Kid Dynamite

Kid Dynamite
Contributor since: 2009
"Goldfish be like, "my max loss in either of the strategies is about $750 bucks". Goldfish wants more downside protection for the same cost. "
but no - it's not... that's exactly the point... max loss in the synthetic is $750 + $1000 from being short the stock from now until your call hedge kicks in.
i think there's something wrong with your PnL hockey stick diagram, no?
if you're short 200 SPY here, hedged with long 210 calls (And short the downside single put), you're losing (at a double slope) between here and $210... With the plain long put strategy, our PnL hockey stick is flat if the market rallies from here: we're only out our put premium spent.
In your synthetic strategy, you lose more when the market rallies...
"If you sell that OTM put and buy that ATM call and stocks tank hard then mark to market will blow up in your face."
how so? you're also short 200 shares... the short put delta is never going to "outrun" that hedge delta! ??
question for Whitney Tilson: I presume that you bought items from Wayfair that were shipped to your NY office, right? Are those items subject to CARB2 restrictions? Under what jurisdiction?
We buy products every day that have warnings on them that they contain products that are known to be carcinogens by the state of California - but we're not buying them in California, so it's not illegal.
it's so much worse than you think, James, as Avery's core base for his entire lunatic conspiracy rant is based on multiple misunderstanding on how the COMEX delivery process works. Amazingly, with almost 50 comments so far, his poor readers have no idea either, and think this is a "good" post! Shocking. sad. That's the state of precious metals blogging for you...
Deliveries aren't made on some allocation basis in proportion to % of open interest: they're made at the choice of the shorts anytime during the delivery month. When Avery writes:
"COMEX rules require that deliveries be assigned in proportion to the number of shorts a particular clearing member has open, for itself and its customers, as of the day the futures contracts mature. If the clearing member is delivering on behalf of a client, the gold is listed on the delivery report as having come from the member's "customer account." Even if JPM is engaged in proprietary trading and market-making at COMEX, it is virtually impossible for it to have ended up assigned to almost half of all deliveries."
he is blatantly illustrating that he has no idea what he is talking about. As you wrote in your comment: this is fact - not something that can be debated. Avery simply doesn't understand how it works, so he goes off on a ghost story, complete with quotes from generations past, of course..
It will come as a surprise to exactly no one who understands how the COMEX actually operates in the real world - not the goldbug fantasy world - that shorts who needed to make deliveries transferred gold from eligible to registered and did so. It's how the COMEX operates.
your information is patently false. You cannot lie to the readers here and then tell them that they haven't done the research. you are making up numbers.
here's a link to the 10q with the accurate information:
and VRNG's company presentation with the same:
that is patently false. try 115MM.
cite your source for 160mm-178mm...
Kevin - aren't the NOLs small? from the most recent 10q:
"As of December 31, 2012, we had approximately $55,000,000 in aggregate total net tax loss carryforwards ("NOL") for U.S. federal state and local purposes expiring 20 years from the respective tax years to which they relate (beginning with 2006 for the Legal Parent and 2011 for I/P). The Tax Reform Act of 1986 imposed substantial restrictions on the utilization of NOL and tax credits in the event of an ownership change of a corporation. Thus, in accordance with Internal Revenue Code, Section 382, our initial public offering, financing activities, as well as the Merger, has significantly limited our ability to utilize such NOL’s and credit carryforwards."
"The deferred tax asset in respect of the remaining tax loss carryforwards has been offset by a valuation allowance as in our opinion it is more likely than not that the tax loss carryforwards will not be utilized in the foreseeable future."
Alan, this is the half-a-billion dollar question: DOES the jury's award bear on future royalties.
ie, will the Judge extrapolate a royalty base that the Jury used, as Dan surmised above, or will the judge be anchored toward the 20.9% number argued at trial.
I don't know the answer, but I'd love to hear insights on it...
Marc_BC - not every rational person who uses their brain is me -but thanks for the compliment.
Milwaukee - SLV accepts only London Good Delivery Bars - which is the standard for global silver. You can't just take bars from your basement and deliver them to SLV - they're not London Good Delivery.
PSLV does the same thing by the way - London Good Delivery Bars -
but in any case, I think that PEhlrich's reply to you below is spot on.
Do you think that PSLV is a fraud too, just out of curiosity? because their prospectus has the same stuff in it. It's all standard.
