Bottom is in? Anatomy of a Key Reversal Day

[Jimbo]

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Jimbo - Find the knob on your sarcasm meter and turn that puppy up. I'm pretty sure he's basically saying put your money where your mouth is.

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I've already stated elswhere that all my positions are currently long so I do have a financial investment. What I don't get is why I should take his advice with an instrument I know little about. Now if he were some famous financial guru I might do some homework, as it is I'll just ignore his dubious suggestions in the future.

Jimbo

[Tweety]

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INHO there is less than a .1% chance the DOW will drop below 10,000 within a year. Perhaps I am way off base but I don't see how anyone can make that prediction and believe it.


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Well, if you're so sure, are you massively short DJX puts, prices for which don't come close to agreeing with your view? I see a 3.10 bid for Dec 08 100 put - even if you're just 99% sure, instead of 99.9% sure, this is practically free money.

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Yeah, ask all the Index Shorters how they liked waking up this morning?

May I reasonably assume you are another DOW below 10,000 within a year doom and gloomer ? Good luck with that, we are both able to make a profit in a fluctuating market. If the DOW drops to below 10K too quickly there will be other catastrophic reasons behind the slide which will overshadow any concern I might have about losing money.

Jimbo

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Not at all, just trying to help you make money [img]/images/graemlins/smile.gif[/img] It seems odd to me that you believe that these puts are overvalued by several orders of magnitude and you don't care to want to profit from this.

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Selling the dow 10k put at 3.10, even if he thinks the option is a bit overvalued, is akin to jumping down into the subway tracks to pick up a quarter.