Back to sleep Princess - full disclosure on @realmoney:
Sep 18, 2020 | 11:02 AM EDT DOUG KASS
Bought SPY and QQQ Puts
* Just in case!
* Watch out for the "gamma trap door" at slightly lower levels!
I am going out to lunch with some friends at noon.
But before I do I want to
emphasize that I continue to look for lower highs that could be followed by a pattern of lower lows in the averages.
I continue to see, as mentioned in my opener today, more risk in the Nasdaq relative to the S&P Index.
I have suggested that I would reshort on strength, giving
the market a wider berth. And I continue to plan to do so.
But, given my overall negative view for the balance of the year, in the event that equities move lower over the short term, I have just purchased some defined risk out of the money (SPY) and (QQQ) puts (maturities 20-30
days) to move back from a small net long exposure to small (delta adjusted) net short exposure. (This takes me to small net short. Should the market fall over the near term the puts bring me shorter and vice versa - gamma).
I may be ripping up these tickets as valueless in a few weeks but the small dollar cost, and defined risk, is acceptable to me as I look at the continued market weakness.
Finally, I would note a possible "gamma trap door" at around current levels that could hasten an imminent
market drop:
Position: Long SPY, QQQ puts, Short SPY (small), QQQ
Sep 18, 2020 | 08:30 AM EDT DOUG KASS
My Tactical Approach to the Markets
* Staying engaged, opportunistic and unemotional
I remain bearish but opportunistic and dispassionate in my trading.
I was very active yesterday.
Given the depth and speed of the declines in the S&P and Nasdaq Indices I moved from large short (SPY) and (QQQ) positions to small positions during the market's whoosh lower in the early going on Thursday. I also profitably covered my short trading
rental in Facebook (FB) .
I start the day in a small net long exposure.
But that posture will not likely last long as I plan to reshort strength if Mr. Market cooperates.
Position: Short SPY (small), QQQ (small) @threadreaderapp unroll
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