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GME BABY! HOLD TO THE MOON* short interest: 75.54% of float by Ortex, 113.31% of float by S3 Shortsight * short share public availability: 0 Shorts are exiting their positions, but an amount of shares equal or almost equal to float is still shorted. robinhood and other brokerages didn't have the capital to place buy orders at times yesterday. Robinhood is apparently going so far as to liquidate GME shares in accounts that are not using margin trading(!) If you're still on robinhood, you should find a new broker ASAP. Retail brokers who didn't blow up completely yesterday include: * vanguard * td ameritrade * fidelity
NYSE:GMELong
by a2d1
1
[Advanced Education] Why the US Dollar is Going to DieThis post will be an extremely comprehensive and extensive analysis on the US Dollar. I’ll be explaining the history of this currency, the situation we are faced with today, and what this implies for our future. This post is lengthy, and can be difficult to comprehend if you're a beginner investor, but I've made it as digestible as possible and I highly recommend that you read through the entire post. Disclaimer: I am not a macroeconomist, or a forex expert. Even if I were, that would not imply that I would be able to accurately predict the future of a currency and the financial markets. This is for educational purposes only. Invest and trade at your own risk. Introduction - The entire world has been complaining about the difficulties that the USD has been causing as a key currency. - While there were benefits to having the USD as a key currency, this also meant that the US economy would take a smaller portion of the global economy, and that their trade competitiveness and employment rates would be negatively affected. - While the USD as a key currency provides benefits to major conglomerates and financial institutions, it causes problems to the average working-class people, instigating polarization and conflict. - While the USD’s status as a key currency remains solid, with increasing economic and political cost, the US would have reasons to voluntarily give up on this status. - Nixon gave up on the gold standard, Trump abandoned most international agreements. As history demonstrates, the USD could also be taken down from its place as a key currency as well. History The Beginning - During the mid-19th century, around the first world war, the United Kingdom’s Poud Sterling played the role of a key currency. - Back then, they used the gold standard, in which the currency was backed by gold. - In other words, if you took cash to the bank, they would exchange it for a certain amount of gold. - Around the UK’s end of its heydays in 1914, they were losing competitiveness due to massive gold outflow. (Since they use the gold standard, a trade deficit indicates gold outflow) - They halted the gold standard during WW1, and in 1925 attempted to bring it back. - But in doing so, they made a big mistake of using the same rates at 1914. - As a result, this lead to a even bigger, and faster outflow of gold from the UK, which ultimately led them to give up on their key currency status. - With the UK as the debtor, and the US as the creditor, the power dynamics shifts, and in 1944, the Bretton Woods system is established. The Bretton Woods System - This system defined all currencies in relation to the US Dollar, which itself was convertible to gold, effectively making the USD the world currency, as every other currency was pegged to it. - There were signs of this new system potentially being established. - Individuals were legally prohibited from owning gold from 1933 - The allied forces moved their gold to the US, in order to keep it safe. - With 70% of the world’s entire gold stored, the Bretton Woods system and the gold standard was implemented. (35 Dollars for an ounce of gold) The Triffin Dilemma - But there is a problem that comes with being a key currency, also known as the Triffin Dilemma - The USD becoming a key currency means that the entire world needs to use the dollar. - This means that the US needs to supply USD to the entire world. - But, if they print more USD for supply, the value of the Dollar drops. - If they don’t do so, in order to maintain the value of the Dollar, there won’t be enough Dollar for international trade The Fall of the Bretton Woods System - In the 1950s, with the emergence of the Japanese and European economy, the US faces a balance of payments deficit. - The US’ government expenditure increases significantly due to their War on poverty and the Vietnam war. - With the credibility of the USD begins to deteriorate globally, the world begins to change their dollars into gold. - The US faces a bank-run like situation, and Nixon abolishes the gold standard, implementing the fiat currency policy. Then why do we still use the USD? With the Gold standard, we were assured that we’d get an ounce of gold