Milwaukee - of course I've read that piece from Jeff. He doesn't seem to understand how asset trading works. he writes:
"Anyone can walk up to these bullion banks, at any time, hand them the prevailing “spot” price, and buy your silver ETF."
huh? sure - anyone can buy my ETF - at the price I'm willing to sell it to them - which is up to me...
100%. read the prospectus.
but what's especially terrifying is that all it takes is for one person to write "BLYTHE IS PAYING 50% CASH PREMIUMS" and boom - it's accepted as fact, quoted by all the other silver bloggers who have no idea what they are talking about, and reinforced...
Streetmoney, it's not surprising that you don't understand COMEX delivery procedures. The shorts have until the end of the month to deliver - that's how it works. Expiration is at the END of the month. the Shorts decide when to make delivery within that time period.
It's clear from the way you quote SLV's change in inventory that you're a Harvey Organ disciple. Surely you understand that there are no cash settlements, right? That's another pipe dream made up by people who don't understand futures trading. See, the March future still trades. This gives traders a chance to close out their positions before expiration. Which is what happens every day, a little bit. Harvey doesn't understand that very simple concept, and makes up the RIDICULOUS assertion that JPM is paying off longs with huge cash premiums... ummm .yeah - right - because that makes sense - they'd pay $50 per ounce to close out a short when they can buy it back on the Comex for $35... right... THE CONTRACT STILL TRADES! get it?
There's plenty of silver out there. If you read my article, you'd understand that. And oh - SLV doesn't acquire and ship any silver - but surely you understand that, right? The APs bring it to them.
they largely do not ship any silver at all. They move it from YOUR pile in the vault to SLV's pile in the vault. Tom Lydon explained this today:
donald, I explained that in my recent post:
Sprott designed his purchase to take 10 weeks. he bought FORWARDS... then he trumpeted how long it was taking, yet that's how he designed it!
Dallas -
I stopped publishing my articles on SA because I decided that monkeys like you weren't worth trying to educate.
I just wrote a monumental post about PSLV -
but it's REALITY based - you probably wouldn't enjoy it. carry on.
to clarify, I queried Amazon support - not Samsung. Amazon is the one who needs to push out the apps on the devices - not the device makers. It's frustrating that they haven't already and have no plans to.
As for TV - NFLX has a terrific TV library - and I think that is a fantastic draw for them - old seasons of stuff like The Wire, Dexter, Breaking Bad... I might subscribe to NFLX just for that! It's not about Mash and Cheers - I agree about that. But Amazon has garbage - Primeval? Doctor Who? Come on...
first off, I have no positions in AMZN or NFLX. I am a Prime member, and I love I do not have a NFLX subscription.
I think that AMZN is not a near term NFLX killer here because they have a TON of work to do. They certainly can become a NFLX competitor in this space, but there are two huge issues.
1) content, obviously. Amazon's TV offerings are, quite literally, embarrassing.
2) access - this is equally important. In the post, you wrote "Amazon can and will get on devices very quickly and one has to remember that Amazon is not starting from scratch." Are you sure about that? Because I'm frustrated that I can't stream Amazon to my Samsung BD-c6500 blu-ray that I bought recently. I sent them an email, and they told me that they have no plans to add such functionality to mine or other devices! Hopefully they wake up and get their apps going - there's no reason they shouldn't be on every device like NFLX is.
Access and content - two huge hurdles - THEN Amazon can be a NFLX-killer
what I am saying is that EGPT is pricing in MORE than a 30% increase in the egyptian stocks when they open. it's closer to 50%. I won't be able to bang out that article tonight, by the way - not that you were waiting for it ;-)
Ron - no - that's not what I'm saying. If you look at EGPT's portfolio, the 4 largest positions are already "actively" marked - they trade in London/Canada. I am going to write a post on my blog ( later tonight detailing the math, but I'm sure you'll be able to figure it out. Basically, the "static" portion of the portfolio is even smaller than you calculated it as, so it needs to rally even more than you calculated.
hey Ron, fyi, the 30% number is not accurate, because there are a number of fund holdings which have already been remarked, including most of the largest ones. In other words, the "Static" marks apply to an even smaller percentage of the portfolio.
my bad on the volume.
yes - but we also know that the "creator" couldn't have sold out (hedged) of his whole position - there wasn't enough volume traded! I guess it could have gone the other way, right? EGPT could have sold off, and the Fund would have been better off holding uninvested cash...
