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My Options Overview / Guide (V2)
Greeting Theta Gang boys and girls, I hope you're well and not bankrupt after last week. I'm just now recovering mentally myself. I saw a few WSB converts and some newbies asking for tips, so here you go. V2 of my Options guide. I hope it helps. I spent a huge amount of time learning about options and tried to distill my knowledge down into a helpful guide. This should especially be useful for newbies and growing options traders. While I feel I’m a successful trader, I'm not a guru and my advice is not meant to be gospel, but this will hopefully be a good starting point, teach you a lot, and make you a better trader. I plan to keep typing up more info from my notebook, expanding this guide, and posting it every couple months. Any feedback or additions are appreciated Per requests, I added details of good and bad trades I made. Some painful lessons learned are now included. I also tried to organize this better as it got longer. Here's what I tell options beginners: I would strongly recommend buying a beginner's options book and read it cover to cover. That helped me a lot. I like this beginner book: https://www.amazon.com/dp/B00GWSXX8U/ref=cm_sw_r_cp_apa_OxNDFb2GK9YW7 Helpful websites:
Tasty Trade (TT) and Ally Invest have helpful articles and videos.
ITM: In the money; strike is below stock value. Signif
ATM: At the money; strike is just at or above the stock value, often very highly traded. Can be very effective with moderate - long term expiry.
NTM: Near the money; strike is above the stock value, but fairly close. Slightly unofficial term.
OTM: Out of the money; price is at least a few strikes from the current stock price. I would say 10-30% over stock price.
Very OTM: Not a real definition, this is essentially a lottery ticket. Cheap, but almost certain to expire worthless unless there is explosive movement.
Understand delta in general and how delta changes with ITM and OTM options.
IV, IV crush, and how IV affects pricing. In general, you want to sell when IV is high and buy when the IV is low. Increasing IV is good for held calls/puts. IV drop or crush is generally good for sellers.
Selling options can be quite beneficial. Once you have a good general understanding, lookup thetagang . Kamikaze Cash has good youtube videos on most theta strategies (linked above). I personally believe selling options (especially cash secured) is much safer and can consistently make you profits. Θ Gang 4 life.
FOMO and how to avoid chasing a dangerous trend. DO NOT CHASE FROM FOMO!
What intrinsic and extrinsic value are. Know how they are affected by being exercised/assigned and how theta affects them.
Understand that some of WSB recommendations are straight up high-risk gambling and factor in the information accordingly. Be careful with Meme stocks and the survivorship bias on YOLO plays. However, I love the sub and think it’s hilarious. It has a lot of valuable information / DD if you are comfortable with the “colorful” language. It’s also great if you like rocket ship emojis.
Basics / Mechanics
Understand the 4 "main" option types. Buying or selling a call and buying or selling a put. Spreads and more complex multi-legged option strategies are based off these in some way (see below)
You can sell calls with 100 shares of stock or if you own an underlying longer term option; see LEAPS and PMCCs later. Selling calls naked is incredibly risky and often requires Level 4 (very advanced) permissions and usually a lot of capital. I will literally never sell calls naked since I don't want to ruin my life and end up living in a dumpster eating saltine crackers.
Puts can be sold/written cash covered (cash secured), which means you have the cash in your account to buy 100 shares. Your broker will put this money on hold until the trade is closed. Puts can be sold "naked" using Margin and Level 3 (with most brokers). Your broker will hold a percentage of cost of 100 shares (often 30-40%, 100% on meme stocks) allowing you to sell more puts. This increases your available capital/power as well as increasing risk.
General Tips and Ideas:
Don't EVER leave (short) spreads open on expiration day, close them. (more details below)
Start off trading very small. Slowly build up over weeks / months. You need to get accustomed to a fifty dollar swing a day, then a few hundred, then a few thousand. You need to ensure you don't get emotional (see below). I started trading options with 5k, then 25k, 50k, and later over 100k. I added my own funds over time and used my gains to build my account. Don’t go all in immediately, that’s dangerous and unwise.
Especially as you build up the amount of money you have invested, keep it diversified among several stocks.
Don't go all in on one thing, ever. Be able to take a hit from one stock and not mortally wound your portfolio.
A company may be doing great, then there's a major product issue out of nowhere. If you are overexposed in one stock this can really hurt you.
I had to roll options I sold that were about to expire completely worthless because FDX's CEO changed and the stock took a hard dip.
Don't trade emotionally. If you realize you are emotionally trading for vengeance, you should probably exit the trade and cool off for several days with that stock. Same if you get caught up in a wave of hysteria.
Have a plan for every trade, ideally with entries / exits that are specific values, ranges, or a set condition. This helps remove emotions. This is super important for strong movements and high volatility (see later).
Use an options profit calculator from your broker or an online one before entering a "new" trade, especially a complex multi legged trade: https://www.optionsprofitcalculator.com/
“Rolling” an option: Closing your existing option and opening a similar one at different strike and/or expiration.
Rolling a call “Up” would be selling a call you own and buying a cheaper call at a higher strike.
Rolling a put “Down and out” closes your original one and buying or selling one at a lower strike at a longer expiry.
Better broker interfaces have a literal “Roll” button. I know E-trade does. You can manually do it by selecting relevant contract legs.
If you have a losing trade, re-evaluate it. If your initial assumption is definitely incorrect, close it. Don't stay in losing trades forever and lose the entire value of the option over stubbornness. If you re-evaluate and you think your assumption was right, hold, potentially consider adding another cheaper option (or buy another call / put). Rolling out sold options can help here.
Don't try to day trade, especially with options. It's statistically unlikely to be profitable. Day-trading with options introduces extra liquidity risks and is dangerous, especially with spreads.
Try not to over-trade, you'll likely mis-time the market over time. When I get emotional I over trade, then lose additional money on wash sales. If you scale your entries into positions it should help alleviate your desire to exit positions when they turn badly against you. Whenever I buy calls I do it at larger increments after W almost made me loss my hair; luckily it eventually came back.
NEVER enter a position on a stock you have no idea about, especially when you read about it online or heard about it from some rando.
At market open options contracts are often volatile and inflated. Buying during this time can be more expensive. Options are usually cheaper mid-day, I read somewhere 2-3PM is cheapest. I’ve had success around 12-1PM EST after prices settle.
Try wheeling on cheaper stocks once you get all fundamentals down.
When selling puts if you are very bullish consider "doubling down"; note this is higher risk. Use the credit from your put sale to buy shares or a cheap call. This can be roughly inversed with puts, except I wouldn't ever recommend shorting shares.
Learn from your mistakes. You can’t go back in time and beating yourself up (to a point) is useless. Make a physical &/or mental note of it so you don’t do it again. If you don’t learn from it, then beat yourself up so you won’t do it again.
If you have friends that like to trade, I find it helpful to discuss strategies and planned plays. I talk openly with my close friends about my current holdings and planned trades, it helps keep me accountable. If I get a wide-eyed look, I might be doing something excessively risky or stupid. I’ve over-leveraged myself in calls twice and I knew I shouldn’t have done it both times. When I tell my friends what I did and I’m embarrassed, it exemplifies the face that I shouldn’t have done it in the first place. You will also get ideas for new strategies or plays from them. It’s good to stay versatile and use multiple strategies when appropriate. Beware of group think/echo chambers.
I recommend NEVER telling someone what to buy/sell and when. I’ll tell people MY plays or what I like and why, but I will not encourage them to emulate what I do. Depending on the audience, I’ll tell them my exact positions along with my exit and entrance strategy. With closer friends I’ll offer my thoughts on their trades (if asked). If my friend is doing something really risky (one of my friends does some scary stuff) I may ask them if they want my advice, and provide it, especially if they overlooked a risk/event. I will not encourage someone to execute/enter a trade since it has a high potential for hurt feelings or animosity all around.
Don’t fall in love with a stock. Just because something made you money before and you have high confidence in it doesn’t mean it will keep performing. I joke that FDX betrayed me when it started dipping and losing me money. I was over-confident of its bounce-back and sold too many puts too quickly. I’m in several losing trades because of it. However, I will keep good stocks in my rostetracking list or try different strategies or re-enter trades when they change their behavior.
As you start to both buy and sell options and get more experience in general, you'll start seeing the two sides to every trade. You will likely start adjusting your strategies or trying new trades out because of this. Things will likely click one day. Most/all the greeks and options concepts will become almost second nature. For me this was when I could build an Iron Condor from scratch, which was a watershed moment involving a good understanding of many strategies.
Understand Liquidity and volume.
Trading in low volume, low open interest contracts results in wide bid/ask spreads and difficulty having your contracts filled. Look at all the data for a contract, not just the strike and price.
Monthly Expiration dates typically have better liquidity.
Multi-legged trades (Common examples are 2-legged vertical spreads or 4-legged iron condors) have more difficulty being filled, especially on bad brokers like Robin Hood. Having very liquid options for all legs is extremely helpful in obtaining timely and well-priced fills, which maximize your potential profits.
Time in market vs timing the market:
It is extremely difficult to time the market perfectly. If you wait for the perfect opportunity forever, history has proven you will miss out on gains. Keeping all your money out of the market has proven to be ineffective. Now if there is something serious happening with a stock/the market (like say a new pandemic), don’t go all in. I recommend entering incrementally at dips. If the stock has huge upside potential it may never go down, so it might make sense to partially enter at the current price.
IMIO selling puts is a great strategy to get into a stock you like, or at least make money off it. I think buying stock in lots of 100 is usually for suckers. Selling an ATM or ITM put (assuming the math works out) on a stock you were going to buy and hold is ALMOST free money.
I recommend keeping some cash available regardless. If you have a very large account or expect a downturn, hedging with indexes like QQQ, SPY, or VIX or calls/puts may be wise.
Every trade can't be a winner. You will take some losses, you must get used to it. I don’t like having a realized loss of 1K or more on any trade. However, this will happen, especially with larger accounts.
As long as you win more often and beat the S&P that year I consider it okay. I’m kind of aggressive, so I consider 20%+ annually good. 30%+ annually is great. 40%+ and I’m dancing. After trading options I am almost baffled by my old belief that 5% annual returns (mostly from dividend ETFs) was “good”. That’s nothing to me now since I’m willing to take risks. Note: While lots of people danced in 2020, realize that’s an insane Bull Run year and is atypical.
Adhere to your own risk tolerance and never over-extend yourself, especially with margin use. Don’t make huge gambles leaving you uncomfortable. Only gamble with money you are willing to lose.
My personal strategy is to make safer gains for the year and then enter slightly riskier strategies using those gains. I can be slightly-moderately more aggressive and compound my gains. For me I often sell puts to make money, then when I see a big opportunity I’ll sell a put and buy an OTM or moderately ITM call.
Understand it’s not safe to try and get rich overnight. However, once you hit big “steps” things may start to snowball. You can enter more positions and take more risks if you choose to.
For me this when I hit 50k, then 100k. I was able to balance low and moderate risk positions to more significantly grow my account. I’ll even do a high risk thing now and again because my gains can absorb it (assuming I have them).
I can’t wait to get to 250K, then 500K. I know it’ll take quite a long time, but I am confident I’ll eventually be able to have 500K and (hopefully) 1M in my non-401k trading account with gains and additions from my job. I can only imagine how “dangerous” I will be with that kind of capital.
If you missed "the next big thing" like AAPL, TSLA, or the time machine I’m building in my basement. Don't get upset, learn from it. Adapt and become a better trader for next time.
Figure out why a company was so promising, before they mooned. Determine how you would have traded differently in hindsight. Apply those lessons to the next company you believe has long term growth prospects.
For me that's putting in 1-2.5k towards shares and/or buying LEAPS on it. Depending on my bullishness I may buy “cheap”, fairly far OTM calls. The far OTM options are sort of lottery tickets. If I'm right the (relatively) low cost will have explosive profits; if I'm wrong, they didn't cost that much so it's a calculated loss I’m willing to accept. For more serious bets I’ll buy ITM LEAPS to run PMCCs on. I also like to buy 1-2K in my 401k for very long-term plays.
The stock market hates uncertainty, it seems to crave the status quo. A shakeup can potential tank a stock, even if it's nothing. With shares you can wait it out, but this can be problematic for options. If you see volatile/uncertain times ahead (politics, disease, manufacturing, earnings, etc.), you might want to reduce your overall portfolio risks or hedge.
Profit Retention / Loss Mitigation
If selling options, it is a viable strategy to close early after a large gain with many DTE left until expiry. See TT videos / strategies on this.
Don't hold options through earnings unless you literally want to gamble. I like playing on earnings run ups, but that can be risky.
If you hold options through earnings, IV crush will happen immediately afterwards, devaluing the option. However, if the option is profitable enough, IV crush won’t matter, which will still make money for a call buyer. A sold put sufficiently far OTM will benefit from IV crush, even if the stock dips after slightly bad or lukewarm earnings.
Don't throw good money after bad. Don't gamble on a recovery if your assumption appears to be wrong or the market is flat out tanking. If you are wrong and still believe in the company, wait twice as long as your original plan (wait for your 2nd entry point vs 1st) before adding to your position.
