news for you. First bit of news, you're dumb as shit. Second bit:

On 1/28, AAPL's market cap is closing_price x free_float_outstanding_shares. But that's not the REAL MARKET CAP. Because the number of outstanding shares is OLD AS FUCK. When the latest number comes out, the market cap changes instantly. And ETFs start moving, and hedges start being changed, and so on.

"But ETFs won't change the number of shares they hold, they will still hold the same % of AAPL in the index" - random_wsb_autist

Oh my fucking god you're dumb as fuck. FLOWS change. And the next day, when TQQQ comes by and puts its massive $18b dong on the table, the market will hedge that differently. And THAT CAN BE PREDICTED. That's why AAPL was exactly at $316 1 hour after the market opened on 1/31.

So, what can you use to spot moves? Let me show you:
Market topped on 2/19. Here’s SPY. I even marked interesting dates for you with vertical lines.

https://preview.redd.it/7agm171eh5151.png?width=3713&format=png&auto=webp&s=d94b90dcd634c8dc688925585bf0a02c3299f71b
Nobody could have seen it coming, right? WRONG AGAIN. Here:

https://preview.redd.it/i1kdp3cgh5151.png?width=3713&format=png&auto=webp&s=7a1e086e9217846547efd3b6c5249f4a7ebe6d9e
In fact, JPYUSD gave you two whole days to see it. Those are NOT normal JPYUSD moves. But hey maybe it’s just a fluke? Wrong again.

https://preview.redd.it/fsyhenckh5151.png?width=3693&format=png&auto=webp&s=03200e10b008257ae15d40b474c4cf4d8c23670f
Forex showed you that all over the place. Why? FLOWS MOTHERFUCKER FLOWS. When everything moves like that, it means the market needs CASH. It doesn’t matter why, but remember people pulling cash out of ATMs all over the world? Companies drawing massive revolvers? Just understand what this flow means.
The reversal:
https://preview.redd.it/4xe97l0oh5151.png?width=1336&format=png&auto=webp&s=07aaa93f6b1d8f542101e40e431edccbc109918f
https://preview.redd.it/v6i0pdmoh5151.png?width=1338&format=png&auto=webp&s=74d5589961db2f978d4d582e6d7c58a85f6305f9
But it wasn’t just forex. Gold showed it to you as well. Bonds showed it to you as well.
https://preview.redd.it/40j53u8th5151.png?width=3711&format=png&auto=webp&s=fe39ab51321d0f98149d33e33253e69f96c48e23
Even god damn buttcoin showed it to you.
https://preview.redd.it/43lvafhvh5151.png?width=3705&format=png&auto=webp&s=1ef53283cbc0fb97f71c1ba935c0bd747809636e
And they all did it for 2 days before the move hit equities.

Chapter V. LIQUIDITY NUKE INBOUND
You see all these bankruptcies that happened so far, and all the ones that are going to follow? Do you think that’s just dogshit companies and it won’t have major effects on anything outside them? WRONG.
Because there’s a lot of leveraged instruments on top of those equities. When the stock goes to 0, all those outstanding puts across all expirations get instantly paid.
Understand that Feb-March was a liquidity MOAB. But this will end with a liquidity nuke.
Here’s just HTZ for example: $239,763,550 in outstanding puts. Just on a single dogshit small-cap company (this thing was like $400m mkt. cap last week).
And that’s just the options on the equity. There’s also instruments on etfs that hold HTZ, on the bonds, on the ETFs that hold their bonds, swaps, warrants, whatever. It’s a massive pile of leverage.
Then there’s also the ripple effects. Were you holding a lot of HTZ in your brokerage margin account? Well guess what big boi, when that gaps to 0 you get a margin call, and then you become a liquidity drain. Holding long calls? 0. Bonds 0. DOG SHIT!
And the market instantly goes from holding $x in assets (HTZ equity / bonds / calls) to holding many multiples of x in LIABILITIES (puts gone wrong, margin loans, derivatives books, revolvers, all that crap). And it doesn’t matter if the Fed buys crap like HTZ bonds. You short them some. Because when it hits 0, it’s no longer about supply and demand. You get paid full price, straight from Jerome’s printer. Is the Fed going to buy every blown up derivative too? Because that's what they'd have to do.
Think of liquidity as a car. The faster it goes, the harder it becomes to go even faster. At some point, you can only go faster by driving off a cliff. THE SQUEEZE. But you stop instantly when you hit the ground eventually. And that’s what shit’s doing all over the place right now.
Rewatch: https://www.youtube.com/watch?v=3hG4X5iTK8M
And just like that fucker, “I’m standing in front of a burning house, and I’m offering you fire insurance on it.”

