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/biz/ - Business & Finance

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21411187 No.21411187 [Reply] [Original]

The Dow should not be 27,900 right now, that's insane. It's going to crash within the next 6 months, I predict it will be around 20,000, or less, in January '21. How do I bet against the market on Robinhood and what kind of return can I expect if I bet 30k?

>> No.21411231

>>21411187
Make calls on the s&p

>> No.21411347

January $270 DIA puts are about $2,200 apiece. Buy 13 of 'em.

>> No.21411878
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21411878

>>21411231
>>21411347
thanks, I just loaded the app today. Could you explain how this is done and the risk/reward if the market does or doesn't go down much

>> No.21412349

>>21411878
>>21411878
If you buy options and they don't make it to the strike price by the date you choose they will expire worthless. You should read up on options before you invest.

>> No.21412376

>>21411347
Imagine shorting DIA the literal best oracle play in this entire market

>> No.21412455
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21412455

>>21412349
so, I could lose everything, all 30k, if the market stays about the same?

>> No.21412498

>>21411878
DIA is the ticker for the Dow Jones ETF.

Then 'DIA Options', then 'Put' and adjust the date. The further away you go, the more expensive it'll be. Go at least until January.

DIA has strike prices that are, say, $275. That equates roughly to the DOW index of 27500.

Pick an option that's close to the money. The $275's have a $.42 delta, so a rough gauge is that for every $1 the DIA price drops, each contract will gain roughly $42. If you bought 100 contracts, a $1 move in the price of the underlying would net you $4200.

The delta will change though, dependent on how near you are to the strike date and how far into or out the money you are.

Make sense?

>> No.21412755
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21412755

>>21412498
thanks bro, it is starting to make sense. do you guys think this would be a smart move?

>> No.21413029

>>21411187
>The Dow should not be 27,900 right now
ahahahahaaha

>telling the market that it's wrong, as if there's a right
>fighting the fed

>> No.21413124

>>21412755
I'm not a financial advisor, which is why I'm suggesting to stay as close to the money as possible and giving yourself a few months at least. Especially if you're playing it that big.

If you play the strike too near-dated, contractual decay becomes a thing and if the market continues to crawl sideways you'll see yourself starting to take a loss. The longer that happens, the bigger a move you need to climb out.

So...further out and nearest to the money is how I'd play it.

>> No.21413530
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21413530

>>21413124
thanks, I might go much smaller, but need to do some research, appreciate the info

>> No.21413639

>>21412455
Yes, in fact you will. Think of it kind of like a bet, you bet $ one team wins the game, you lose it if they don't win
It is possible to sell them early though, so if the market moves like you think and you are up you can always cash out, or cut losses, depending