Consider using stop losses to lock-in profits on rides up or sometimes use them to prevent losses. Note, stops can be easily triggered in volatile options. Now when I'm up a lot on calls (especially around earnings or large momentum run-ups) I always set stop losses. I have been burned too many times. In December 2020 I didn't set a SL on several thousand dollars of FDX calls I was already up on and I "lost" ~$5K of unrealized gains. If you're up big, don't get too greedy.
A possible strategy if a stock is on a tear and you have multiple options open: Close some positions (I prefer to do this incrementally if the stock has momentum), but leave 1+ open in case the stock goes into outer space/the floor. Next, set a stop loss with a little buffer below its current movement / range so it doesn't get hit unless the stock falls hard. Finally, watch the stock closely and if it keeps rising, keep moving the stop loss up in little bits incrementally. This will let you keep more profits on a hot streak, but give some protection and secure more gains. It will also help eliminate FOMO if a stock exceeds your expectations.
Have rules when to roll out, down & out, or up & out. I like TT’s roll at break even or at 1x loss and to always roll for a credit (or for me a very minor cost). Obviously these rules need some monitoring. Know your stocks, the news, and technicals so you don’t jump the gun.
If you roll early for a credit and you’re right, it’s not the end of the world. You’ll just need to hold longer, which will obviously tie up capital. Sometimes it’s better to tie up some money (especially if you aren’t paying interest) than eating a huge loss.
Rolling too late can be worse though. I currently have a very underwater FDX put I sold that is over 2x loss, rolling it does almost nothing unless you want to pay a debit or extend it extremely far out.
On huge options gains, I strongly you recommend taking profits by rolling up/down or incrementally sell your contracts at several different prices (this is why having multiple contracts is nice).
Rolling up involves selling your initial call, then using a fraction of your proceeds to buy a cheaper, further OTM call with the same expiry; puts are inverse this. When rolling up I like to ensure the new option’s cost is 15-40% of my realized gains. I’ll buy a more or less expensive new optoin based on my convication to the stock and predicted movements. You can also roll up and out to get a further expiry and strike.
This is monumentally important if you are playing with incredibly high rising stocks or during a short squeeze.
Sad story time: I completely screwed up when I forgot to roll up, twice, during the GME gamma/short squeeze. I didn’t take my own advice; I didn’t have a real exit or transition plan and I got emotional. It all happened so fast and I was at work; the insanity of the run up and subsequent gamma squeeze caught me off guard. I should’ve clocked out and thought through the situation for 15-30 minutes to form an impromptu plan, then executed trade(s). My moderate risk tolerance coupled with my desire to take profits took over. When the stock partially cratered after a run up, I sold to retain gains. In the heat of the moment I thought the squeeze was squoze and it was going to plummet into the ground and I wasn’t being rational.
On 1x 4K call I would’ve made an additional 15-25K if I rolled up to a cheaper contract with some of my profits.
I know I missed out on significantly more with a 2nd call I had. Depending when I rolled it, it would likely have been an additional 25-50k in profits.
I talked about learning from your mistakes above. This mistake is branded into my brain due to the massive gains I missed out onby not rolling up. I’m furious with myself as I write this 1 week after the GME gamma squeeze, I’m a planner and I didn’t plan. If anything I own is significantly up ever again, I’m rolling up (or at least setting a stop loss). If necessary, I’ll roll up a trade multiple times to keep extracting profits.
Learn from my mistake so you don’t miss out on gains too. I strongly recommend rolling up when you are up big on a call / roll down when you are up big on a put. This enables you to take profits, stay in the game, and keep extracting more gains.
If you trade a lot of options, talk to your broker about a discount. I was getting the standard $.50/contract with E-Trade, but I traded over 300 contracts a quarter and was able to get the fee reduced by over $.10 by just asking. I am now doing more spreads and condors, so once my volume gets very high, I’ll ask again.
If you have a broker that isn’t great and you want to switch, leverage your current trading fees to the new broker. Tell them you’ll move over $### thousand if they beat your current options trading fee per contract.
Trade Planning & Position Management Tips
As you gain experience, start monitoring what kind of Delta, OTM, DTE, etc. you are most profitable with. Use it in your future trades. You'll often see the tasty trade 30-45DTE .3 Delta strategy for selling.
Before entering a trade, look at rough technicals like resistances and supports to consider your relevant strikes as well as entry/exit points. Look at upcoming earnings & dividend dates as well as stock/market news.
Consider staggering strikes and expirations for safety and diversity; it’s nice to avoid assignment on 3 puts at once because you used the same strike for all 3.
Incrementally enter positions on large rises/falls. One of my favor strategies is to buy dips after over reactions. By doing this slowly in large price "steps" it helps combat FOMO and helps you avoid getting slaughtered.
This will also help you avoid "chasing a falling knife". It also ties into having a plan.
I set alerts at several predetermined prices and I REALLY try not to enter new trades unless I hit my preset points. It makes me less emotional and usually more effective.
Don't buy far expiration options with poor liquidity for shorter term plays. I bought 1x GME 1-year+ LEAPS call before the 2021 short squeeze. That was stupid, I should've bought 2-3x 60-120 day calls to have better liquidity. I also paper-handed it and missed out on my lambo.
If selling options, consider rolling (for a credit) to avoid assignment when it makes sense / meets your plan. Rolling closer to expiration can be a valid strategy to get theta on your side. On the flip side, if the stock moons or plummets it could've been better to roll before it got crazy deep ITM. See rolling “rules” above.
Covered Calls:
If a stock has a large movement range, I think it can be worthwhile to wait to open a CC after the last one is closed/expires. I have been more successful waiting for another opportunity vs. opening one immediately on the Monday after the second the last one expires.
Consider selling covered calls at all time highs/peaks. If you sell a CC and the stock dips significantly, and you think it’s temporary, you can buy to close your CC for a quick profit, then reopen it later.
If you own Meme stocks, selling covered calls runs the risk of missing out on large gains. On these stocks I typically only sell them further OTM than I normally would or not at all. If I do sell CC on a Meme stock I try to ensure I have 25-100 other shares that won’t be called away.
-Advanced Beginner- Spreads
Spreads (with 2 legs) are neat because they manipulate how delta and theta act. It caps your gains and losses, but you can profit with less stock movement. Try several spreads on a P/L calculator to see for yourself.
Spreads usually require margin trading.
Spreads allow you to define max losses (assuming you close before expiration day) and use less capital.
Experienced traders will open many spreads at identical/similar strikes to heavily profit off movement. Spreads can make you/lose you a lot of money if you are right.
For example. I could make a $200 premium off a $500 risk trade, max loss would be $300. This is much more effective capital utilization than a naked or cash secured put, however it does not have the same downside protection or “wheel” potential as a sold put. Higher risk, higher reward.
Vertical Debit spreads: I think of these like mini calls/puts. I personally don’t use them unless calls are outrageously expensive or the break even is absurdly high, but there’s nothing wrong with them. A call debit spread will lower your breakeven and overall cost vs just a call. You can do clever things like making a positive theta call spread if you’re creative. I like doing this since I hate losing money to theta.
Vertical Credit spreads:
Very good theta strategy to define downside/upside risks.
A put credit spread is bullish and allows you to bet on upward movement with less capital and defined losses.
A call credit spread is a bearish strategy that allows you to bet on downward movement. These are very cool since they allow you to sell calls without selling naked calls, which can ruin you financially. I see selling these as better than buying puts since it’s so much easier to be profitable; to be redundant, Θ rocks.
I repeat this on purpose: Don't EVER leave short spreads open on expiration day, close them. If you don't close, they better be VERY far from the strike on a non-volatile stock. In after hours a stock can jump/dip below your strike and be exercised without the other leg to protect you. This can lead to massive, life ruining losses. This is not an exaggeration, google this and be scared. It happened to a fair number of people with TSLA. Video explanation: https://www.youtube.com/watch?v=rtVFj9nRRDo&t=315s
Short Straddle:
Trading Mechanics, Taxes, Market Manipulation
Learn about wash sale rules. They suck and are very easy to activate with options. This will eliminate your ability to write off losses. Over trading can easily cause wash sales. https://www.investopedia.com/terms/w/washsalerule.asp
Short attacks:
Learn to recognize these sketchy attacks by hedges/firms. They manipulate the market, it’s been documented countless times. A common one is rapid short selling, which pushes the price down.
Some people say short ladder attacks don't exist. I've seen some very strange stock nosedives off low volume, so I tend to think they do.
If you plan well enough and the market doesn’t give up on the stock you may be able to use it as a great opportunity to buy the dip.
Cramer explains how he intentionally manipulated the market when he ran a hedge fund years ago. Multiple links to the video are below since this video gets pulled often, Cramer / The street never wanted this to go public.
Due to this video I don’t fully trust Cramer. His show can give you stock ideas to buy (or inverse), but you never know where his true loyalties lie.
Plan for taxes if you are up big. You may need to over withhold or contribute to taxes quarterly depending on your situation. https://www.irs.gov/taxtopics/tc306
-Intermediate / Advanced Strategies (work in progress)- You’ll notice many of these strategies inverse one another. Options Strategy Finder This website is great for learning about new strategies, you’ll see many links to it below. https://www.theoptionsguide.com/option-trading-strategies.aspx Short Strangle / Straddle
Both of these strategies profit from little price movement. I recommend using a P/L calculator to determine BE, profit, etc.
A straddle sells (or buys) two options at the same expiry and strike.
A strangle sells (or buys) two options at same expiry with different strikes.
Both these strategies involved selling a Call and a Put for a credit. Straddle uses ATM legs, strangle uses OTM legs.
Limited max profits and unlimited risk. Due to the unlimited risk, I am not a fan. However, many people like these a lot.
These strategies profit from neutral or mostly neutral stock movement. They receive a credit to open and benefit from theta decay. If your stock is range bound, these may be a good choice.
These are both 4 "legged" trades, so you will have 4 trading fees to enter or exit the trade. A lower cost or zero cost broker shines here. However, “bad” free brokers will give you poor fills, which may not be worth the discount.
Condors and butterflies have "wings" which are your purchased puts and calls. The wider the wing the higher the max profit/risk. The condor body can be riskier and skinny with a narrow high profit range or wider for a much greater chance of success with lower payout.
An iron condor is built by combining a put credit spread and a call credit spread with the same expiry.
An iron condor can be thought of as a modified short strangle with limited risk, and therefore a bit less profit. I prefer defined limited risk.
The butterfly is similar except instead of a plateau it has a sharp peak. My personal mental note is that a condor looks more like a strangle with wings, while a butterfly looks like a straddle with wings.
Pay attention to earnings dates when you open these, I have forgotten to check before and it led to bad trades.
The debit version of an Iron Condor. You expect the price to stay inside your defined range. This strategy profits from neutral or mostly neutral stock movement. I’ve never tried this, Iron Condors make more sense to me.
Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Credit to open.
Limited risk / limited reward.
Can be harder to set up. I want to try these, haven’t yet.
Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Debit to open.
LEAP Options are options that are long term with many DTE, often over a year until expiration. LEAP calls are great for long term growth plays (downtrends with LEAP puts) or simply when you really like a company and can't afford 100 shares. LEAPs (or any "longer term" option) enables you to sell a PMCC or PMCP (below)
PMCC / PMCP
PMCC or PMCP are poor man's covered call (or poor man's covered puts). They are diagonal options often used with purchased LEAPs. You sell a shorter DTE call/put with a further OTM strike than your purchased call/put. For PMCC/PMCPs it is often recommended to recoup your extrinsic value as soon as possible, some recommend with your first call CC or put sale, to ensure you are positive if the option is assigned early. These have a lot of moving parts and strategies. If you buy a barely ITM call/put and sell a nearby strike call/put you run the risk of the purchased option getting "blown by" on large stock movement and ending up with a very negative losing trade. Keeping your purchased LEAP deeper ITM should protect you. Check your initial PMCC using an options calculation to make sure you don't screw up.
I'm currently tinkering with these myself. So far I like .7-.9 delta call LEAPS with 30-45 DTE calls on my CC. The goal is to hold the LEAP long term, potentially until expiration, and constantly sell calls/puts on it that expire worthless. Typically the call/put is rolled up and out or down and out if it's going to be assigned, unless you don't want your LEAP anymore.
Some people look at these many sold CC or puts as profits, I look at them as lowering my cost basis until it's zero (or even negative). I have a page in my notebook I write each CC on my NIO LEAP (I Meme stock sometimes). I find it satisfying to slowly see the cost of the original option disappear. When I originally wrote this I had ~2 years left on it and it's 9-10% paid for; that doesn't even count the actual gains the LEAP has.
TT states this is considered an IV play, which I partially agree with. You want to buy these during low IV times since an IV drop will hurt your LEAP value. I look at them more as a way to sell calls/puts on a high IV company with a lot of price movement and potential upside/downside.
Good brokers will allow you to set these up, some will require a desktop to do it. This lets you link one action to another. In programming think of it like an if-then. You’ll tie a buy/sell to another buy/sell
Setting trailing stops on options is very chaotic since their price movement can be drastic due to volatility. I prefer to set my trailing stop to a stock.