Don’t baghold!
Now is not the time to baghold junk. Take your cash. Not the time to buy cheap crap. You don’t buy Hertz. You don’t buy USO. You don’t buy airlines, or cruises, or GE, or motherfucking Disney. And if you have it, dump that shit.
And the other dogshit that’s at ATH, congrats you’re in the green. Now you take your profits and fucking dump that shit. I’m talking shit like garbage SaaS, app shit, AI shit, etc. Garbage like MDB, OKTA, SNAP, TWLO, ZM, CHGG etc.
And you dump those garbage ass leveraged ETFs. SQQQ, TQQQ, whatever, they’re all dogshit now.
The leverage MUST unwind. And once that’s done, some of you will no longer be among us if you don’t listen. A lot of leveraged ETFs will be gone. Even some non-leveraged ETFs will be gone. Some brokers will be gone, some market makers will be gone, hell maybe even some big bank has to go under. I can’t know which ones will go poof, but I can guarantee you that some will. Another reason to diversify your shit. There’s a reason papa Warrant Buffet dumped his bags, don’t think you’re smarter than him. He may be senile, but he’s still a snake.
And once the unwind is done, THEN you buy whatever cheap dogshit’s still standing.
Got it? Good.
You feel ready to play yet? Alright, so you catch a move. Or I post a move and you wanna play it. You put on a small position. When it’s going your way, YOU POUND DAT SHIT. Still going? Well RUSH B CYKA BLYAT AND PLANT THE GOD DAMN 3/20 $30p BOMB.

Chapter VI - The mouthbreather-proof play - THE AKIMBO
Still a dumbass that can’t make a play? Still want to go long? Well then, I got a dumbass-proof trade for you. I present to you THE AKIMBO:

STEP 1. You play this full blast. You need some real Russian hardbass to get you in the right mood for trading, cyka.
STEP 2. Split your play money in 3. Remember to keep extra bankroll for POUNDING THAT SHIT.
STEP 3. Use 1/3 of your cash to buy SQQQ 9/18 $5p, pay $0.05. Not more than $0.10.
STEP 4. Use 1/3 of your cash to buy TQQQ 9/18 $20p, pay around $0.45. Alternatively, if you’re feeling adventurous, 7/17 $35p’s for around $0.5.
STEP 5. Use 1/3 of your cash to buy VIX PUT SPREADS 9/15 $21/$20 spread for around $0.15, no more than $0.25. That is, you BUY the 21p and SELL the 20p. Only using Robinhood and don’t have the VIX? What did I just tell you? Well fine, use UVXY then. Just make sure you don’t overpay.


Chapter VII - Quick hints for non-mouthbreathers
Quick tips, cuz apparently I'm out of space, there's a 40k character limit on reddit posts. Who knew?

  1. Proshares is dogshit. If you don't understand the point in my last post, do this: download https://accounts.profunds.com/etfdata/ByFund/SQQQ-historical_nav.csv and https://accounts.profunds.com/etfdata/ByFund/SQQQ-psdlyhld.csv. Easier to see than with TQQQ. AUM: 1,174,940,072. Add up the value of all the t-bills = 1,686,478,417.49 and "Net other assets / cash". It should equal the AUM, but you get 2,861,340,576. Why? Because that line should read: NET CASH = -$511,538,344.85
  2. Major index rebalancing June 22.
  3. Watch the violent forex moves.
  4. 6/25 will be red. Don't ask, play a spread, bag a 2x-er.
  5. 6/19 will be red.
  6. Not settled yet, but a good chance 5/28 is red.
  7. Front run the rebalance. Front-run the front-runners of the rebalance too. TQQQ puts.
  8. Major retard flow in financials yesterday. Downward pressure now. GS 180 next weeks looks good.
  9. Buy leaps puts on dogshit bond ETFs (check holdings for dogshit)
  10. Buy TLT 1/15/2021 $85ps for cheap, sell over $1 when the Fed stops the ass rape, rinse and repeat
  11. TQQQ flow looks good:
https://preview.redd.it/untvykuxea151.jpg?width=750&format=pjpg&auto=webp&s=a0a38c0acb088ebff689d043e48466eb76d38e2f

