tag:blogger.com,1999:blog-8261438457608174618.post7713915449317533118..comments2023-05-12T16:41:08.754+08:00Comments on Forecast Error: Euro Crisis Round 2CCLuhttp://www.blogger.com/profile/08569770663341206042noreply@blogger.comBlogger8125tag:blogger.com,1999:blog-8261438457608174618.post-1496068346059869682012-04-23T22:42:11.923+08:002012-04-23T22:42:11.923+08:00To Ben,
Send me an e-mail to
cl458@hotmail.com
...To Ben,<br /><br />Send me an e-mail to <br /><br />cl458@hotmail.com<br /><br />and give me an e-mail address I can use to contact you. I'll give you my normal e-mail address.<br /><br />I didn't know Fulbright has a grant like that. It's a two-way street! I thought it's only for foreign scholars to do research in the U.S.. My girlfriend got it last year and spent half a year in her alma mater (PSU).CCLuhttps://www.blogger.com/profile/08569770663341206042noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-23857757787688497212012-04-23T05:30:09.299+08:002012-04-23T05:30:09.299+08:00>>I never got how to determine the proper wi...>>I never got how to determine the proper width of the Iron Condor's body. Do you think the volatility will be limited?<<<br /><br />Bingo! You got to the heart of the Iron Condor strategy. I, too, struggle with the very same issue whenever I deploy iron condor. To me, options are probably more art than science. I can't remember the last time that I used Black-Sholes to determine the fair value of any option.<br /><br />Regarding volatility, I think that VIX may be one of the more misunderstood indexes out there today, which create opportunities for better-informed and better-prepared traders/investors. I am sorry but I can't share too much of my volatility thesis at this time because I am still building my positions and don't want to disclose too much info. Some of the products that I am looking at are thinly traded, even for a small guy like me. However, I do think that volatility will pick up in the next few months, but when and how much? That's what I am trying to figure out right now.<br /><br />My European endgame view is largely in agreement with yours. Not a whole lot of surprises in the French election today, other than Le Pen's strong showing. Perhaps it will be Germany who will leave the EMU first....<br /><br />Last but certainly not the least, my wife, who is a college professor, was awarded and had just accepted a Fulbright scholarship grant to spend 11 months in Taiwan in 2012-2013. I am still undecided on how much time I will spend in Taiwan with her but I will most certainly be visiting Taiwan again. If you are up for it, CCLu, I would like to buy you a drink and to thank you in person for this wonderful blog that you have created. Please let me know the best way for me to get in contact with you when I am in Taiwan.Benhttps://www.blogger.com/profile/00740609394472273217noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-8799383128650770882012-04-23T02:22:14.589+08:002012-04-23T02:22:14.589+08:00Buy VIX related ETFs or inverse ETFs if you are no...Buy VIX related ETFs or inverse ETFs if you are not confident of playing options.Mobihttps://www.blogger.com/profile/04686604264261718902noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-46876136908764909972012-04-22T01:30:24.236+08:002012-04-22T01:30:24.236+08:00To Ben,
I have to admit that I'm not good at ...To Ben,<br /><br />I have to admit that I'm not good at options. I never got how to determine the proper width of the Iron Condor's body. Do you think the volatility will be limited? It looks so but I don't know about that in the summer. If another bad news of the U.S. coming out later like the one we saw in March about employment, it could set off another wave of panic. I have to say the probability of that is slim, but economists seem to change forecasts every other month this year.<br /><br />The endgame in Europe is another interesting thing. I'll bet on the following:<br /><br />Politicians got caught in elections or the elections in nearby countries and they will think it is a good idea not to bail out foreign countries. For countries that need to be rescued, the politicians will also refuse to address how weak their countries are. After all, it's easier to attract votes with optimism than painting a picture of doomsday.<br /><br />After a stretch of denial, they will find themselves in a bigger hole than they imagine. Another round of panic meetings will take place later this year. The cost of taming the beast will be higher than otherwise, but they will no longer have a choice by then. What we saw last year with Greece will happen again for Spain, hopefully we don't need to see Italy in that situation.CCLuhttps://www.blogger.com/profile/08569770663341206042noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-58587298305141260352012-04-21T08:29:57.268+08:002012-04-21T08:29:57.268+08:00A very interesting interview with Buba's Weidm...A very interesting interview with Buba's Weidmann. How I wish that I had a time machine so that I could travel ahead and see the endgame of this EMU tragedy.<br /><br />http://www.reuters.com/article/2012/04/18/us-ecb-weidmann-idUSBRE83H0EH20120418Benhttps://www.blogger.com/profile/00740609394472273217noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-87161867679376522792012-04-20T01:00:18.810+08:002012-04-20T01:00:18.810+08:00The water is calm, CCLu, I promise:)
And release ...The water is calm, CCLu, I promise:)<br /><br />And release the Iron Condor!Benhttps://www.blogger.com/profile/00740609394472273217noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-44468917247108668892012-04-20T00:26:58.036+08:002012-04-20T00:26:58.036+08:00To Ben,
Well said. When the time is tough, lack o...To Ben,<br /><br />Well said. When the time is tough, lack of liquidity looks almost like insolvency. Sometimes it is so difficult to tell these two apart. Hank Paulson and Timothy Geithner made that mistake with AIG. They thought it was illiquid, but it was more like insolvent.<br /><br />Here we have an application to the opposite end in Europe.<br /><br />I don't have the stomach for this market. It's going to be great fun for option traders (or big pain if they bet on the wrong side), but I'd like to sit this one out.CCLuhttps://www.blogger.com/profile/08569770663341206042noreply@blogger.comtag:blogger.com,1999:blog-8261438457608174618.post-83456969438638699052012-04-20T00:10:24.575+08:002012-04-20T00:10:24.575+08:00The pain in Spain falls mainly on the lame....
Go...The pain in Spain falls mainly on the lame....<br /><br />Good post, CCLu. I think that a lot of investors are confusing liquidity with solvency. LTRO only addressed a bank's short-term liquidity issues, but not their solvency problems. And with elections in France and Greece coming up, there are plenty of "surprises" in store for the unprepared investors. The next few months should be interesting....Benhttps://www.blogger.com/profile/00740609394472273217noreply@blogger.com