What I like to do is set a trailing stop on a stock (or just link it to a stock price drop) and have it sell 1 share I own. Then it immediately executes a market order to sell my call. I’ve had good luck doing this with incredibly volatile plays were stop losses aren’t effective. I’ll often have an order saved and ready saved for when a strong run up starts. When my price alerts start blowing up my phone, I’ll immediately hit execute to turn it on.
Disclaimer: I’m not a financial adviser, I'm actually an engineer. I’m not telling you to invest in a specific stock/option or even use a specific strategy. I’ve outlined and more extensively elaborated on what I personally like. You should test several strategies and find what works best for you. I'm just a guy who trades (mainly options) part-time for financial gain and fun. I don't claim to be some investing savant.
Well, I’ve seen a ton of posts on here recently about taxes. Everyone arguing about who is right, who is wrong. The constant “that’s dumb. Nobody would gamble if they did taxes like that”. Well, I filed my taxes last night. Everyone saying that you report total winnings as income and report losses as a deduction is correct. You do NOT claim net winnings. I don’t care if “FanDuel’s app says net winnings”. I used Credit Karma to file. In the income section it specifically states “Gambling Winnings (excluding losses)” in the deductions section, it asks for “Gambling Losses”. This is where you report your losses. So, if you won $5k, you report all $5k as income. If you lost $4500, you report that in deductions. You will then pay taxes on the $500 net profit if you can itemize. YOU DO NOT PUT $500 IN THE INCOME SECTION. As we all wondered, unless you have enough deductions to actually itemize, you’re stuck paying taxes on all of the winnings and your losses get lumped into the standard deduction. Not here to argue or get into “dude, you’re wrong and stupid” back and forth. I’m not wrong, I’m correct. If you do not believe me, file however you would like to and hope the IRS does not come knocking. Happy tax season y’all.
Lost in the Sauce: Rules finalized to take away LQBTQ rights, cement border wall, sell oil rights
Welcome to Lost in the Sauce, keeping you caught up on political and legal news that often gets buried in distractions and theater… or a global health crisis. I am doing a separate post for the insurrection and related events. I think it is important to make sure the news in this post doesn't get overlooked. Housekeeping:
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Russia
A new report by the Office of the Director of National Intelligence (ODNI) found that Trump political appointees politicized intelligence around foreign election interference in 2020, resulting in significant errors. ODNI analytic ombudsman Barry Zulauf delivered the report to Congress on Thursday: “Analysis on foreign election interference was delayed, distorted or obstructed out of concern over policymaker reactions or for political reasons.” The biggest misrepresentation of intel involved diminishing the threat posed by Russia and overstating the risk of interference from China.
“Russia analysts assessed that there was clear and credible evidence of Russian election influence activities. They said IC management slowing down or not wanting to take their analysis to customers, claiming that it was not well received, frustrated them. Analysts saw this as suppression of intelligence, bordering on politicization of intelligence from above.”
WaPo: Zulauf, a career official, also found an “egregious” example of attempted politicization of the Russian interference issue in March talking points on foreign election threats, prepared “presumably by ODNI staff” and “shaped by” then-Director of National Intelligence Richard Grenell.
The Justice Department and the federal judiciary revealed that the Russian Solar Winds hack also compromised their computer systems. 3% of the DOJ’s Microsoft Office 365 were potentially affected; it does not appear that classified material was accessed. The impact on the judiciary seems much more significant, jeopardizing “highly sensitive confidential documents filed with the courts.”
The sealed court files, if indeed breached, could hold information about national security, trade secrets and wiretap transcripts, along with financial data from bankruptcy cases and the names of confidential informants in criminal cases...
Appointees
D.C. Attorney General Karl Racine has accused U.S. Agency for Global Media Director Michael Pack of funneling $4 million in nonprofit funds to his own for-profit company. In a civil lawsuit filed last week, Racine states that for over 12 years, Pack used a nonprofit company he owned to direct money to his private documentary company, enabling “Pack to line his company’s coffers with a stream of tax-exempt dollars without...a competitive bidding process, public scrutiny, or accounting requirements regarding its spending.” Employees at Voice of America have filed a whistleblower complaint accusing Pack of using the agency “to disseminate political propaganda in the waning days of the Trump administration. The staffers take issue with a planned speech by Secretary of State Mike Pompeo to be broadcast from VOA headquarters. The event, to be attended by a live audience, “is a specific danger to public health and safety” in the middle of a pandemic. Finally, the whistleblowers say the event is “ a gross misuse of government resources,” costing at least $4,000 in taxpayer funds to date and using 18 employees who would otherwise be producing VOA content. Acting Defense Secretary Chris Miller has announced his appointees to the panel set to rename confederate military bases and plan the removal of confederate symbols/monuments. Most controversially, Miller named White House liaison Joshua Whitehouse, who oversaw the purge of the Defense Policy Board and the Defense Business Board last month. The other three Miller-appointees are former acting Army general counsel Earl Matthews, acting assistant secretary of Defense Ann Johnston, and White House official Sean McLean. The remaining four members will be appointed by the Senate and House Armed Services Committees.
The 10 Army posts named in honor of Confederate generals are Camp Beauregard and Fort Polk in Louisiana, Fort Benning and Fort Gordon in Georgia, Fort Bragg in North Carolina, Fort A.P. Hill, Fort Lee and Fort Pickett in Virginia, Fort Rucker in Alabama, and Fort Hood in Texas.
Trump
The Trump Inaugural Committee, a nonprofit, improperly paid a $49,000 hotel bill that should have been picked up by Trump’s for-profit business. D.C. Attorney General Karl Racine revealed the allegation in an existing lawsuit against the committee, which already accuses Trump’s hotel of illegally pocketing about $1 million of donors’ money. “The Trump Organization was liable for the invoiced charges...The [Committee’s] payment of the invoice was unfair, unreasonable and unjustified and ultimately conferred improper private benefit to the Trump Organization.” The Professional Golfer’s Association voted last night to move the 2022 PGA Championship from Trump’s Bedminster course. Jim Richerson, PGA of America president, said in a statement that “it has become clear that conducting” the championship at Trump’s property would “be detrimental to the PGA of America brand” and put the organization's ability to function "at risk." Amid speculation that Trump may spend inauguration day at his Scottish golf course, Scotland First Minister Nicola Sturgeon warned him that even presidents can’t break the country’s pandemic restrictions. “We are not allowing people to come into Scotland now without an essential purpose, which would apply to him, just as it applies to everybody else. Coming to play golf is not what I would consider an essential purpose,” she said. Trump is on a Presidential Medal of Freedom spree, giving out the award to sports figures and Republican allies. Last Monday, Trump awarded the medal to Rep. Devin Nunes for his work undermining the FBI’s investigation of Russia’s election interference. “Devin Nunes’ courageous actions helped thwart a plot to take down a sitting United States president,” the White House press release states. Likewise, Trump gave the medal to Rep. Jim Jordan (R-OH) for his “effort to confront the impeachment witch hunt” and “exposing the fraudulent origins of the Russia collusion lie.”
The day after Trump supporters rampaged through the Capitol, Trump awarded the medal to retired professional golfers Annika Sorenstam and Gary Player. The president planned on giving New England Patriots coach Bill Belichick the medal on Thursday, but he declined the offer, saying that “the tragic events of last week occurred and the decision has been made not to move forward with the award.”
Courts
Dominion Voting Systems filed suit against pro-Trump lawyer Sidney Powell for defamation. Powell falsely claimed that Dominion had rigged the election, that Dominion was created in Venezuela to rig elections for Hugo Chávez, and that Dominion bribed Georgia officials for a no-bid contract,” the lawsuit states. Citing millions spent on security for employees, damage control to its reputation, and future losses, Dominion requests damages of more than $1.3 billion.
Dominion's lawyer told reporters last week the lawsuit against Powell “is just the first in a series of legal steps.” Ari Cohn, a free speech and defamation lawyer, told WaPo: “If I had to guess I would say that [Poulos] wants a very public vindication with a ruling establishing that Sidney Powell defamed them and that her statements were baseless...That's not something you generally get in a settlement agreement.”
Just last week, Trump again said at a rally that Dominion machines allowed “fraudulent ballots” to be counted during the 2020 election (clip).
The Supreme Court declined to fast track eight Trump-related cases related to the 2020 election, ensuring they won’t be taken up before Biden’s inauguration. The cases include one brought by attorney Lin Wood against Georgia’s Secretary of State, the so-called “Kraken” cases, and three brought by Trump’s campaign. It is possible the lawsuits will be declared moot after Biden is sworn in. The Supreme Court has agreed to hear two cases alleging that the Treasury Dept. incorrectly distributed Coronavirus aid meant for tribal governments. The Lower 48 Tribes argue that Alaska Native Corporations (ANCs) are not eligible for CARES Act funding, while the Trump administration wants to divvy up the money between tribes and ANCs.
Immigration
A federal judge blocked the Trump administration’s final attempt to restrict U.S. asylum laws. District Judge James Donato (Obama appointee) ruled in favor of advocacy groups who argued that acting Homeland Security secretary Chad Wolf lacked authority to impose the new rules, which would have resulted in the denial of most asylum applications.
“The government has recycled exactly the same legal and factual claims made in the prior cases, as if they had not been soundly rejected in well-reasoned opinions by several courts,” Donato wrote. “This is a troubling litigation strategy. In effect, the government keeps crashing the same car into a gate, hoping that someday it might break through.”
On Monday, acting Homeland Security secretary Chad Wolf submitted his resignation, citing the recent court ruling that he is not a valid appointee to the position. His resignation letter does not cite the Capitol riots or Trump’s language inciting the insurrection. FEMA Administrator Pete Gaynor will be the new acting secretary.
"Unfortunately, this action is warranted by recent events, including the ongoing and meritless court rulings regarding the validity of my authority as Acting Secretary. These events and concerns increasingly serve to divert attention and resources away from the important work of the Department in this critical time of a transition of power," Wolf added.
A new Immigration and Customs Enforcement policy will make it harder for immigrant minors to obtain asylum in the U.S. The change was made at the end of last month by then-acting agency leader Tony Pham, who served in the position for less than five months.
Beginning Dec. 29, ICE officers were told that they must review whether an immigrant child is still “unaccompanied” each time they encounter the minor… The memo indicates that the evaluation by ICE officers can come at any time, including when an officer is reviewing immigration court records of a child, and if it’s determined that an immigrant is no longer unaccompanied, they will move to change their status. Such a change could lead to making some children ineligible to have their asylum claims initially heard and processed… “If implemented aggressively, this policy could significantly decrease the number of children who ultimately receive asylum in the United States,” said Sarah Pierce, an analyst at the Migration Policy Institute. “They are really putting the onus on ICE officers to do everything they can as frequently as they can to remove these designations.”
The Trump administration is still awarding border wall contracts, even in areas where private land has not yet been acquired. The move will make it more difficult for Biden to stop construction of the border wall.
Attempts to halt construction completely, as Biden promised, will prove difficult, particularly if contracts continue to be struck -- a challenge [acting Customs and Border Protection Commissioner Mark] Morgan acknowledged Tuesday. "They could terminate those contracts if they want to, but that's going to be a very lengthy, messy process," Morgan said. "We're going to have to go into settlement agreements with each individual contractor," Morgan added, noting, that payments will have to be made for what they've already done, as well as for materials produced. He estimated the process could cost billions.
Trump is set to visit Alamo, Texas, today to celebrate the completion of more than 400 miles of the border wall. You can watch the event on YouTube at 3:00 pm eastern.
Miscellaneous
Stories that didn’t fit in the above categories... The Trump administration auctioned off leases to drill oil in Alaska's Arctic National Wildlife Refuge last week. Only two private companies bid, each winning large tracts of land. Knik Arm Services, from Alaska, paid $1.6 million for a 50,000-acre tract along the Arctic Ocean. A subsidiary of Australian company 88 Energy paid $800,000 to win the smallest tract. One of the Health and Human Services Department’s final acts under Trump was finalizing the removal of Obama-era regulations barring discrimination among HHS grantees. The change will allow recipients of federal grant money - like adoption and foster agencies - to discriminate against LGBTQ people and those of a different religion.
Human Rights Campaign: “Statistics suggest that an estimated two million LGBTQ adults in the U.S. are interested in adoption… Further, research consistently shows that LGBTQ youth are overrepresented in the foster care system, as many have been rejected by their families of origin because of their LGBTQ status, and are especially vulnerable to discrimination and mistreatment while in foster care. This regulation would only exacerbate these challenges faced by LGBTQ young people.
