Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Doubling Down on Dumb

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Observant Slopers will know by now that I sold to close a block of IWM puts on Friday morning, and that I regretted doing so. Now, I’m not the first trader who has screwed up like this. And it’s not the first time in my life I’ve done so. I’ve only done it eight or nine thousand times before. But I wanted to break down what happened, for your sake and mine, just to examine how emotions can really trip a person up.

Let’s rewind to Thursday morning. I was already quite short, having about 30 bearish positions set up. I did, however, have a ton of buying power left, and the market was definitely going my way. Things were getting weaker and weaker, and I decided to get very aggressive with a very large IWM put position – – about five times the size of my other bearish positions. The green circle shows about where I jumped in:

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Got Some. Missed Some.

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Traders leave money on the table. It comes with the territory. Sometimes the amount they leave on the table dwarfs whatever they were able to capture. This surely applies to me. Don’t get me wrong; I’ve had a lot of great ideas in recent months, and as I stand here now, I am aggressively short, having closed almost no positions (on the contrary, I’ve added).

Before I get to the regret I present to you my top percentage gainers from my existing bearish positions; these are all put options, and I presently have a hodgepodge of them with an average expiration date 104 days in the future. In other words, they’ve got lots of time to get even more profitable.

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The Last Table Leg

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As I mentioned recently, I am knocked off my feet at the long-term quality of the bearish setups before us. There is really just one holdout that is keeping this ridiculous market from entering the unchecked free-fall which it so richly deserves, and that is Apple. The same Apple that honestly hasn’t had a major innovation since 2007, but simply keeps cranking out new versions of its iPhone with marginal, irrelevant improvements. This company is globally considered the safe haven for cash. If and when it breaks, you can expect the entire house of cards to come tumbling down.

slopechart AAPL