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Monday, November 19, 2018

THE LESSON OF NG

“I’d say short naked NG calls going into Winter ranks right up there!”

In case you missed it over the weekend, there’s another hedge fund “blowup”,  
this time in Natural Gas options … specifically, short naked calls [most likely 
December or January expiration] … “gosh, heading into Winter, what could 
possibly go wrong with this position”? … well, apparently a lot, cuz “aaaand it’s 
gone” is the catch phrase making the rounds … directly below the link at ZH.

after-catastrophic-loss-event-natgas-short-squeeze

As I have stated many times in the past, options can be as risky as a bet on a 
roulette table, or as conservative as protecting a portfolio of the underlying, or 
anything in between … what matters is how they are used … and in this case, a 
cool 80 million is POOF! … gone with the wind … all the while, the “smartest 
people in the room” are telling anybody who will listen, that the “smart money” 
ALWAYS sells option premium, cuz time decay [theta] works in their favor 
24/7/365 … until it doesn’t … SHTF & blows up, the money is all gone, and the 
lawyers are called in … a clusterfark totally predictable.

Which is why in the C2 options advisory, we are NEVER short naked premium 
in either puts or calls … “evahhhh” … it’s the height of stupidity, cuz sooner or 
later, no matter the market, you hang around long enough, and shit blows up 
“bigly & yuge”, and most likely finds you on the opposite side of the profits 
equation. Not only is the market against you, but the gigantic blow up in 
volatility, even if you’re on the opposite side, will kill a naked short position 
“the fund’s managers should have known better, but greed steps in, and the 
call options premiums look “fat” cuz of the risks of supply shortages should there 
be an early freeze or cold snap in the midwest … hey dumbass, they’re fat for a 
reason! … it’s always the first $80 million that hurts the most”! But, let the NG 
market serve as a warning for what’s coming at some point in the future for 
gold.

Turning to today’s gold market … “seriously? … I can’t even … here we are in 
hour 18, and gold can’t even muster a $6 range, tip to tip … about $3 - $4 in New 
York, but simply a bucket of dealer shit” … Asia & Europe simply D.E.A.D., no 
movement whatsoever, outside of an occasional spike that goes nowhere … on 
the one hand, we see lower stocks, but on the other USDCNH is higher [lower 
Yuan], thus gold getting pulled in seperate directions, and can’t decide what to 
do.

One algorithm buy signal today … PAMM up a few bucks.

When it doesn’t want to go higher, this market makes it look easier to  jump 
across the Grand Canyon, than to get a 50 cent rally. In the overall scheme of 
things, though, the markets inability to break lower below 1220 is a good sign, 
but ultimately what’s going to make/break gold is the December FED meeting, 
the November 30 Trump/Xi “lovefest” at the G20, and whether or not stocks 
tank further, “bigly & yuge”. “And the feeling I get from markets across the 
spectrum, is that the FED is very close to the end of its rate hike cycle … and 
despite what dealer bullshit gets pulled day-to-day, that is highly supportive of 
gold, and for further price strength into 2019”.

Mid afternoon in New York, and can we get the ref to just blow the “Hoover 
Dam” whistle and stop this thing? … good grief, what a pile of bat guano. In 
any event, it is what it is … onto tomorrow, and hopefully we can get a bigger 
range before turkey day. Another tech support call later this afternoon, as 
another Google geek looks to solve my spreadsheet issues … I’m outta here 
… until tomorrow mi amigos … Onward & Upward!!

Have a great day everybody!!

-vegas

OUR TURNKEY FOREX “PAMM/MAM” IS OPEN AND
OPERATIONAL, AS WELL AS OUR C2 OPTIONS ADVISORY 
SERVICE.  DETAILS IN “DOWNLOAD LINKS” SECTION IN 
RIGHT HAND COLUMN. START YOUR JOURNEY FROM 
WHERE YOU ARE AT TO “ESCAPE TO SUCCESS”!




 


 

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