[Scottish Football] How one of Scotland's biggest clubs was liquidated and had to start all over again
Obviously this isn't set in England, but spiritually this piece is within my English Football series. The first six episodes covered Nottingham Forest's 21st century woes, the dickpic that consigned Notts County to the non-league, a reignited rivalry between Derby County and Leeds United, Stoke City's legendary shithouse era, the English Golden Generation of the 00s descending into farce, and Wimbledon FC's controversial relocation to Milton Keynes This spin-off piece follows on from the main question raised by the Wimbledon FC/MK Dons saga. When does a club stop being a club? Is it the legal entity or something rather more intangible? These were questions posed with regards to one of the titans of Scottish football earlier this decade. Background - The Establishment Club Rangers FC has long cultivated an image as Scotland's 'establishment club', it isn't just a sports team, but an institution that embodies a particular way of living and worldview. Alongside other institutions like the Church of Scotland, the club is perceived as embodying traditional and small-C conservative Scottish values. Alongside Celtic (more on them in a bit) Rangers have dominated Scottish football since the league started. No club other than the two Glaswegian sides has won the league since 1985. Rangers have 54 league titles, Celtic have 51. The joint 3rd best sides (Aberdeen and the Edinburgh pair Hearts and Hibernian) have just four a piece. And yet as a legal entity the club ceased to exist in 2012. What happened? Does Rangers FC still exist? It would be impossible to tell this tale without telling the tale of the Old Firm and the profound political, cultural, and religious divides involved. Glasgow's two largest clubs have a rivalry that defies comparison to anything in the rest of Scotland or in England. Essentially Rangers FC and its supporters represent Protestantism and British Unionism, while Celtic FC are considered to be aligned with Catholicism and Irish Nationalism. When the two sides meet, the Scottish saltire is rarely flown by supporters. Rangers supporters prefer the Union Jack or Ulster Banner, Celtic fans are likely to fly Irish tricolours. It is as if somebody took the socio-cultural conflict of Northern Ireland and transplanted it into a football ground. Which is sort of what happened. Ultimately a big factor was migration to Glasgow in the early 20th century - Irish Catholics in Glasgow set up Celtic FC as their club, while Protestants from Northern Ireland (who are historically of largely Scottish extraction) who worked in the shipyards of the Clyde came to adopt Rangers which was located near the shipbuilding areas. Local Scots, being generally Protestant, inclined to support Rangers and many would have shared the religious and political feelings of the newcomers from Northern Ireland. This has meant that at matches both clubs have sections of support who chant about the Northern Irish conflict - some Rangers fans have a 'songbook' including the Loyalist anthem The Sash (which commemorates King William III, the Dutchman invited to become King of England and Scotland who defeated a Catholic army at the Boyne in 1690), while Celtic fans might sing in support of the Irish Republican Army. This involves by no means the majority of supporters, but it is important in setting the atmosphere at games. Rangers FC had until the late 1980s an alleged policy of not signing any player known to be a Catholic. This led legendary Celtic manager Jock Stein to joke that if offered a Catholic or a Protestant to sign for Celtic, he would sign the Protestant in the knowledge that Rangers would never sign the Catholic. I cannot find evidence of any player ever transferring directly between Celtic and Rangers in the postwar era, with the low number of players who have turned out for both having had a 3rd club in between. Another example of the intensity is the way in which the clubs traditionally share shirt sponsors. This sounds innocuous, but the only way to sponsor one of the clubs without triggering a mass boycott by the other supporters was to simply sponsor both. No other football rivalry in Britain has a dynamic like this (Liverpool and Everton did to a far lesser extent before about the 1960s, but sectarianism largely died out there decades ago), even in the days when hooliganism was a serious blight on English football it never quite reached the sort of scenes on display at the 1980 Scottish Cup Final. Which club is the 'biggest'? It is impossible to say. Rangers have had more League titles, but Celtic being the first British club to win a European Cup in 1967 is a fairly potent trump card. What is without a doubt is that they are the two best supported Scottish clubs and their rivalry is possibly like no other. Chasing the Rainbow Avid readers of this series will notice a theme. The 1990s were a boom time for football and everyone involved in the sport. TV revenue started to really take off, as did the prizes for winning European competitions. Many clubs sought to capitalise on the windfall and Rangers were no exception. Their chairman, Sir David Murray, had become one of Scotland's weathiest businessmen by leveraging debts against future revenue. He spent big on Rangers in the hope that they would win a major European trophy and repay his investment. Top players like Paul Gascoigne came to Rangers where before it was fairly rare for big name players from other leagues to move to Scotland. Domestically his investments paid off, from 1989-97 Rangers won nine League titles in a row, equalling the record set by Jock Stein's great Celtic side between 1966-74. Unfortunately this did not translate to the windfall a Champion's League win would have given. While Murray was bankrolling Rangers, other clubs around Europe were likewise chasing the new massive financial prizes. Rangers came close to getting past the group stage of the new Champion's League format in 1992-93, but no Scottish club would enter a Champion's League knockout round until Rangers do so in 2005-06. The debts mounted and Murray sought ways to manage the debts and hedge them against future revenue anticipated from TV fees and European prize money. He allowed the Bank of Scotland to buy a stake in the club with a mortgage allowing them to recover their losses in the event of the club defaulting on its repayments. Nothing to worry about, surely? David Murray had become a wildly successful businessman by effectively managing credit lines and debt against future income to fund expansion. But a far bigger problem was just three small letters. EBT Put simply, Employee Benefit Trusts are a way of not paying tax, it was legal in some cases at the time but is generally illegal now. Murray sought, from 2000, to pay his players through EBTs. This meant that they would be able to offer high net wages to players while cutting tax costs. In Britain most employees have all their tax payments deducted by the employer, so schemes like this and ones where employees are paid in dividends are a way of essentially not paying tax. By 2010 HMRC had begun to investigate the case, concluding that Rangers may have evaded £49m in taxes, a vast amount for a club already overleveraged in debt in a league not known for being particularly wealthy. By about 2008 Murray had had enough of Rangers and was looking to sell up. He had gambled and lost huge amounts of money on the club, which was now saddled with huge amounts of debt. The prospect of paying £49m to HMRC if the courts ruled against Rangers deterred any serious buyer and it took some years for a buyer to emerge. Another serious issue was the sheer amount of debt Rangers had to Lloyds (who had taken over the Bank of Scotland), with fans in 2009 threatening a boycott of the banking chain if the bank called in its debts. Would a buyer emerge and save Rangers from this predicament? Well, a buyer would emerge in 2011. Not the other bit, sadly. Enter Craig Whyte Craig Whyte had once been Scotland's youngest millionaire as a venture capitalist. He bought the club for £1 from Murray but desperately needed to leverage some funds to settle the Lloyds debt, so he borrowed a cool £26.7m against future season ticket sales. This on the face of it should have set alarm bells, even the biggest clubs don't make huge amounts of money on matchday tickets in relation to their massive costs. Whyte also indulged in a bit of tax fiddling. But rather than setting up an avoidance mechanism and letting the lawyers fight it out, he just stopped sending Her Majesty's Revenue and Customs the income tax payments for the club players and staff. Definitely not the sophistication of Murray. Matters only got worse. In early 2012 BBC Scotland aired a BAFTA-winning documentary about Whyte and Rangers, which revealed that Whyte had been once banned from working as a company director for seven years. The Scottish Football Association agreed, Whyte was not a 'Fit and Proper' person to own a football club. At about this time Rangers entered administration. When this happens in Britain, the company's creditors can agree to a 'Company Voluntary Arrangement' (CVA) which essentially means agreeing a plan for the company to continue operating while in administration so the creditors can recover their debts. HMRC, with the outstanding £49m tax case from Murray's era plus the money owed by Whyte's outright failure to pay tax, voted against allowing this to happen. In the absence of a CVA and agreement with creditors, this meant that Rangers FC as a company ceased to exist in June 2012, with all assets transferred to 'Sevco Scotland Ltd'. Could this have been avoided? In the end, the £49m owed to HMRC which proved such a millstone has been substantially reduced and the cases around it are still ongoing. But ultimately, Rangers had vast amounts of debt not just to HMRC. For his part Whyte would be bankrupted by his loan to buy the club and would be faced with a far longer ban on acting as a company director. Sevco FC? Sevco inherited everything Rangers had. The players had an opportunity to transfer their employment to Sevco, which also gained Ibrox Stadium and Ranger's membership of the Scottish Premier League. For the club owned by Sevco to be able to play in the SPL next season, 2/3rds of members had to vote in favour. Clubs such as Aberdeen, Dundee United, and Hearts bowed to fan feeling that Rangers could not continue where they left off. In the end, no club voted in favour of Rangers remaning in the SPL with only Kilmarnock abstaining. This event would generate a huge amount of bad feeling and bitterness from Rangers fans who felt that supporters of other clubs were content to throw them under a bus for reasons not of their making. There was definitely a sense of schadenfreude from supporters of other clubs, watching Scotland's 'Establishment Club' go to the wall. Could Rangers join the Scottish First Division and gain promotion to the Premier League? First Division clubs didn't want to face the consequences of a Premier League problem, so they also rejected it. In the end, the Scottish Football League allowed Rangers FC to rejoin the league in the Third Division, a largely semi-professional league three divisions below the Premier League. Their first competitive game was a Challenge Cup (competition for the two lower leagues in the Scottish Football League) tie against Brechin City, who represent a sleepy town of just 7,000. Clawing their way back up Most of Ranger's players had refused their statutory right to transfer employment to the new company. Nonetheless, the 2012-13 season started well with their first home league game setting a world record for the best attended fourth division match in history as over 49,000 attended Rangers vs East Stirlingshire. A strong league performance saw Rangers confirm promotion into the 3rd tier by the end of March. 2013-14 saw another promotion as Rangers had an unbeaten season in League One (the leagues were renamed at about this time) to secure promotion to the Championship, the first league which would be wholly filled with professional clubs after the mix of professional and semi-professional that plies their trade in Scotland's lower leagues. Rangers didn't make it three back-to-back promotions as they lost a promotion play-off final 6-1 to Motherwell, one of Scotland's more successful non-Old Firm clubs who had suffered a stint in the 2nd tier. During this season they met Celtic in the cup. Some Celtic fans placed an advert in a newspaper claiming that the 'Old Firm' was over and while they had enjoyed a rivalry with Rangers FC they did not recognise the new club as the same entity. This caused some controversy, not just with Rangers fans, but with Celtic fans who were indeed looking forward to the first Old Firm in some time. The accusation that Rangers were 'Zombies' or 'Sevco FC' would become a common one from Celtic supporters at games and remains as such. Rangers won the 2016-15 Scottish Championship to secure promotion, while also beating Celtic in a Scottish Cup semi-final. But, the 'Gruesome Twosome' of Scottish football would once again grace the top flight together. Same as before? Celtic had done very well out of the previous few years. They had won a succession of League titles at a canter with the accompanying European qualification giving them financial muscle the other clubs couldn't compete with. Rangers finished a respectable 3rd, but Celtic once again dominated the league. After an embarrassing elimination out of the Europa League at the hands of a semi-professional side from Luxembourg, Rangers didn't improve on their 3rd place and Celtic won again. It wasn't until 2018-19 that Rangers finished 2nd. With Celtic winning again. Could Celtic's domination be broken before they won 10 titles in a row and broke the record jointly held by 1960s-70s Celtic and 1990s Rangers? Perhaps not yet. 2019-20 started well, Rangers had a fantastic run in the Europa League under Steven Gerrard and beat Celtic at their ground for the first time since 2010. COVID put paid to an increasingly close title race with Celtic awarded the title based on Points Per Game with the season abandoned. This season has very much been Ranger's season though. At the time of writing they seem, barring a miracle/disaster, overwhemingly likely to win the League this year and deny Celtic the coveted ten in a year. Postscript Is the Rangers FC of today the same club as that pre-2012? Displays from Celtic fans would say not, and as a legal entity it certainly isn't the same. But UEFA allows for 'sporting continuity' for a club in terms of identity and honours even if the holding company or corporate structure changes. This suggests something that many football supporters would agree with - a club is as much as community asset as it is a company or business and the stories we have looked at explore the issues when the business and the community collide. Next time, we'll take a look at how Arsenal Fan TV revolutionised football social media while turning their club into a laughing stock
Hey Everyone, So this update is primarily focusedt on the Times Up update, an update focusing on massively expanding what happens when a game on a timer ends with the time running out thanks to suggestions by Antonios and Josh771. That's not all though, there are mountains of other things changed and added, 57 player suggestions and bug reports, a new hidden tavern, new throne room encounters, lots of new locations and events and tons more! HOW YOU DIED (21 features) An important part of what happens after you rule, is how it came to an end. Now there are a bunch of possible ways you can vacate the realm of the living, chosen at random.
Added a system to choose random deaths based on how long your reigned each with sound effects
Added peaceful sleep death outcome
Added quarter of a millenium sleep death outcome (credit u/ColonelKepler)
Added 5 different graphics for grave stone based on public opinion
Added 21 different possible outcomes for how the public react to your death
They love me... they love me not - https://i.imgur.com/PwhaNJJ.png HOW DID IT GO (39 features) Just because they successfully took over the throne, doesn't mean they can successfully run a kingdom. There are many ways it can go, good or bad, and dependent on how you left the realm.
