Sold $AAPL 4/17 220/210 bull put spread @ 1.83. Short puts at 22 delta.
Sold $AAPL 4/17 220/210 bull put spread @ 1.78
With the markets off another 4+% I found it interesting that the VIX was down. I remember so many days in the last few months when the opposite was true (markets up/VIX up) and it signaled caution (probably should have sold everything then right? LOL). Today, it could be a function of it having been so high previously, but what is high? We’ve never been through anything like this before. Still it’s interesting that on a day like today, you would have expected another spike in the VIX but it was actually down over 8% (albeit even quite a bit lower earlier in the day). It could be the down action is more orderly without as much panic, and could that signal we’re near some kind of low or bottom?
I also looked at how backwardation has been the last 2 weeks. Of course we’ve been deep in it for some time but the % backwardation has been trending down:
A flattening for sure, but the real important curve flattening is with new Covid-19 cases/deaths. We’re in the thick of the explosion in new cases now mostly because of the increased testing. But I remain optimistic that these extreme measures will pay off very soon in a deceleration of new cases (that would be a negative second derivative for all you calculus experts). Combine that with unprecedented speed through the normal FDA red tape to get medications to severely ill patients and we could be looking at slowing growth in cases on the front end and a reduction of fatality % on the back end. I believe we will absolutely beat this thing even though it seems overwhelming to think about. The panic and fear will hopefully abate here (I’m talking about just out there, not necessarily in the financial markets). I wish people would watch less TV and sensationalized websites/social media. It’s feeding the panic for viewers and clicks. I’m in the media business so I understand they make a lot of money during times like this but man it feels like it’s such a disservice to people to go over the top with fear tactics for ratings. Look what’s happening in Washington DC. Did you ever think that there would be so much love between Democrats and Republicans? I hardly recognize these people. For the most part everyone is working together and that’s as it should be and unimaginable even 2 months ago. And I think that has been a great thing for the country to see. But…(and it will never happen because of the nature of the beast) I also wish the media would be more responsible in their reporting and be sensitive to the fact that so many people blindly listen to what is reported and behave and act accordingly. I can’t tell you how many texts and other messages I get with the craziest things someone just “heard about”, or someone texted them a meme saying something insane. People are passing these things along without doing the simplest due diligence and it’s spreading incredible anxiety and that has made this crisis 10 times worse in my opinion.
What we’re going through is bad and difficult for sure, but it is being exacerbated by panic and fear. Let’s try to appreciate the things we do have right now and one day (hopefully sooner than we think) we’ll look back on this time in our lives and say “Can you believe what we went through?”
Peace, serenity and love to you all, my Bistro family.
Bought 4/3 70 puts @ 12.99
You may have heard about this but this drug, but there are more and more articles about its effectiveness against Covid-19. China and South Korea are using it now with great results. Combined with an antibiotic, it is reducing the sick time for those infected from a couple of weeks to a few days. It can be mass produced. Promising.
Bought 4/9 100 puts @ 25.00
Sold $DIS 4/17 90 puts @ 7.00