for $35. If fiat currency isn’t backed by a commodity, and is based on credit, what motivates us to continue using it? In order to figure out why, it’s important to look at what happened between the US and Saudi Arabia. Saudi Arabia - In 1933, not only did the US ban civilian ownership of gold, but they also established their diplomatic relations with Saudi Arabia. - US company Standard Oil of California obtains permission for the exploration of crude oil in Saudi Arabia (its subsidiary company is now Saudi Aramco, an oil company with the largest market cap in the world) - Then came World War 2. - Saudi Arabia wanted to remain neutral during WW2, but with Italy’s attack on the country, they had to find a country they could rely on. - The US realized the strategic importance of oil around this time, and decided to remain good friend with Saudi Arabia. - In 1970, the US’ aid to Saudi Arabia amounted to $16 million. - After the gold standard was abolished in 1971, the US’ aid to Saudi Arabia increased by 20x, reaching $312 million. - In 1974, William Simon, a former bond trader from Wallstreet, goes to Saudi Arabia to conclude a secret agreement - The agreement states that the US would provide military aid to Saudi Arabia, and import their oil. - In return, Saudi Arabia would purchase US Treasury Bonds. - This agreement was made secretly, due to the US’ relationship with other Middle Eastern countries, and Saudi Arabia secretly purchased US Treasury Bonds over 41 years. The Petrodollar System - Hence, the Petrodollar system was born. (Petroleum + Dollar) - This is a system, simply put, allows the US Dollar to be loosely backed by oil. - The US found a way to force other countries to use the USD by setting oil prices in USD. - This means that if Japan were to purchase oil, they would first have to exchange Japanese Yet (JPY) to USD. - As the Bretton Woods System falls, the USD is able to maintain its status through this new system. Why did Saudi Arabia purchase US Treasury Bonds? - If Saudi Arabia doesn’t purchase US bonds with the USD they received, this leads to an increasing amount of Dollar in circulation, devaluing the currency significantly. - By reaching an agreement in which Treasury bonds would be bought, the US would be able to operate with a massive government deficit. The Fundamental Issue of the Petrodollar System - However, the Petrodollar system also encompasses the Triffin Dilemma - The US needs to supply USD to the entire world in order to allow countries to purchase oil - A constant supply of USD means that the currency flows outside the country, indicating a trade deficit for the US - As you probably know from Economics 101, when a country is at a trade deficit, it indicates that their products are relatively cheaper in the international markets - The depreciation of the country’s currency leads to an increasing competitiveness in exports. - But in the case of the UK, because their currency was pegged to gold, a trade deficit led to gold outflow. - But that isn’t the case for the Petrodollar system. - Instead of gold outflow, damage was caused to the manufacturing industries in the US. - This is what explains the Rust Belt. Detroit, which once prospered, became a dead city. So What Does America Gain? - Why would the US want to keep the USD as the key currency? - There are also major benefits to keeping the Dollar as a key currency. - Despite the increasing supply, the value of the currency hardly depreciates. - There are benefits to multinational companies going overseas. - With the increasing demand for US Treasury bonds, foreign capital flows into the US - With this, the US is able to keep the interest rate on the bonds at a low rate. - In other words, the government is able to borrow money for a cheap price. - With this all combined, the US’ financial industry gains a competitive edge. Can this system last forever? - I personally believe that this system cannot last forever, and it’s only a matter of time until we see a huge paradigm shift. - There are mainly five reasons as to why this system cannot last forever. 1. Unnecessary Military Expenditure Post-Cold War - The US played the role of a world police during the Cold War. - But after the end of the war, massive military expenditure was deemed unnecessary and burdensome. - The US continued to play the role of a world police – leading up to the Trump administration – for oil and to keep the USD a key currency. 2. The US Shale Revolution - Then came the US Shale Revolution, in which the US significantly increased its production of oil and natural gas. - As a result, from a country that imports oil, the US becomes a country that exports oil - This indicates that there is no need for the US to play the role of a world police in order to secure oil. - Ultimately, while military expenditure fulfilled three main interests of the country (cold war, oil, and USD as a key currency), it’s only left with one purpose of keeping the USD a key currency. 