Added good outcome for Dog ruler
Added bad outcome for Dog ruler
Added transitional justice slaver ruler outcome
Added ex-slaves paradox ruler outcome
Added ensalve the rich ruler outcome
Added bitter slaver war ruler outcome
Added peasant council rags to riches outcome
Added peasant council golden age outcome
Added peasant council age of liberty outcome
Added peasant council corruption and abandonment outcome
Added peasant council royal morph outcome
Added peasant council greedy divide outcome
Added demon servant firery hellscape outcome
Added demon servant civil rebellion outcome
Added 1 land ruler shrinking realm outcome
Added 1 land ruler personal money pot outcome
Added 1 land ruler desperation outcome
Added 1 land ruler the balance of duty outcome
Added 1 land ruler rise from the ashes outcome
Added 2-3 land ruler despotic and oppresive outcome
Added 2-3 land ruler neglectful monarch outcome
Added 2-3 land ruler comfort and peace outcome
Added 2-3 land ruler root of corruption outcome
Added 2-3 land ruler prosperous renovation outcome
Added 4-10 land ruler corruption and revolts outcome
Added 4-10 land ruler Chaoticly neutral rule outcome
Added 4-10 land ruler saved by the council outcome
Added 4-10 land ruler wealth gap reduction outcome
Added 4-10 land ruler expert council outcome
Added 11-25 land ruler dictator and local resistance outcome
Added 11-25 land ruler unoteworthy ruler outcome
Added 11-25 land ruler lavish life outcome
Added 11-25 land ruler mega city outcome
Added 11-25 land ruler two extremes outcome
Added 26+ land ruler tool of oppression outcome
Added 26+ land ruler dens of villany and regional councils outcome
Added 26+ land ruler prosperity for the people outcome
Added 26+ land ruler high emperor of the world outcome
Added 26+ land ruler mighty empire outcome
A rollercoaster ride of a reign - https://i.imgur.com/DnfKDFP.png The central city! - https://i.imgur.com/8L4BIJP.png THE DEMON AFTERMATH (12 features) The final act of the new replacement ruler, how do they handle the demons... that is if the demon horde exists, if you have the horde disabled or defeated them yourself then the new ruler doesn't have to worry.
Added 3 possible outcomes if your replacement is a demon agent and demon horde attacks
Added 3 possible outcomes if you have the demon shield artifact and the demon horde rises up
Added intro screen if demon horde rises up after your death
Added system to estimate your armies strength to fight the horde
Added system that modifies your armies strength for the better or worse depending on how well your replacement ruler ruled
Added battle system against demons
Added 2 outcomes for outmatching demon strength and winning
Added 2 outcomes for outmatching demon strength and losing
Added outcome for equal strength to horde and winning
Added outcome for equal strength to horde and losing
Added 3 outcomes for outmatched by demon strength and winning
Added 3 outcomes for outmatched by demon strength and losing
Added the ability to retire from ruling via the throne room to get a game finish (credit Defender)
Reworked the end of game times up screen to give option to view how it went or not
Reworked the end of game times up screen text
Added 11 new possible texts depending on your final score
Reworked the play on screen and added new text
Want to see how the realm existed after you died? - https://i.imgur.com/Tn7i1v8.png If you choose to play on beyond the timer running out... it was all a dream? - https://i.imgur.com/n5nlk4M.png THE HELMSMITH (6 features) For a while now you've been able to get your helmet redesigned via the throne room or your general, I've now added a new location in the Blackmarket's Fighter's District called the Helmsmith, here you can get a new helmet design made any time, I've also added over 800 thousand new possible helmets!
Added a new building to the Fighter's District of the Blackmarket 'The Helmsmith'
Added ability to speak to the Helmsmith (7 dialogues)
Added ability to have a random helmet forged for your kingdom (100 gold)
Added ability to have a helmet forget based on the Helmsmith's personal helmet
Added 853,248 new randomly generated helmet designs (was 346k now 1.2 mil)
Made getting helm design made via General cost (150 gold instead of 100)
Meet the Helmsmith - https://i.imgur.com/arwKCI1.png QUESTIN' WHO ASKIN? (10 features) Terrible title, but after a series of suggestions by u/TheSoundBoard, I've added a number of new possible questing knight outcomes include some less than positive ones!
Added 2/3 chance of public opinion loss for hiring incompetent questing knights
Added extra text to questing knight screen better explaining how they work
Added questing knight quest - Finds two bandit horde bandits fighting on the road and convinces them to join you instead (credit u/TheSoundBoard)
Added questing knight quest - Finds two rebel soldiers left for dead after being branded traitors and convinces them to join you (credit u/TheSoundBoard)
Added questing knight quest - Dinds a battle between mercs and bandits and turns the tide -1 bandit level +2 public opinion (credit u/TheSoundBoard)
Added questing knight quest fail - Fell from a tree while confronting bandits(credit u/TheSoundBoard)
Added questing knight quest fail - Hit on the head by a troll who took pity (credit u/TheSoundBoard)
Added questing knight quest fail - Lost everything in a gambling den (credit u/TheSoundBoard)
Added questing knight quest fail - Bought some magic beans that were actually dirty rocks (credit u/TheSoundBoard)
NEW NAME PREFIXES (3 features) A couple of new peasant orientated name prefixes, beware Torgo the Carrot Cutter!
Added new name suffix 'The Turnip Puller' (-5 battlescore)
Added new name suffix 'The Carrot Cutter' (-3 battlescore)
Added new name suffix 'The Spud Thrower' (+1 battlescore)
BLACKMARKET MERCENARIES REWORK (14 features) After a bug report by u/TheSoundBoard pointing out that once owning the Blackmarket there were no more bandits for hire. I looked into and decided to add a new system while I was at it, so now alongside several bugfixes theres a new system where depending on how high your public opinion is, less and less bandits will appear for hire each year.
Added New section of Blackmarket Herald Newspaper reporting new bandits for hire from the slums
Added New section of Blackmarket Herald Newspaper reporting new bandits for hire from the market in general when you own the market
Added system to generated new Blackmarket mercenaries based on your public opinion (lower the opinion the more recruits)
Reworked Blackmarket bandit merc hire screen to show effect of public opinion on recruitment (if market owned)
Added 75+ public opinion grants between 1-3 new bandit mercs per year in owned market
Added 50+ public opinion grants between 1-5 new bandit mercs per year in owned market
Added 25+ public opinion grants between 1-8 new bandit mercs per year in owned market
Added 0+ public opinion grants between 1-10 new bandit mercs per year in owned market
Added -25+ public opinion grants between 1-12 new bandit mercs per year in owned market
Added -50+ public opinion grants between 1-15 new bandit mercs per year in owned market
Added -75+ public opinion grants between 1-18 new bandit mercs per year in owned market
Added 76 or lower public opinion grants between 1-20 new bandit mercs per year in owned market
Fixed Blackmarket bandit hiring screen no bandits message
Fixed Blackmarket bandits for hire being miscounted as bandit guards in recruitment mention in Blackmarket Herald newspaper
Hiring Blackmarket bandits when you have a high public opinion (when you own the market) - https://i.imgur.com/JOEiTmv.png Hiring Blackmarket bandits when you have a low public opinion (when you own the market) - https://i.imgur.com/6R12o6d.png THE HOLY LAND (15 features) The holy land, a new hidden area added to the game with a few interesting things to do. Good luck finding it!
Added secret entrance hidden in the gameworld
Added clue to getting into secret entrance hidden near it
Added bard to the secret area with a newly recorded song
Added dynamic intro system to secret area with each of the 5 options having consequences
Added ability to be permanently blocked from the secret area
Added secret area entrance after blocked scene
Added ability to buy ale in secret area
Added ale prices in secret area vary depending on intro (1 gold, 2 gold, 3 gold)
Added ability to get ale for free
Added ability to hire bandits from secret area
Added bandit hire cost varies depending on intro (35 gold, 40 gold, 45 gold, 20 gold)
Added brawls in secret area
Added 15 random dialogues for locals
Added new character Bentha the Bad (and 10 dialogues)
Added new character Schwee the Tenfoot Tall (and 6 dialogues)
The new Tavern - https://i.imgur.com/Pch9Hrg.png Meeting a new character of consquence - https://i.imgur.com/09UDH52.png ADVENTURER'S QUARTER EXPANDED (3 features) Was playtesting and noticed the Adventurer's Quarter of the Artifact Market looking a little scarce so I've added two additional locations there.
Added Adventurer's Quarter Merc Post (random foreign merc units for hire)
Added New location Gralkar the Nameteller (tell you your name)
Added 3 random dialogues for Gralkar when spoken to
The Adventurer's Quarter looking a little more busy - https://i.imgur.com/Q1cliTh.png What's my name? - https://i.imgur.com/N0WVclt.png COUNCIL MEETINGS EXPANDED (21 features) While playtesting I noticed that asking about the wider realm was absent in council meetings, so I figured I'd add the ability, little did I realise how much I'd have to write, 3 different possible comments, from the 5 staff members, about the 4 different world regions... oof
Added new category of options in council meetings
Added 3 possible dialogues from Spymasters about the North
Added 3 possible dialogues from Jesters about the North
Added 3 possible dialogues from Diplomats about the North
Added 3 possible dialogues from Stewards about the North
Added 3 possible dialogues from Generals about the North
Added 3 possible dialogues from Spymasters about the East
Added 3 possible dialogues from Jesters about the East
Added 3 possible dialogues from Diplomats about the East
Added 3 possible dialogues from Stewards about the East
Added 3 possible dialogues from Generals about the East
Added 3 possible dialogues from Spymasters about the South
Added 3 possible dialogues from Jesters about the South
Added 3 possible dialogues from Diplomats about the South
Added 3 possible dialogues from Stewards about the South
Added 3 possible dialogues from Generals about the South
Added 3 possible dialogues from Spymasters about the West
Added 3 possible dialogues from Jesters about the West
Added 3 possible dialogues from Diplomats about the West
Added 3 possible dialogues from Stewards about the West
Added 3 possible dialogues from Generals about the West
This was a real trawl to add in, now you can ask about the different regions - https://i.imgur.com/auycyYY.png MONFORT MINE IMPROVED (15 features) After a suggestion for a little feature by u/TheSoundBoard I came across a number of issues with the mine, I ended up improving and fixing as many as I could.
Fixed 3 text bugs in Monfort mine descriptions
Fixed missing screen for trying to talk to mine guards if monfort mine owned by rival group
Added new screen for trying to put peasants in monfort mine but not having enough peasants
Added new graphic for various levels of miners being added or removed
Fixed monfort mine line graphic being too short
Removed useless screens from prospecting
Fixed 6 text bugs in prospecting screens
Fixed 0 peasants added to the mine screen
Fixed monfort mine peasant withdrawal bug
Added new screen for trying to remove more peasants than you have stored
Added mention of how many peasants join you when you collapse monfort mine instead of generic text
Fixed two text bugs in dried up monfort mine screen
Reworked collapsed monfort mine screen
Added random number of Harlaw miners join smallhaven population if you buy the mine (credit u/TheSoundBoard)
Reduced mine sound effect volume
THRONE ROOM TWEAKS AND ADDITIONS (31 features) Always happy to add more to the throne room, quite a few throne room bugs fixed and a bunch of new encounters and additions to existing ones.
Added new song for encounter where drunk man sings terrible song
Added new drunk throne room encounter 'More drunk than normal'
Added new drunk throne room encounter 'Day of drunkness'
Added new drunk throne room encounter 'Excuse to get drunk'
Added new drunk throne room encounter 'Pukes into hands'
Added new drunk throne room encounter 'Drunk army joiner'
Added 4 new alternate outcomes to hiring foreign unit into your army in the throne room
Added urine trouble joke from throne room wall peeing event happens only once
Added urine trouble event follow up if throne room wall peeing happens twice
Added urine trouble event follow up if throne room wall peeing happens for a third time
Added throne room tip on stewards when entering for the first time (Credit YES YES YES)
Added alternate throne room tip on stewards for games where you start with a low level throne room
Fixed 4 text bugs in man marrying carrot encounter and reactions
Fixed 2 text bugs in accepting foreign unit into your army via the throne room
Fixed fallen brothers throne room encounter blocked from appearing and instead showing blank text (credit JimmyL)
Fixed bug with soldier's mother donation throne room encounter incorrectly showing 500 and 50 gold payments instead of 200 and 20 (Credit TJTheSoundBoard)
Fixed text bug with beating throne room gambler out of all his gold
Fixed missing gold loss indicator when giving gold to gambler beggar in throne room (Credit TJTheSoundBoard)
Fixed abomination trap door event refers to last throne room visitor prior to abomination (Credit TJTheSoundBoard)
Fixed demon worshipper encounter reactions refer to the last throne room visitor prior to them (Credit TJTheSoundBoard)
Fixed missing line in abomination imprisonment encounter
Fixed 2 text bugs in Abomination throne room encounters
Fixed there is a great ruler throne room poem typo (credit Night_Shift_Sleepy)
Added missing indicator for musicians guild relation change when hiring bard in throne room
Fixed 7 text bugs with execution reaction in throne room
Fixed 2 text bugs in Blackmarket mercenary throne room encounter
Fixed issue with gold loss not being shown when hiring troops in Blackmarket mercenary throne room encounter
Fixed crown of mai option missing if you stop accepting visitors to the throne room
Fixed harlaw mining company seller throne room encounter trap door option not working
Made knight isn't seen or heard from again outcome to questing knight 25% more rare
Fixed refusing silver tongues services in throne room generates them a brand new face
TRIAL BY COMBAT IMPROVEMENTS (5 features) Thanks to TJTheSoundBoard mentioning an issue with trial by combat not showing prisoners gained if you refuse the trial, I ended up finding several issues and reworking the system a bit.