The way it was done was the best way for the trader to bet on an EGPT recovery though.
it's a slam dunk trade, obviously, if you can create at $15.90 or so NAV and short stock (EGPT - which is still trading) to hedge at $16+... Of course, the amount created via the cash creation was equal to the total existing share at that time, so there's no way the creator was perfectly hedged, but it still seems like they got a pretty good look...
Ron - do you have any idea what price the cash creations were done at? and where the indicative value was at the time (and the closing prices also?)
knowing that would allow us to figure out if Van Eck really screwed up. in other words, if the creations were done based on an indicative value of $17, and the cash is re-invested based on an NAV of $19, that value was "diluted" from the existing shareholders to the new shareholders. The cash buyers "stole" NAV from the existing holders - unless their creation price gets adjusted based on the actual deployment of the cash??
Andy, believe me, I have better things to do that argue with SA commenters for arguments sake. You, however, seem to be a competent writer, and you stated something emphatically which is incorrect. Thus, I took the time to correct you.
The main difference is that back in the old NYSE specialist system, the specialist saw and controlled every share of stock that traded at his post. He also knew of interested parties who weren't standing in the crowd at the moment, and might be called when a sizable sell order came in. I'm guessing that you've never been to the floor of the NYSE (and it wouldn't do much good to go now - it's totally different now) - but when a specialist knows who the sellers are (and what they've been doing), it has a HUGE effect on the liquidity that he can provide.
Contrast that to a NASDAQ market maker who is just looking at numbers on a screen - he has no idea who just hit his bid. By the time the trade is happening, it's too late already.
You have Trader43 here trying to tell you how the real world is, and me as well - two people who actually know what they are talking about from experience - but if you want to get your education from Investopedia, well, good luck, sir.
It's somewhat of a moot point, because the old specialist system doesn't exist anymore - but if you'd ever been on the floor (NYSE) and actually seen a verbal auction market in action, you'd understand how different it is from NASDAQ's electronic market making.
Personally, I think NASDAQ's system is more democratized, and was inevitable given technology, but there are a few tradeoffs - like the lack of a central "supervisor" which was the role of the specialist. That's not to say that stocks couldn't crash under the specialist system - in fact, I've argued the opposite many times while advocating electronic trading - rather, only to say that the specialist had the ability to slow things down in times of stress in the market in an attempt to attract liquidity.
so anyway, in the market maker system, if someone just comes in and whacks bids for millions of shares, the trades happen instantly, and depend on the existing order book . In the specialist system, the specialist might tell the trader at his post, "I have no bids - If you want to sell 15mm shares right now, it will be down $8 - give me 45 seconds to contact a buyer who was around earlier."
Andy, this statement "There are NASDAQ market makers which serve the EXACT same function as specialists" is absolutely not correct. The NASDAQ market making system is fundamentally different from what used to exist on the NYSE with a verbally negotiated auction market, presided over by specialists.
Sure - i guess that's one way of putting it - #3 is unlikely because it's illegal and it would ensure that no one would ever do biz with them again - it doesn't help them survive in that sense - that's what I meant. They'd go running to the Fed or change the rules or do something else first - not raid the vaults - in my opinion.
as for metals going through the roof - look, we have seen silver go "through the roof" before, and gold too, without hyperinflation or the USD disappearing.
and my point is that there are two separate issues which you are conflating. that's it! If and when the Metals-pocalypse comes, and JPM finds themselves needing physical, there are a number of things that can happen. 1) they might change the rules and settle in fiat, 2) they might buy the physical that they need and drive the price up, but I think the scenario that you're trying to get to: 3) they steal the silver that they need - is not plausible.
i don't know what your definition of currency collapse is. I do not think we will see hyperinflation in the USD, I do not think that the dollar will disappear, and I do not think that JPM will steal the bullion from the ETF vaults.
i doubt that the physical shortages are as severe as the metal heads think they are, but that doesn't mean that the prices can't go higher. The Fed is trying to reflate all assets (they've mostly done it already, in fact) and I don't see them being able to drastically revert their policies, because contrary to their trumpeting "improvement" i don't think we've solved the problems- I think you agree.
I think the end result of where you're going, if these mismatches (in physical silver obligations) exist (and they may exist - mismatches in delivery timeframe of physical silver, without exposure to the spot price of silver), is a squeeze in the price of the metals - not the stealing of the metals from the vaults of the ETFs. I don't know how else to say it!