3. China’s Rise - During the Bretton Woods system, the US GDP covered over 40% of the global GDP. - Currently, it barely covers 20% of the global GDP. - This indicates that the US needs to bear more financial instability in order to keep the USD a key currency. - In other words, the cost of maintaining the USD a key currency increases, in relation to the country’s GDP. - China also created the Petroyuan, which is China’s attempt to overthrow the existing Petrodollar system. - Lastly, China was once had the largest treasury bond holdings, which indicates that they could cause a shock to the US economy by selling huge chunks of their position. (Although this would also entail that China’s remaining Treasury bond holdings would lose a lot of value as well) - China has been exploiting the Petrodollar system’s leeway by not abiding by the conventional rules - In the Petrodollar system, foreign countries are able to build export competitiveness, and gain USD, which they return back to the US by purchasing US Treasury bonds. - China, instead of abiding by the rules, decided to purchase real assets and global infrastructure with the USD they gain. - This way, the FED has to support the US’ national debt, which destroys the benefit of having the USD as a key currency. 4. Political Instability (Socioeconomic Polarization) - As mentioned above, with the rise of American financial institutions and decline of the manufacturing industry, socioeconomic polarization is taking place, and it’s getting worse - There’s a discrepancy between economic classes, industries, and countries. - It’s no surprise that polarizing figures like Trump from the right, and Sanders from the left have gained interest from the general public. 5. The Fall of Labor-Intensive Industries. - In the past, the US was no match against China’s labor power. - But, with the 4th industrial revolution, automated robots and artificial intelligence is replacing labor, thereby providing a potential opportunity for the US to gain potential competitiveness in exports. - They could potentially let go of the USD’s status as a key currency, allow the USD to depreciate, and gain a competitive advantage in exports. - While it would take a long time before something like this happens, I believe that the foundations are being laid for such a transition. For these reasons, I believe it’s highly probable that the USD will stop playing the role of a key currency. How to Profit from this Crisis - With massive change comes massive chaos, and the ones who are able to remain unperturbed, and make the right decisions will be the ones to see opportunity in crisis. - I believe that Bitcoin can be one of the best ways to protect your wealth, as the USD collapses. - For an in-depth explanation on why I think so, make sure to check out my previous post: Conclusion In summary, the fall of the USD is a question of when, not if. As to what would happen in the next decade or two, I have no clue. However, the red lights giving warning signs are certainly getting clearer and clearer. You can either risk losing everything from a crisis that might come sooner than we expected, or be prepared for a situation like that, and capitalize on a once-in-a-lifetime opportunity.
TVC:DXY
by Michael_Wang_Official
21
short the vix via VXX, buy puts or sell callsAs uncertainty leaves the market, the Vix should stabilize. I would buy a long put or sell a long call, as it could take a while for it to check down to the lower trend line. Keep in mind, there is always the possibility of a catastrophic or unforeseen event that could send it through the roof so don't risk too much. Always keep your side bets to less than 5% of your overall account value, 10% at the most for extremely high conviction plays. VXX is the perfect way to play volatility. For instance, if you expect a period of heightened uncertainty and volatile days where the market is churning, you could buy some VXX as short-term protection against high volume sell-off days.
CBOE:VXXShort
by EBITDAtiger
DXY Supercycle analysis. Are YOU hedging vs.declining dollar? Dollar rebounded off 89.56ish and rallied hard today. If it breaks below 89 we will see a plummet to the mid to low 88, I believe. I think 2018 is a good benchmark for current DXY behavior, and what to look for in the oncoming weeks. But what's concerning, in regards to the dollar's current trend, is the length/duration of 2018 decline is shorter than current downtrend, before price recovered. As you can see in the DXY chart provided, length/duration of current dollar downtrend has superseded 2018's by 30 days...And counting. If you haven't adjusted your portfolio with an inflation hedge by now, here's some compelling evidence that you may want to. Good luck m8s and may the odds forever be in your favor. P.S. First post, so constructive criticism is welcome. Please and thank you.