Added new graphic for trial by combat introduction
Added new screen for choosing to refuse trial by combat
Fixed refusal of trial by combat not showing prisoner loss (Credit TJTheSoundBoard)
Fixed some trial by combat outcomes being blocked
Made soldiers and knights fighting for you in the trial by combat labelled better to clear confusion (instead of knight vs knight, knight vs your knight)
NEW KINGDOM TYPES (6 features) I came across a new noble title I hadn't seen before which led me to discover some new, and remember some that weren't yet in game.
Added new kingdom type 'Kingdom' with ruler 'Kindins' and lord 'Warlord' available for any civ level (based on term used by the Goths in 4th century meaning judge, but described the position as "super-royal judge")
Added new kingdom type 'Realm' with ruler 'Shophet' and lord 'Hakham' available for civ level 4 and above (Old term used by several Semitic languages meaning Judge or community leader, Hakham meaning wise or skillful man)
Added new kingdom type 'Kingdom' with ruler 'Qore' and lord 'Warlord' available for Civ level 4 or above (ancient title for the king of Kush)
Added new kingdom type 'Hegemony' with ruler 'Hegemon' and lord 'Lord' available for Civ level 4 or above (ancient greek term referring to dominant city state over other city states)
Added new kingdom type 'Kingdom' with ruler 'Zilath' and lord 'Warlord' available for Civ level 4 or above (Etruscan term for the annual magistrate rulers)
Added new kingdom type 'Empire' with ruler 'Basileus' and lord 'Lord' available for Civ level 4 or above (greek term that signified king or emperor)
BUGFIXES (45 features) An astounding number of bugfixes here, thanks mostly to player suggestions and reports, thanks everyone especially u/TJTheSoundBoard, doing the lords work!
Fixed issue with using name unity law blocking you from being able to use any evil laws (credit u/skullxghost220)
Fixed text bug in songwood graveyard
Fixed set your origin cheat guide showing incorrect numbers for certain origins and not showing new slave revolt leader origin
Fixed text bug issue with cave beast
Fixed ability to send knight soldier or peasant to fight cave beast even if you don't have the unit
Fixed 2 bugs in gnome insult texts showing broken characters
Fixed 'exist' miswritten as 'exit' in custom game text (credit u/TheSoundBoard)
Fixed 2 text bugs in Blackmarket Herld recruitment text
Fixed Blackmarket Sudden death gambler in the central district not gaining new gold after a year ends when running out (credit u/TheSoundBoard)
Fixed 5 text layout and grammar issues with closed prison screens
Fixed musicians guild tribute being incorrectly displayed as scorpion fighters pit income causing duplicate (credit u/TheSoundBoard)
Fixed text colour bug in prison upgrades screen (credit Finderpath)
Fixed 6 grammar bugs with arena intro text (credit Cat)
Fixed text bug in silver cat statue description (credit Cat)
Fixed Miner dialogue text bug (Credit Cat)
Fixed bard imprisonment missing a line (credit TJTheSoundBoard)
Fixed boy turning into old man and rewarding you encounter incorrectly referring to all characters as king regardless of title choice (credit TJTheSoundBoard)
Fixed duplicate gold road guardians payment appearing in wage report in end of turn (Credit TJTheSoundBoard)
Fixed duplicate mercenary group wage reporting in end of turn report (Credit TJTheSoundBoard)
Fixed duplicate mercenary group quitting reporting in end of turn report (Credit TJTheSoundBoard)
Fixed all peasants or soldiers deserting you encounters blocking full desertion
Fixed rebels deserting and joining you encounter partially blocked from happening
Fixed Hyruk the Moneygrubber not giving you 2 gold coins post quest bonus (Credit TJTheSoundBoard)
Fixed court musician skill not changed by 495 cheat code (Credit TJTheSoundBoard)
Fixed spymaster wants to quit encounter not showing correct gold loss or staff loss indicators (Credit TJTheSoundBoard)
Fixed text bug with Spymaster accepting offer to remain with you
Fixed general wants to quit encounter not showing correct gold loss or staff loss indicators (Credit TJTheSoundBoard)
Fixed text bug with general accepting offer to remain with you
Fixed text bug with general refusing offer to remain with you
Fixed hiring mercenaries from Darkdale mistakenly showed post purchase text as if you hired the 3rd unit available from the foreign merc hall instead
Fixed tributes and taxes section spacing issue if player doesn't receive any harvest income
Fixed issue with Assurak demon worshippers not being tracked properly in save games (Credit TJTheSoundBoard)
Fixed issue with Lava pit sacrfices not being tracked properly in save games (Credit TJTheSoundBoard)
Fixed graphic for tavern brawl introductions
Fixed Rihhm relation bug not showing any peasants gained when recruiting from village
Fixed Blackrow tavern slaver missing space in text
Fixed you a bloodied man text bug in random event entering fighters district blackmarket (credit Night_Shift_Sleepy)
Fixed Goblinwood Jamboree event happens infinitely if you leave and come back to goblinwood on the year it happens (credit u/thebestroll)
Fixed Goblinwood Jamboree doesn't happen if you meet Goblinwood on the year of the event, now new screen added letting you know of the event and inviting you to it
Fixed bank interest rate being shown incorrectly as 100x less than it gives (credit Trafulgoth)
Fixed graphic error where knights would wear hats and a floating helmet above, now knights just wear helmets
Fixed bug where watching tournaments held by the arena owner if not you would earn you gold (Credit Defender and Night_Shift_Sleepy)
Fixed broken joke text for witch trial joke
Fixed text bug with musicians guild tribute text (credit u/TheGamingDictator and Night_Shift_Sleepy)
EVERYTHING ELSE (24 features) A ton of different stuff I couldn't fit in any other category here, new kingdom names, now the demon horde will totally destroy land and not have it terraformable to avoid a pretty easy solution to surviving the demon attacks, a new celebration year option, and tons more!
Made demon horde destruction of land completely ruins the land and does not turn it into a terraformable barren land
Added 5 new witch names 'Flemeth, Tamitha, Winnifred, Hagna, Hagtha'
Added ability to set custom celebrations to happen every 4-years (previously 2,3,5,10 etc) (credit u/themitchnz)
Added missing set of graphics to shutting down prison screen from within prison menu
Added new picture on cat wall of fame in Darkdale cat tavern (credit Night_Shift_Sleepy)
Added indicator of +1 musicians guild relation when entering during century festival special event
Reworked musicians guild relation system to be properly capped at 100 and -100 and added new indicators or max and lowest when relation changed (credit TJTheSoundBoard)
Reworked rebel desertion encounters to explain the reason for desertion is due to the size of the rebel army (credit u/Verminterested)
Reworked rebels deserting to join you encounter to explain the reason for desertion is due to the size of your army (credit u/Verminterested)
Added failed enlistment attempt text instead of 'You enlist 0 Peasants'
Added failed enlistment attempt text instead of 'You enlist 0 Soldiers'
Added indicator of Smallhaven population drop when you recruit local peasants
Added indicator of slums population drop when you recruit slum scum
Reworked slums scum hire screen to better display entering zero
Added indicator of Rihhm population drop when you recruit from Rihhm
Added indicator of Arasuk population drop when you recruit from Arasuk
Added indicator of Shaian population drop when you recruit from Shaian
Removed Aslona reference in Wall of love in Love cult camp (credit u/TheGamingDictator)
Added new human name 'Trafulgoth' (credit Trafulgoth)
Reworked Blackmarket treasury looted text (Credit TJTheSoundBoard)
A new cat worthy of note - https://i.imgur.com/zUHLg2m.png WHAT'S NEXT So now I will begin planning combat update basics and get myself prepared to dive back in to the earlier version of the new combat update code I got working on last year, It's been a long time coming and there's a lot of work to do but I'm going to try my best! Thank you so much for all the continued support and patience Hope everyone is doing ok and surviving! :) Cheers Huw
The Lineage 2 community is fairly small and always has been. This makes it a bit hard to relive nostalgia through communication or strong resources around the game and history. Some small efforts have been made to detail history of various servers, but I don't really see a ton of personal stories out there. While this is likely a complete waste of time, let me tell my own story with the game History I was introduced to L2 by a friend in the semi-early days of the game in the US. I believe we were in Chronicle 2 when I picked up the game. I joined him on the 'main' server Bartz, which typically had the highest population load. At the time, I believe there were 7 or so main servers for the US with varying degrees of involvement. Character I played a Bladedancer for around 3 years from level 1 to 80. I also second boxed another account. At the time, Gamestop was still selling physical copies of Lineage 2 for 15 bucks. Clan I was with several clans over the history of my L2 playing. As a support character, it was pretty easy to move around and find at least some success. I also played way too often (every night and weekend or so, for roughly a year or two). We would often have one of the more minor castles but never part of a clan that owned the likes of Aden and such (albeit, participating in castle sieges to help another clan achieve the taking, at times). Botting & Gold Buying This is one of the more interesting areas of L2. Everyone claimed to not bot and to not buy gold, but it was nearly impossible to get the best gear without some sort of assistance. This game was truly brutal as it came to leveling. I spent hundreds upon hundreds (or thousands) of hours grinding with clanmates over Teamspeak. Most of my individual leveling was done through my own effort. That being said, I definitely bought Adena at times from the various selling sites. Later in my playing, I setup my own bot train using the various tools available (L2Walker and such). I believe Lineage 2 source code was leaked, which allowed these companies to create tools that could be leveraged for botting. Once you saw how unfair the game was and how unfair other players played, it seemed the only natural thing to setup a bot train of my own. I would run them in areas that weren't as popular and didn't give the best rewards for combat, but were likely to still reap good rewards. One area of the market that wasn't cornered was seeding and harvesting. For some reason, bots didn't spend the time cornering this market in most areas. Even as a 'normal' player, you could beat the bots and other people to selling your crops back for very very high levels of expensive rewards (like bones/bone powder). At 7PM CST everyday, I would have an atomic clock open on my one screen with a windows L2 window on another screen. I would prep my harvests to sell and click 'sell' at the exact second. 90% of the time I would be able to sell everything. One second later, everything was maxed out and you could sell no more. This was my main way of revenue generation. It wasn't about building max level characters or getting adena and drops through combat, it was about seeding and harvesting. Eventually, botting became one of my favorite things about L2. Finding a place that wasn't visited often where you wouldn't be reported. Reaping wealth and timing the market with farming. Waking up and looking through your loot to see what drops your bot train received. Waking up to an alert that your bot train was under attack and reacting at 3am when I should have been sleeping for work. I still have PTSD from the bot attack alert I had (It was the mp3 of Brittany Spears 'Toxic' for some reason). That song still reminds me of this almost 12 years later. Accounts would be banned here or there, but largely they would be left alone. Moderation Moderation was a constant complaint on the forums. Users would complain about bots and how nothing was done about them. I used to be one of these people that would complain constantly. After six months of initial play, I realized that the majority of paid customers were monthly bot accounts and that it served NCSoft to not ban bots. Of course, they had to put up a token level of resistance to keep people quasi-happy. I would have bot trains banned every now and again, but very infrequently. They knew who paid the bills and the bots also understood that you needed to let NCSoft ban from time to time and buy a new license and start fresh. It was just part of the give and take of the economics of an extremely grind-heavy game. While some people never botted or thought of botting, a vast majority benefited from buying gold or botting themselves. It was also interesting to see price inflation as the economy was open and money was infinite. Over Enchanting One of the other best and worst parts of the game was the enchantment process. From enchanting 1 to 3, you were safe with 100% chance. At each enchantment after, you had a 66% chance of failure everytime. If you failed, your expensive item would be turned into much less valuable crystals...by millions upon millions of Adena, in most cases. After many attempts, I was able to get my B level weapons to +12. The gamble of clicking that button and seeing a success or failure was addictive in and of itself. The game did a good job of showing off your items by making them glow based on their enchantment level. An important thing in MMOs is to have skins and differences to make characters stand out. A lot of modern games like Fortnight understand this. It's all about differentiating yourself from others and having what others want to have. It's basically capitalism and jealousy put into a game format. Castle Sieges Castle sieges were probably the most dramatic and exciting part of the game. I think this is where the true beauty of Lineage 2 stood out. Having clans work with each other, betray each other or overcome a much greater power to take over castles and all taxes of the regions associated. Sieges and the Clan system were very different from other games. You could buy a very expensive clan hall to speed up HP and MP regeneration as well as enhanced status for your clan. The amount of fun and crazy drama from sieges and wars were so much at the crux of the game. I can't overstate how fun it was to take a castle over and enteleave at your leisure and look over the lands you own with all the other characters running around in town. SoulShots SoulShots were another interesting idea. They used a finite resource to make your attacks more powerful. This was an important way to have resources spent in the game and then dispersed without additional value. I believe they didn't exist in C1 and they added in C2 to help the issues with the economy and scale of inflation. Griefing L2 was one of the few games that you could truly grief people and have a great amount of risk and reward around it. You could kill anyone you wanted in the world. If you were at war, it wouldn't count against you (and the killed player would lose XP, an extra kick in the balls). If you weren't at war, you would change to a color that would allow anyone to attack you. They would also change to that color, so someone had to really think they could win if they wanted to fight back. You could also continue to attack and 'go red' once you killed a player. Going red forced town guards to attack you and to allow other people to attack you at their leisure. If you died, you had a chance of also dropping weapons or armor, which was a huge risk and a huge loss if you did. Also, in general, if you died fighting monsters, you had a chance of dropping armor or weapons, which could be a catastrophic loss, depending. Looking Back Lineage 2 was a very specific type of my life. I was depressed, eating junk, drinking Mountain Dew and working a level 1 HelpDesk job at 25 years old. It did give me a sense of purpose and community, but I also have to realize that it deteriorated my real life friendships and really kept me isolated from my friends and family. I do think it helped me get through a dark time in my life but I also think it's part of the reason that dark place existed in general. It's a perfect reason to not spend thousands of hours on any single game. When I look back at it, no one cares. All the hours I spent playing this game didn't really mean much in the end. The servers may or may not be there, the characters and people have all moved on. The character has no real life value or interest to anyone else other than myself. The journey certainly had some value, but I think MMORPGs can be just as addictive as anything else. They often provide a distraction from real problems and real life vs helping you live a fulfilling life that 'matters'. Like most things, addicts come out at the end and look back with some level of regret. As it goes, I typically play single player games or local games on my PC...I know my taste for addiction and I don't think I'll ever go back. Some 11 years down the road, I'm engaged, successful and have a good life filled with dogs and travel and enjoyment. Times do change and it was worth getting out of it. Anyway, I hope someone enjoys these thoughts.
