Sigma Labs, Inc. Message Board

Who can guess at this point, but that seems logical. Yesterday baffled and confused me. Most people don't realize that the market started tanking exactly one hour before the fed minutes were released.

Here it is as a quote:
"The investment seeks daily investment results, before fees and expenses, of 300% of the inverse (or opposite) of the performance of the Russell 1000® Financial Services Index. "

I posted an analysis earlier which proved that you should never go long FAZ or FAS. Rather, if you think the market will go up you should short or buy put options on FAZ. If you think the market will go down, you should short or buy put options on FAS.

Due to the structure of ETF's, and the fact that they incur trading costs, margin costs, fund management fees, and - in the case of FAZ - dividend payments, their nature is to go down. If the market goes up by 1%, FAZ will decrease by MORE than 3%. If the market goes up by 1%, FAZ does not increase by 1%. The same is true of FAS for the opposite scenario.

You can verify this for yourself in Yahoo's description. The fund has a stated goal of achieving -300% returns on a portfolio of russell 1000 financial stocks - BEFORE costs.

That seems very far fetched to me, the amount of shares Ackman needs to dump far outweighs any benefits you can get from the Yahoo boards!!

I would imagine that they are cautious longs, who got in AFTER january. Every article you read says "sit this one out, let the big boys battle you can't predict where this is going!"

Also, that Ackman refuses to sell anyways.

Personally I think he's going to get squeezed and this will go above $80. And it MIGHT do it rather quickly. We'll see.

I did a straddle of about 3:1 puts to calls, at $46 and $51 on wednesday last week. I could have gotten out on thursday or friday morning at a large profit, but didn't, and lost my total bet.

This was just for a small amount of money however :P And my long time holdings of DDD, which I sold for $44 recently, have made me quite a bit of money :P

Generally I will stay away from options if I am predicting short term movements. I don't think you can make an accurate prediction as to where DDD will be in 1 month. One or two days is MUCH easier. So is 6 months. (The direction will be up).

So, having said that, I wouldn't go ahead and make an options bet for something 1 month out of the money. The only reason why I played options last week on DDD was because of options expiry, and given the recent large volatility, I did not feel that the price of options accurately reflected the correct volatility premium that should be paid. In other words, very short term options on DDD (

I was wrong about the closing price, but right on every other prediction I made on DDD last week. I predicted a violent explosion downwards on friday. This happened. I also predicted it would touch $44 on thursday, which it did. And today is exactly what I had in mind. A run up to between 46.70 and 51 levels. $48.40 is pretty bang on if you ask me.

LOL yeah me too :P

The big dip near the end of the day is exactly what I was expecting but I was expecting it to continue downwards until close. The fact that it rebounded back to the resistance at the 46.70 level by EOD was incredibly bullish.

So my prediction for next week is definitely up. But I think one of two things can happen. We stabilize in this area between 46.70 and 51, or it overshoots to the high 50's, in which case we will see another pullback to around this region.

I highly doubt however that there is much downside potential, at least in the short term, below current levels.

Yes... I am thinking we will see a close of around $45 today... violent explosion downwards.

What are your thoughts? It could explode up as well but I doubt it....

pin at $900.

Honestly I think the only good advice on here was given by greymattermatters.

The other thing you can do is sell it all. Right now. You've made 7.5x your initial investment in 9 years. What will happen in the next 9 years if you hold?

I highly doubt you will see 750% gains here. So my advice is this. Sell now, and go diversify. Go and find stocks you think might be 750% winners. Check out ONVO, TSLA, etc....

Because of trading costs, fund management fees, paying out dividends (for FAZ), interest on leverage, and shorting costs.

FAZ will drop more than FAS rises when the market goes up and vice versa.

Because of trading costs, fund management fees, paying out dividends (for FAZ), interest on leverage, and shorting costs.

FAZ will drop more than FAS rises when the market goes up and vice versa.

Not every brokerage will allow you to short it. If you can short it, you can only short 1:1 because of SEC regulations on margining leveraged ETFs. The margin must be equal to the leverage is my understanding, so for my account I can margin 2:1, so I can only short this puppy 1:1.

Just get puts.

LOL yeah I wish I discovered this ETF 5 years ago. Of course, wouldn't have been able to understand exactly what it was back then... but I mean, even a year or two ago? The way this fund works is so obvious. There is no benefit to ever OWN FAZ or FAS. Whatever direction you think the market is heading, short the corresponding one. Or buy puts. I just hope FAZ and FAS continue the way they are operating for years to come. I will be a multi-millionaire within the year.

I mean..... FAZ will be super winner for sure tomorrow, black thursday for certain guaranteed!

You can't short FAZ on margin anywhere as per SEC regulations because it is already a 3x leveraged stock. Well, IB lets me margin it at like 1.1:1 or something marginal like that lol but that doesn't count.

So realistically if you're looking for big gains on FAZ the best way to play it is just to buy options. If you're looking to simulate an actual short position on margin, then look at in the money LEAPS around the $40 mark. Pretty safe bet there if you ask me.

I decided to go ahead and just pull the trigger on the straddle at $50. Didn't get the price I wanted, 95 cents per call.

My position is 3:1 puts to calls however. So in the $53 range I break even. In the $44 range I make so much I don't care. Well, I make so much, I don't care either way, but I think this one is going to work out one way or the other lol,.

Yes, I'm serious. I loaded up on more $46 put options with May expiration. So you know I'm putting my money where my mouth is on this one. DDD has a very violent and volatile history. When it fails to make higher highs, it is punished. When I saw yesterday's sell off, I bought $46 puts. When I saw it bounce of $50 5 times this morning, I tripled my stake in $46 puts.

Obviously I'm not a fortune teller, but I just feel the risk/reward is quite worth it. It is not showing bearish signs per-say, but rather over-exhaustion. And the likelihood of seeing sub $44 levels today, tomorrow, and/or Friday is a great reward considering you can nab these puts now for $0.50 each.

I'm a long time DDD bull and I think it will do well, but I've just seen so many violent downward movements for relatively little to no reason. It is in a phase right now where it is looking for a fair value and/or direction, but it can't find it. It is moving way too much, up and down. So by that logic, we very well might see $54 by Friday as well. I considered grabbing $50 or $51 calls as well to form a straddle, but I am just simply leaning to the downside on this one today.

Either way, I think the options are underpriced relative to the movement potential DDD will have in the next few days.