TVC:DXYShort
by differenthax
Dec Hedge: VXX Puts - 18 Dec expiryDecember's Hedge Trade This trade hedges OLLI my secondary trade which is riskier as it was strategically structured to be the opposite of the border market movement. Hence if OLLI surges this should mitigate the loss. It is 15% ($827.42 with comms) of the premium from Dec's Primary and Secondary trade. If things go well I should not need to cash this at all. Bought 95 Puts @ 0.08, Strike 14 It requires an est -26% drop to reach the strike
CBOE:VXXShort
by Ronin_trader
Rotation hedge with Energy ETFOk boyz, so you guys are strong believer in momentum, you've ran your backtests on US Sectors and fund out that with a roughly 55% probability the best performers of last year will be the best performers of the next year. So you are still long tech like crazy and believe the FAANG stocks will keep rising. However what does financial professionals like to do? They hedge part of their risk, they maximize their sharp ratio by minimizing volatility with diversification in uncorrelated assets. What is your biggest risk right now? With a new vaccine on the way? => A big rotation of smart money from leaders (tech, healthcare) to laggards (Energy, Financials, Transportation, REITS). It's already happening right now. XLE US is down 45% year to date, it is the ultimate laggard ! And you know what? Historical probability of worst laggard to move to the top five leaders of next year is 65%, odds are in our favor. The ETF showed strong momentum last week with a nice weekly hammer candlestick with strong volume, this is a bullish reversion pattern. Let's wait for confirmation on Monday's open, if it confirms, we are catching the first wave to a nice ride up ! up to recovery and post covid world. The vaccine wont be massively available and massively distributed before mid 2021 I believe, HOWEVER the stock market is merely the second order of the real economy, not the first order! It is the acceleration of the economy, so as soon as the vaccine is being shoot the first person, the widespread reopening will increase tremendously. Option 101 => acceleration = second order = GAMMA, we want to be long gamma right now => buy calls 3 months on XLE. To save some carry cost, i would suggest a strike at 110% of the current spot, this translate to a roughly 35% Delta. This is quite out of the money but i believe the volatility on this sector is going to up with the spot. my pick : call 31Mar2021 strike 37. Delta = 24%, Remember: this strategy makes sense if your portfolio is globally long tech, and please do not risk more than 5% of your portfolio value with the premium. This is not WSB :D
AMEX:XLELong
by MarketHitchhiker
Bitcoin - Is it a good time to buy now?The crypto market has recently been talked about as a potential inflation hedge asset aside from the commonly accepted asset such as gold. Several banks and payment gateways are starting to open to the crypto market too. While I will be interested to acquire some bitcoin myself, now may not be the best timing. Should price retrace back lower potentially towards 10405 area, I'll be seriously looking to get in as a long term investment idea. Disclaimer - This analysis alone DOES NOT warrant a buy or sell trade immediately. Before you enter any trade in the financial market, it is very important that you have a proper trading plan and risk management approach. The sharing of this idea is neither necessarily indicative of nor a guarantee of future performance or success.
CME:BTC1!Long
by KarYong
my hedged trade on FacebookHi everyone, This is another trade taken today: Long Facebook vs Short JC DECAUX. Facebook has lost about 20% from its august top. Fundamentals are still strong (ROE, revenues, margin, cash flow), the management is strong as well. I choose to hedge it with JC DECAUX, traditional advertising industry, with weakening fundamentals (debt and cash flow are bad), Moody's outlook is negative, and the management is not that good (actually they are the heirs of the founder, compare with Facebook that is run by its founder...). This is implemented with barrier options maturing in 90 days. Comments are welcome!
NASDAQ:METALong
by fb_fabien
SIlver - ShortOANDA:XAGUSD As per the previous analysis, I am looking to play this down, SO if I am looking to play an overall swing down, and theres a 600+pip gap to where I would look for sells, taking the long hedge position makes sense! So played this really nice order trade 3.3% move up, to now anchor me if I want to look at sells. If I now take sells, but we keep pushing up, then I am covered as I will still hold longs from the bottom so I have zero risk to my capital! If you are ever looking for big moves but want to see it reach your target entry first, hedge that position, anything can happen at anytime, expose yourself to whatever the market wants to do!
OANDA:XAGUSDLong
by AaronSLuce