Gambling Winnings A payer is required to issue you a Form W-2G, Certain Gambling Winnings if you receive certain gambling winnings or have any gambling winnings subject to federal income tax withholding. You must report all gambling winnings as "Other Income" on Form 1040 or Form 1040-SR (use Schedule 1 (Form 1040) PDF), including winnings that aren't reported on a Form W-2G PDF. When you have gambling winnings, you may be required to pay an estimated tax on that additional income. For information on withholding on gambling winnings, refer to Publication 505, Tax Withholding and Estimated Tax. Gambling Losses You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized Deductions." Recordkeeping To deduct your losses, you must keep an accurate diary or similar record of your gambling winnings and losses and be able to provide receipts, tickets, statements, or other records that show the amount of both your winnings and losses. Refer to Publication 529, Miscellaneous Deductions for more information.
Sports Gambling and Taxes. Sportsbook includes principal in winnings
For taxes, I know that I need to report my gambling winnings, but I am wondering if the principal can be subtracted from the total 'win.' In short, the book shows that I have 12k in winnings because it includes the amount wagered in the win. However, when going through all of my transactions and subtracting out the initial outlay, my total winnings come out to roughly $5,000. For tax purposes, do I need to report the $12,000 or $5,000? To give an example, I bet $101 to win $100. The sportsbook claims this as a $201 win, but in reality I have only won $100 when subtracting the bet amount of $101 And then a small side question if it is the case that I should report only the $5,000: how do I deal with "cash outs" that resulted in a loss. i.e. I bet $100 on a game, but cashed out to 'win' $50. Is that considered a win or a loss?
This is a long review about Option Alpha. I tried to post this on Investimonials but that website was glitching so here it is on Reddit. I'm not riffing here on Option Alpha but trying to provide an unbiased review to the community. Hopefully this helps someone make a better decision before they part with their hard earned money. A lot of people are getting into options, whether its theta gang or long directional option trading. My warning to everyone is that don't necessarily fall for option trading services/rooms specially when they don't list an accurate trade log and PnL account performance. This review below here is more applicable to the Theta gang option traders/option sellers so if you are a option buyedirectional optional trader than this review won't apply to you. Here is the TLDR - At the very best if you want very low single digit annual returns while taking huge risks and want to take the headache of making 100s of option trades, spend tons on trading commissions and subscription fees ($100 to $300 per month), waste time making option adjustments and then create a tax headache paying short term capital gains tax rates (your highest income tax bracket) on profits and filling out IRS forms at the end of the year then this is the service for you. Also the return on your time spent understanding option alpha and then implementing its strategies is negative. Normally I would not write reviews unless I thought that subs were getting ripped off. Let me start of by saying that I don't think Kirk (the founder of Option Alpha) is running a scam per se, but he is basically bilking gullible subscribers who are very new to options trading and have been sold the dream about option selling as the ONLY proper way to make money in options. This service is a total waste of time for the individual investor. The last few years the returns have been flat after all these trades (basically up a few % or down a few %). This is before accounting for option commissions, and taxes (selling options ie. premiums are always taxed as short term capital gains at your highest income tax rate so you get no benefit vs holding stocks or buying options over 1 year) and subscription fees. Accounting for all this basically makes this a negative return. In fact I think it is better to buy a balanced Vanguard index fund or VTI etf and just Dollar cost Average into that every month vs using this system. Atleast with VTI you can expect to make 6% over the long term. The simplest strategy which is to buy VTI etf will beat Option Alpha over the long term with fewer headaches and invested time and energy. Let start of with the good stuff first. The option education videos are free, extremely well made so that even total beginners can understand option selling. Kirk is a gifted teacher and explains everything in simple language. If you are a complete beginner than these videos will help. Things I learnt that are useful - adjusting losing positions and how to beta hedge. However they don't get deep into the intricacies of options that professionals worry about. The education is totally biased towards option selling strategies. They try to sell the Option Alpha system (where you are a net seller of options) to the subscriber as basically running a an insurance business or creating your personal casino where you make 100s of trades ever year to eke out a small premium for taking on the risk. They then go on to basically sells you the system as being better than buying and holding ETFs or stocks over the long run and - how option buying doesn't work 80% of the time and how buying and holding stocks is riskier than selling option premiums. This is all good in theory. But in practice it reminds me of this quote - "In theory, theory and practice are the same. In practice, they are not.". In reality, what they don't talk about is the fact that the success of option selling relies on harvesting variance premium in the option markets (historically around 3% or so). Unfortunately in recent years the variance premium has at times declined to negative levels. The sign for VRP can flip positive to negative for different underlyings and is not always positive every single month of the year. So making money with this system is basically entirely dependent on luck. Atleast the stock market tends to grow over the long term with earnings growth and GDP growth, but there is no guarantee that this will be the case with variance premiums which could be permanently arbitraged away by option sellers and brain dead option selling strategies such as Option Alpha. Option selling has to be done smartly or not at all. The basic system is this: Naively diversify by selling wide Iron butterflys/condors (this is the bread and butter trade about 80 to 90% of all trades) or credit spreads (about 10% to 20%) on these sector ETFs - SPY, TLT, XOP, XRT, EEM, OIH, FXI, XLP, XBI, GLD etc. Sell options about 30 to 45 days to expiration. I say naively because whenever markets crash everything goes down together so infact naive diversification is really di-worsification. Never have more than 5% of risk in any one ETF. They like to start out trades with a 1% to 2% risk per position and then scale in as adjustments are and will be needed. Good luck following this strategy if you have a small account as you will be taking greater risk. Then do this every single month or so without regard to broader macro conditions or IV levels or trend. Doesn't matter what EEM is doing or FXI is doing. Does Option Alpha look at price action, fundamental analysis, news flow, macroeconomics etc or anything else at the individual ETF level? No it doesn't appear they do. If and when positions move against you (which they regularly do) then waste time adjusting your positions and tracking credits to prove to yourself that you did make a tiny profit. They try to center the strikes as the underlying moves with adjustments and additional scaling in positions but honestly it doesn't work over the long term. At the end of the year after 100s of trades (6 to 10 etfs x 4 (assume butterfly or condor) x 2 (opening and closing) x 10 (every 35 to 45 days) = assume 600 trades per year not including the adjustments and additional scale ins that will be needed), subscription fees (between $100 to $300 per month), broker commissions, pay short term capital gains and then waste additional time filling out dozens of pages of IRS forms with the 100s of option trades all to make a small single digit low annual return if lucky. The thing to understand is this, with option selling you generally risk $3 to $4 for every $1 of gains. So you can have 3 winning trades and then the 4th one will blow up profits. To counter this, they will show you how to make adjusting trades (only one side of the butterfly is underwater, so the whole position can be adjusted) or scale in so that strikes are centered around current underlying price. Even after adjusting which is not a guarantee of profits, the overall the results are just extremely lame. If you refuse to adjust positions it will be impossible to make any profit with this system. This is not to say other option selling strategies don't work (there are some that can work but they require a true edge) but its just that Option Alpha doesn't work. The free Theta gang on reddit or discord probably does a better job than OA. As such there is nothing even remotely proprietary about Option Alpha. There is no edge. Because there is always a risk that all positions can simultaneously lose money in a crash as all assets trade downward, so Option Alpha advises that only use 40-50% of the account value for option selling and keep the rest as cash as a hedge against blowing the account up. Recently they advised having a 1% long VXX calls positions to hedge black swans/market crashes which I think is an improvement over the system of past few years. I personally think that selling this system to gullible retail subscribers is extremely irresponsible. You can argue that option selling has a place within pension funds or other entities that have a lot of money who need yield income tax free and who have a proprietary system with an edge that can makes better risk adjusted profits but Option Alpha is basically gambling and praying for profits. If selling options is so good, how come I have not heard of a single Hedge fund that only does this with 100% of their capital? There were some crooks in Florida who blew up one fund that was selling energy options (you can look up Optionseller.com on google - website is defunct now). I'm not saying Option Alpha is pursuing similarly risky strategy since these are all defined risk trades and they do ask to hold 50% in cash. But it is conceivable that you can lose 100% of the amount you have put into selling options - that is the other 50% of the portfolio under a true black swan scenario. Maybe making adjustments etc will save the portfolio but its not really a guarantee. Btw the stock market can never goto zero. We can get another market crash and yes it could take a long time to recover but it can never goto zero (the businesses underlying these stocks have real value unlike options/derivatives). With stocks you have time to sell even with a 10% gap down overnight. Options will get blown up much faster. This strategy is not at all the best way for the individual investor to invest. The only market where this system works is even Implied volatility is high ( so that you get extra compensation for selling time decay) and the market moves sideways. However in practice the market is either steadily marching higher and IV is low, or IV is so high (that you get a decent premium) but the market is rapidly moving in either direction so you will endlessly keep adjusting positions or keep taking losses. Options are complicated instruments and if you don't understand vol skew, statistics and probability, option greeks properly and can't backtest with good data than it is literally gambling and praying for profits. There is a real risk that naive option selling can blow up accounts. Option selling only makes sense in certain market regimes and only when done smartly. To tell retail traders that they should trade this way all the time for the rest of their life is extremely irresponsible. Here is the thing. What I'm mad about is that Option Alpha has spent all this time very aggressively marketing this system and spent the last few years trying to develop an autotrading platform. It has been recently launched in Beta mode if you upgrade to lifetime membership for $2000-$2500. My hope is that the autotrading system will work and not blowup accounts due to software glitches like the Knight Capital software glitch fiasco in 2010. I think they know these strategies don't work. The website claims that there have been 200k people who have signed up. I think at any given time they have 1000s of subscribers who come and go. If we assume 4000 subscribers per month at avg of $100 per month is $400k per month or $4.8 million per year. This is better than a lot of smaller hedgefund managers. For Kirk's own account, it appears that he trades a $300k portfolio, but his main source of income is selling Option Alpha subscriptions and doing real estate investing. How come his account is not millions of dollars now after almost a decade? But still around 300k? The simple reason is this doesn't work and instead he invests his income from Option Alpha subscriptions into other things/real estate investing etc. The founder of OA has institutional experience trading and as such I would have expected him to focus on improving trading performance, creating new strategies, backtesting etc, interacting with members, rather than selling snake oil promises. There isn't enough skin in the game. Option Alpha has forums where members can talk to each other and there are probably some legitimate strategies there (none are based on the Option Alpha) developed by members. But the OA founder has been completely AWOL last few years. Zero participation. Zero time trying to refine or improve his strategies on Option Alpha. They could have hired professional optional traders or even subscribed to institutional level stuff to help them out but no they have been focused entirely on making money. There are other free blogs and similar option newsletter services which also trade condors and butterflys which have shown much much superior results, however OA refuses to adapt their strategies or spend any time engaging with members. The focus has been on scaling the business and selling promises about the new autotrading system. I think the founder has realized that this Option alpha is going nowhere and so has decided to pivot into autotrading. Gullible retail investors have been financing the build out of this service it seems. Want another proof of what I'm saying? You can sign up for free membership and see the performance section. First the performance section does not tell you the performance from one year to the next. The only thing you can see is the meaningless numbers such as avg profit and loss on different option selling spreads and win rate. It is impossible to reconstruct PnL performance from these metrics. I think this is very misleading. Even Motley Fool shows their performance for their $100 per year newsletter. Almost any good newsletter and or trading/membership service shares performance/trade log for the past few years. If this is just about education then charge only for educational videos and don't have trade alerts and monthly membership/weekly elite calls etc. Another note on some of the enhancements they up-sell on the website. The tools are almost totally useless. The backtester sucks. The scanner sucks. The forum is basically impossible to use properly. The research reports (each priced at $400) are not worth the money. Let me summarize the technical indicator report - use commonly used oscillators that everyone knows already at a medium term time-frame and buy at oversold condition and sell at overbought condition. I mean C'mon everyone already knows this. Does Option Alpha appear to use this research - nope! The profit matrix report will tell you that there is no limited-loss option selling strategy that produces a CAGR (compounded annual growth rate) above a low single digit return. Not a single one. This is not surprising since the variance premium per academic research is around 3 to 4%. Shouldn't this be disclosed to regular subscribers instead of asking them to pay another $400 bucks? Covered calls research report - sell short dated deep OTM calls. Viola! There is no actionable information in these reports. These reports are a few years old and the information is not updated. The reasonable price for such reports should have been $20-$30 not $400. You can even find REITs or dividend paying stocks that have a higher yield than than option alpha strategies. In fact I'm not even confident if Option Alpha has used proper back testing methodology and not made mistakes. You will learn more spending this money on a proper backtesting website that professionals use. Even Seeking Alpha and Reddit have better options strategies articles for free. A lot of academic research is available for free. Tasty Trade has similar trade ideas for free. The bottom-line is that Kirk is not a skilled trader. And has made no effort to improve or adapt to the market environment the last few years. All effort has gone into growing the business and up-selling membership with very aggressive sales tactics. He is a master salesman so be careful. Its really the case of the blind leading the blind. Just blindly sell options every month without any edge and charge big money for it without any real view about the direction of the underlying or IV. Just to be clear I do not have unrealistic expectations from a newsletter service/system. If I'm subscribing to an expensive service than I expect that I should have a reasonable chance to make greater than 10% on my account annually. I'm not expecting 100% nor even 20% - just a reasonable 10% to 20%. The best thing about OA is the free educational videos and the podcast. Use that and skip the paid services. Time will tell if the new autotrading pivot will work well and I would suggest waiting until it is proven to work.
