Patrick Ceresna spoke in the afternoon of Friday, September 20, 2019 in the Bull Pen of the Exhibit Hall. His talk was called “Discover the Strategy We’ve Used to Catch the Last Two Market Tops”. He is Founder and Chief Derivative Market Strategist of Big Picture Trading Inc. His company’s site is here.
The big picture is that there are macro cycles of Business Cycle, Debt Cycle and Market Cycle. Non are consistent in duration or magnitude. We are in the longest Business Cycle in History. The average is 11 months.
The option contracts have counterparties of buyer and seller. With rights and obligations. The Call Option is a Buyer having the right to buy and the Seller has the obligation to sell. It covers a specific time and price. A Put Option is with the Buyer having the right to sell and the Seller has the obligation is to buy at a specific time and price.
A straddle is a simultaneous call and put. You need a big move in the market for this to work. A calendar Straddle has different expirations of the call and put. It is a shorter call and a longer put. This is insurance in timing in case we have not reached the top. There is a believe that the market will decline and a believe that a large move is coming and is imminent. He believes we are at risk of this now.
We need low volatility for options are they are more expensive if there is high volatility.
On my other blog I wrote yesterday about Innergex Renewable Energy (TSX-INE, OTC-INGXF) ... learn more. Next, I will write about Crescent Point Energy Corp (TSX-CPG, NYSE-CPG) ... learn more on Friday, November 22, 2019 around 5 pm
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