Good luck. Dr. Retard TQQQ Burry out.
submitted by dlkdev to wallstreetbets [link] [comments]

DKNG - Fundamental DD Inside - DKNG

This is an example of fundamental DD that takes place at ‘smart’ money institutions based on my professional experience in IBD, Private Equity & most recently at a HF (mods can message me for proof). Not thoroughly fleshed out b/c you autists have limited attention spans, but a summary. Figured I’d take the time to give back to this community that has provided many lolz, & should be a good measuring stick when evaluating other forms of fundamental DD posted here.
NFA.
DKNG - DraftKings, Inc.: vertically integrated US mobile betting operator that also provides retail sports betting & back-end betting solutions through SBTech. Think of SBTech as the tech ‘market-maker’ for traditional sports betting, they do all the funny math to set the betting odds & seem to be working on back-end solutions for DKNG Casino
The Big Picture
Only ~2% of the ~$90Bn gambling revenues were placed online which is the lowest in the world where betting online is legal. For example, in other countries online gaming activity represents ~6% - ~52% of total gambling revenues, with ~12% being the average.
Wall Street expects online gaming revenue to be $20Bn-$40Bn within the next 10 years. For this to be achieved, the online gambling market will have to achieve a ~30% penetration rate on total country gaming revenues. There is an expectation that this is could be easily achievable given penetration trends overseas - see page 11 of this: https://s1.rationalcdn.com/vendors/stars-group/documents/presentations/TSG-Investor-Day_March-27-2019.pdf
Other catalysts include increasing adaptation of sports betting in more states. States that have both legal sports betting + online sports betting permitted: NV, NJ, WV, PA, IA. Sports betting permitted but no online: DE, MS, RI, MO, AR. Prior to COVID there was ongoing discussions across many States, especially ones with growing deficits to explore how permitting sports betting could create a fresh avenue of tax dollars. Post COVID there is an expectation that these discussions will be given extra focus as many States will be hungry for incremental tax dollars. Important to note that currently 43/50 States allow DFS, but given the small share DFS has on total Gaming Revenues, it increasingly looks like DKNG is banking on traditional sports betting for a variety of reasons, more later. There are entire articles on Google arguing this catalyst so I’ll end this here.
Digging Deeper
DKNG’s main offerings are Daily Fantasy Sports (“DFS”) products & traditional sports book products to its clients. Long story short, a metric to look for in my opinion (that is curiously not reported by management or remarked on) is the hold % in traditional gaming sector parlance or the ‘rake’ & compare it to the ‘traditional’ gaming products like sports betting & Blackjack.
For DFS: DKNG takes ~15% of the prize pool (note: used to be ~6-11% [2]). Curiously, their main competitor FanDuel also has moved up to a ~15% rake recently. Google searches show the smaller competitors have a rake in the ~13% range.
This ‘rake’ has grown ~2x in 6 years, but it has been a delicate move on behalf of management. Why? B/c the more ‘sophisticated’ DFS players (equal to autistic day traders on Robinhood) have noted this increase & based on some Googling, some have moved down market to the smaller players. As a side note, many live casino games have their rules altered to grow the Hold %. For example, Blackjack games with 6:5 payouts on 21 have materially higher Hold % than the traditional BJ rules that pay out 3:2. Given the findings so far, DKNG may not have much room to materially increase its hold % in DFS games in the near-term from current of 15%. More on this later.
Now why the fuck is this important? This is important b/c the typical sports book (ex-Parlays) have a ~5% hold %/rake. Parlays have up to a ~30% hold (which is why it’s commonly known as the sucker’s bet), & just for reference, the average Blackjack table clocks in 14.5%. What this means: Every dollar put into these games, the “House” or DKNG, will take 15% of your money for DFS games, for sports bets they will be pocketing ~5%, up to ~30% if you’re into parlays, & we’ll just use the standard 14.5% BJ hold for the DraftKings Casino platform.
So why the acquisition of SBTech & a foray into the traditional sports gambling market? As you can see previously, the illegal sports betting market is >30x the size of the current daily fantasy sports market. So it’s clear that the DFS providers including DKNG are foraying into the space to capture this user base & hopefully convert them into games that have a higher hold %, such as DFS/DKNG Casino.
