I’d let the position be called away if it kept rallying.
Someone paid time value plus a a premium for how wild the stock has been this year so the option was reflecting a lot of that.
Goldman; S&P500 -10% over next three months. Exactly what I’ve bet on, although I would add Trump-risk to this…
“We think this reversal in positioning increases the likelihood of an equity pullback given that our fundamental view has not changed: valuations still appear high and we still expect poor earnings growth across regions,” they conclude. “Until the growth situation improves, we are not that constructive on equities, particularly after this type of rally and amid continuing concerns about the sustainability of stimulus led growth in China, global policy uncertainty (and in Europe in particular), dovish central bank expectations, and heightened prospects of unknown shocks (e.g. Turkey recently).”
FINALLY… ES is looking interesting. If we break 2140 and hold it, party is on. If I did not already have my short position, that is when I would do it. You must be enjoying this PA.
^ Yeah, finally a pullback, just hit a new portfolio value high. Dreaming of a market crash…
I’m with this guy…although I’m short futures and holding 2018 puts.
George Soros has become more bearish on equity markets, nearly doubling his short bet against the S&P 500 , following similar moves by Jeffrey Gundlach, Carl Icahn and David Tepper. According to his 13F filing, Soros now holds put options on roughly 4M shares in SPY.
This reminds me a lot of 2006 up until the summer of 2007 where the SPY just ground towards new all-time-highs.
Interesting thread! Thanks for sharing 
Oh, are the bulls finally starting to get nervous? Sept is usually a bad month, plus Yellen-risk, Trump-risk, etc. We’ve got to have some dip by Dec FOMC meeting, I would think? Another rate-shock like last Dec would be wonderful for us shorts.
Indeed, I have been tracking ES lately and using it as one of my learning tools. You can see the confidence slowly waning even after the recent double high around 2190. The price levels attracting most of the trading volume are coming down. I’m keeping an eye on the 2155 level. That may make a good short. If it rejects, you could have quick confirmation you are wrong so a nice tight stop. If it holds, I see it going down to test 2140. That right there is a nice 15 points so great risk/ reward already. The bonus would be breaking 2140, which would really indicate a great loss of confidence and much more downside. At this point I’m probably not actually going to take this trade. I’m more curious to see if it plays out this way or not. Strong jobs report Friday could set it in action.
This Hedge Fund Made 2,100% From World’s Most Extreme Market Mania
For you, PA…
Die, ES, DIE… happy Friday everyone
yawn
Finally. Biggest out-performance day in years; PA +3.3%, S&P -2.5%.
Thought about closing some of my 200% short out, but decided to sit and wait, I want that rate hike, and at least some Trump fear.
Well, I like what I’m seeing…
We now start Q4 and I’m still 150% short using ES futures; market is clearly nervous, Trump-risk, Yellen-risk, Deutsche-risk, Brexit-risk, etc. Any event (DB) could combine with other events (Trump), and snowball into global recession. Markets are pumped, just need the pin that pops the bubble. Very high probability of having another pull-back like we did the same time last year.
Chaos
This was all very good. The obvious move, that everyone avoids, simply short the S&P500 at crazy highs, or buy cheap puts. And you do that before the event, not expecting you will magically be able to sneak it in after. So now they are not hedged, and instead playing around with the peso?
Investors are expecting a degree of volatility around the event, but they aren’t sufficiently hedging the outcome of the U.S. election, says Citigroup Inc. Head FX Strategist Steven Englander. In a recent note, he observes that “investors will be surprised at how fast and far asset markets move on the news of a Trump or Clinton victory, and how little chance they have to profit from the news.”
While emerging-market assets might bear the immediate brunt of a Trump victory, according to market participants surveyed by Citigroup, investors aren’t adequately hedging U.S. election risk, says Englander.
He says that muted investor positioning for event risks — from Brexit, the U.S. election, and other geo-political events, more generally — might be due to the fact investors are reluctant to “pay a premium in a year when returns are modest,” and also the hope that they will be able to position themselves properly after a given event. “Because of this reluctance to pre-position implied volatility in FX, emerging markets and rates looks to be very low relative to the underlying risk,” he notes.
Investor complacency could be setting markets up for a volatile sell-off in the aftermath of a risk event such as the U.S. election when everyone moves at once, he concludes. “If everyone is positioning to pull the trigger on positioning as soon as they know the outcome, the repressed volatility may emerge in a very sharp burst,” he points out. “The outcome would likely be that prices move much more quickly than expected with much less opportunity to get the position on than investors would like and some possibility that one-way markets lead to overshooting.”
Muted investor positioning for risk events might be because there’s little clarity on how to trade the risks of a U.S. election, aside from popular calls on the Mexican peso.
Ohhhh yeahhh baby, now the Q4 bloodbath begins? Weird how it triggers now. I was thinking the other day “with Trump gone, now Yellen can hike”, but the market is pricing this unusually early? Or maybe it’s the GBP spook (flash crash), they finally realize Brexit is real?
New portfolio high, up 3.8% for the month, roughly 21.5% YTD. Been unwinding some of these derivatives, no need to get too greedy.
Indeed, from a technical standpoint and from the way I analyze things, ES does in fact look like sh*t. 
Watch for that 2135 level to hold tomorrow.
Suddenly everyone wants my puts. 
[please forum owner, we need a better cool icon, that is nerd, definitely not cool]
October performance +6.0% vs -2.0% global equities, 8.0% MTD outperformance!
Closing out some of these shorts at cost, going to ditch the net-short position, and move to 75% hedged. It’s been 5 months of covered put selling for massive gains, no need to be greedy.
I think Clinton takes it, and we see a rally…before a big pullback in December with Yellen. So maybe see how the election goes, and reestablish shorts at a higher cost if the Nov rally goes too far.
There’s our Clinton win rally, or at least partly priced in now, SPX +2.2%. Anything above 2150 and I’ll start selling naked calls, and shorting the sh!t out of it again. Yellen coming in December, she no longer has to protect Obummer’s legacy.