As of May 2020, DKNG has achieved a 30% penetration rate on its ~4mm ‘monetized’ DFS clientele to its Online Sports Book (OSB), from the OSB+DFS clientele, DKNG has converted 50% into its DraftKings Casino platform.
Including non-monetized users, user base totals at 12mm. Based on these unit economics: every 1mm of additional users -> 333k monetized users for DFS -> 100k users for OSB -> 50k users for DraftKings Casino.
Some Numbers – Italicized/Bolded the important
Numbers that represent Risks to Long Thesis
Things to look for when going Long
- Progress of additional States legalizing sports betting – specifically, States with DFS already legalized
- Cost structure evolving to a more fixed mix vs. the mostly variable mix currently as this will be the forward figure that determines profitability
- Increasing User Base (Curr.: 12mm) -> Monetized Base (Curr.: 4mm) -> MUP (1Q’20: 0.7mm)
Share Price Target
Given the cost structure of the company, I’m going to base the price targets around Enterprise Value / Revenues (driven by MUPs & ARPUs).
Bear Case MUP: 5mm -> $20.32 - $45.73
Base Case MUP: 5.5mm -> $22.27 - $50.10
Bull Case MUP: 6mm -> $24.21 - $54.47
These MUPs imply a monetized customer base of 28mm – 33mm. At the high-end, this implies that DKNG monetized customer base will equal MGM’s current total user base.
At yesterday’s close of $43.70, DKNG is trading at 3.5x – 4.5x forward Revenues on an expected >5,000 MUPs.
Share Price drivers / considerations:
- Continued multiple expansion
- MUP Growth exceeding beyond targets
Management Team
Jason Robins, 39 – Co-Founder & CEO. Duke BA, started DraftKings from day 1 in 2011. The 2 other buddies he started the Company with are still at DKNG. Dude navigated the Company through the scandal that rocked them in ’15 & ’16, and was the trailblazer in getting DFS labeled as a non-gambling product that enabled it to open in States without a gaming designation. This shit is the stuff that gets people in history books. His accomplishments make him seem like a very competent guy. Has 3 kids now, and only ~3% economic ownership in DKNG but has 90% of the voting power through his Class B share ownership. Also he actively participates in venture investments, sitting on 10 boards.
His comp plan performance bonus target is pretty murky, but main drivers are EPS growth, revenue growth, then a bunch of margin & return metrics, along with share price returns. Overall, very open-ended & it’s safe to say as long as shit doesn’t hit the fan, he will be eligible for his max payouts year over year. I’m assuming the lawyers tried to encompass everything possible for maximum flexibility to justify him earning his max comp as long as DKNG is still around.
Since he’s got voting control of 90%, I’ll end the specific-person overview here, but want to note that they have a very bloated C-suite. 12 folks at DKNG, 8 folks at SBTech, all with C-suite designations. Whereas their main competitor FanDuel, has 3 guys with a C-suite designations & 1 EVP, but is a sub under a larger ParentCo that has its own management team of ~5 guys.
Looking through glassdoor you can see the biggest complaint among employees giving bad reviews is based on management, all of the specific issues they point out IMO are a result of a top-heavy company. Seems like a good starting point to optimize their cost structure, but given Robins' history of sticking this entire thing through with his co-founders since '11 stuff like this doesn't seem to be a part of his playbook. They’re a public company now though, so it’s going to be interesting to see going forward.
TL;DR:
If I were to initiate a position in DKNG, the stock would have to fall to the $35-$37 range for me to be a buyer of the stock, and based on this rough intro analysis I'll be considering Put options if it breaches $50. I would not touch Calls at this level.

[1] Susquehanna Research – U.S. Online Gambling 6/27/19
[2] https://rotogrinders.com/articles/bang-for-your-buck-a-look-at-dfs-industry-rake-153302
[3] https://draftkings.gcs-web.com/static-files/8f3a5c5a-7228-45bf-aab2-63604111c48d
[4] Goldman Sachs Research – DKNG Initiation 5/19/20
[5]https://www.gamasutra.com/view/news/223071/Dont_monetize_like_League_of_Legends_consultant_says.php
[6] https://rotogrinders.com/threads/how-many-people-actually-play-dfs-regularly-252044
submitted by IAMB4TMAN to wallstreetbets [link] [comments]

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