NJ Filing Question - Married Couple and Gambling Winnings
I normally use turbotax or alternatives to handle my taxes each year. My wife and I have always filed jointly and this was never a concern. However, this past year she had some gambling wins and losses that caused a bit of an issue on my tax return and was hoping for some feedback. She is a stay at home mom with $0 income. In 2020 she won on some gambling sites approximately $7800 this was all lost on the same sites gambling but that includes winnings that past the $1200 threshold where it is a tax event. I attempted to simulate how the numbers would look and if we file jointly and I report these winnings on our return, we end up owing $1711 after reporting the losses. If we file separately, and she reports these winnings as her only income then it shows she will owe $0. That is pretty nice savings so it seems to be a no brainer. I just wanted to get some feedback if I am overlooking something. I know we will not be eligible for certain tax credits but it is hard to imagine at this point that those would outweigh this amount. Additionally, when you file separately do I just claim myself and our two kids on my return and she claims herself on hers (in terms of dependents)?
Hi. Just want to start and say I've already looked in the stickied crypto wiki and did not find my answer(https://www.reddit.com/PersonalFinanceCanada/wiki/cryptocurrencyandtaxes?utm_source=share&utm_medium=ios_app&utm_name=iossmf). This is my situation/question in a nutshell. Let's assume I bought 5 BTC when they were $10,000 CAD for simplicity's sake. This cost me $50,000. I moved this BTC to a crypto gambling site. I gambled with them on this site. I bet 1BTC, lost the bet. I did this three more times and am now left with 1BTC. I gamble this last 1BTC and turn it into 20BTC out of sheer luck. I move these 20BTC off of the gambling site. Let's assume you then sold them and the price had moved to $11,000 in that time. Gambling winnings, so long as they're not your primary source of income, are not taxable in Canada. How does it work when crypto is what you're gambling? I see a few weird situations, but none of them make total sense: You bought 5BTC at $10,000 each for $50,000 total. You sold 20 at $11,000 each for $220,000 total.
Your 5BTC realised $5,000 total capital gains. Your other 15 BTC you won when they were worth $10,000. Since they gained value of $1,000 each since you attained them, even though the crypto winnings themselves aren't taxable, you realised $15,000 taxable. All in all you pay tax on a $20,000 gain and the rest is yours.
You lost 4BTC. You now have a theoretical loss of $40,000. You win 19BTC. You sell similarly to above. You pay tax on $19,000 for the $1,000 value increase since you won the coins. You... claim a loss of $39,000 for the rest? You claim a gain of $1,000 instead of the $39,000 loss?
Gambling winning and loss exemption doesn't count for crypto. You straight up have a gain of $170,000 and need to claim it.
Other possibilities? I'm so confused about this situation. Help? :)
Wall Street Week Ahead for the trading week beginning October 19th, 2020
Good Saturday morning to all of you here on wallstreetbets. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead. Here is everything you need to know to get you ready for the trading week beginning October 19th, 2020.
More volatility is likely ahead as rising cases, lack of stimulus overshadow strong earnings - (Source)
Another volatile week may be in store for traders as coronavirus cases rise in the U.S. and Europe while Democrats and Republicans remain at an impasse over new fiscal aid. The Dow Jones Industrial Average and S&P 500 fell for three straight days this week. That slide was the longest losing streak for the averages since mid-September. The two market benchmarks eked out slight gains on Friday to snap their losing streak. Investors and traders expect this choppy trading action to continue, especially as the worsening coronavirus data and a lack of U.S. coronavirus stimulus draw attention away from a strong earnings season thus far. “The combination of no stimulus, fading economic momentum, and the threat of rising coronavirus cases, creates a rather negative dynamic for risk assets right now,” said Tom Essaye, founder of The Sevens Report, in a note to clients. The seven-day average of new daily coronavirus infections has risen in 39 states, including New York, New Jersey and Wisconsin, according to a CNBC analysis of data from Johns Hopkins University and the U.S. Census Bureau. At the nationwide level, the rate of new daily cases is at its highest level since August. In Europe, the seven-day average of new Covid-19 cases has surpassed that of the U.S., leading several countries in the region to reinstate tougher social distancing rules and roll back previous reopening measures. “What this means is economic activity may slow down a bit, and we’ve already started to see some of that in the data,” said Art Hogan, chief market strategist at National Securities, noting the weekly jobless claims numbers released Thursday show they’ve reached a point where “they’re not going to get better; they’re going to get worse.” The Labor Department said initial U.S. jobless claims hit their highest level since August, reaching 898,000 in the week ending Oct. 10. Investors will also keep their eyes on Washington during the week ahead as lawmakers continue to struggle over new U.S. fiscal stimulus.
Political posturing on stimulus ‘hurting’ those in need
This week, President Donald Trump said he would raise his offer for a coronavirus aid above the current level of $1.8 trillion. The White House’s current offer is smaller than a $2.2 trillion package passed by the House. House Speaker Nancy Pelosi, D-Calif., has said the administration’s proposal “falls significantly short” of what is needed. This back and forth between the two parties has dwindled expectations among market participants of a compromise being reached before the Nov. 3 election. It has also added to the concerns surrounding the U.S. economic recovery. “This political posturing is hurting that cohort of the economy that needs help the most,” said Quincy Krosby, chief market strategist at Prudential Financial. “To the small and mid-size business owner, the airlines, this is not just about politics; this is every day life. There going to be an impact in the real economy if we don’t see something now.”
Earnings season ignored?
Those talks over further stimulus are also expected to divert attention away from the corporate earnings season, which began this week but had next to no impact on the broader market. Procter & Gamble, Netflix, Travelers, American Airlines and American Express are among the companies slated to report next week. JPMorgan Chase, Goldman Sachs and VF Corp. are among the 49 S&P 500 companies that posted their latest quarterly results this week. Of those 49 companies, 86% reported better-than-expected earnings, according to data from The Earnings Scout. “I wish I could say that next week we’re going to put aside the politics and the Covid concerns behind us, but we won’t trade this earnings season,” said Hogan of National Securities. “While it will likely be a record-breaking season for companies beating estimates, it’s also going to be one that is largely ignored because there’re so many other macro factors that are more important.” There is also some important housing data in the week ahead, including home builders’ sentiment Monday, housing starts Tuesday, and existing home sales Thursday. “The housing market is still off to the races,” said Mark Zandi, chief economist at Moody’s Analytics. “The mortgage applications were strong, suggesting very strong activity in the month of September.” Zandi said the market will eventually cool when interest rates begin to rise. But for now, “certainly the economy could use the juice.”
This past week saw the following moves in the S&P:
There are many charts that caught our attention this week, and today we share the top 5 charts we’re watching. The S&P 500 Index recently had a four-week losing streak and fell nearly 10% along the way, while the Nasdaq and many large cap tech stocks fell even more. Then in a big move higher over the past two weeks, many stocks moved from oversold to overbought in a very quick timeframe. As the LPL Chart of the Day shows, more than 90% of the components in the S&P 500 were beneath their 10-day moving average on September 24 and within two weeks saw more than 90% above this short-term trend line. This type of buying thrust is consistent with future strong returns, suggests quick reversals from oversold to overbought are a good thing, and could bode well for stocks to outperform bonds well into 2021.
Parts of the economy are opening back up, while employment continues to disappoint. One specific area that continues to improve is how many people are flying, as the seven-day average number of travelers going through Transportation Security Administration (TSA) checkpoints hit a new recovery high. We discuss other high-frequency data points in our COVID Surge Stalling Europe’s Recovery blog.
We’ve noted before that stock market gains ahead of the election historically support the incumbent party, while if stocks are lower it tends to support new leadership in the White House. Taking this further, the US dollar also tends to send signals for who might win. In fact, when stocks are up and the US dollar is lower ahead of the election, or if stocks are lower and the US dollar is higher before an election, the results have accurately predicted the last seven times those scenarios took place. Given stocks are up and the US dollar is slightly lower, this could be one clue the upcoming election will be much closer than many are expecting.
Sticking with the election, many investors are worried about higher taxes and more deregulation if former Vice President Joe Biden wins. “Higher taxes may be one part of it, but Biden is also looking at huge spending initiatives,” explained LPL Financial Chief Market Strategist Ryan Detrick. “Stock markets like spending, and this could more than help offset potentially higher taxes.” Lower tariffs could potentially provide another offset as well.
Last, Friday’s retail sales report came in better than expected, marking five consecutive months of year-over-year gains. It is worth noting the economy has never been in a recession after 4 or more consecutive monthly gains. Still, in the face of one of the most severe recessions ever, it took only a few months for sales to get back to new highs, as shown below. Historically, new highs in retail sales happen in expansions—and this is yet another clue the recession is likely over.
Record Surge In Business Formations As Economy Recovers From COVID
Yesterday the Census updated business formation stats for Q3, and as indicated by high-frequency data from the Atlanta Fed, business formation exploded in Q3. As shown in the first chart below, total business applications rocketed upwards by 1.57 million, a record increase. Stripping out businesses that are unlikely to result in hiring, the numbers are much smaller in absolute terms but still rose 79% to a record pace. Finally, applications for businesses with planned wages surged 70% from a record low in Q2, to the highest levels since 2008.
In all three instances, the recent behavior is a complete reversal of the post-Financial Crisis period, when the prolonged recession led to a huge decline in business starts. That’s a good sign for the breadth of the economic rebound, as business formation tends to lead to higher productivity thanks to more innovation and investment. Below we show changes in total business applications by state; Michigan, Illinois, and Georgia are the biggest winners, with applications more than doubling. This analysis was originally published in our evening report -- The Closer -- on 10/14/20.
After a disappointment last month, Retail Sales saw a nice rebound in September as consumers seem undeterred from spending despite the expiration of extended UI benefits and the lack of an additional stimulus bill. For the month of September, headline Retail Sales rose 1.9% m/m versus expectations for a more modest increase of 0.8%. Ex Autos and Gas, growth was even better relative to expectations, although August’s already slower than expected growth was revised modestly lower. Breadth in this month’s report was strong. Of the thirteen sectors that comprise the total pie, all but one of them (Electronics and Appliances) showed growth. Normally, when a sector shows m/m growth of a percent or two, it’s impressive. This month, though, the volatility of the pandemic remains in place as two sectors showed growth of over 5%, including Clothing which saw double-digit growth relative to August!
While the monthly pace of retail sales is back at all-time highs, the characteristics behind the total level of sales have changed markedly in the post COVID world. In our just-released B.I.G. Tips report, we looked at these changing dynamics to highlight the groups that have been the biggest winners and losers from the shifts.
University of Michigan Mixed Again
The University of Michigan reported preliminary consumer sentiment numbers for October. University of Michigan data has shown a much smaller bounce than other sentiment surveys, but the preliminary numbers for October did increase versus September. The strongest part of the survey was expectations, which has risen three months in a row to the highest levels since March. Consumers' current assessment of the economy fell sequentially and is sitting at about the same place it was back in early 2012.
One feature of the University of Michigan poll with incomplete data prior to 2016 but more complete data since is a breakout of economic sentiment by political party affiliation. As shown below, their data shows Republicans getting a massive sentiment boost in the wake of the 2016 election. The key here though, is that the boost to the sentiment of Republicans and the decline for Democrats came after the election as this data is definitely lagging to political outcomes rather than leading.
Sentiment among small businesses continued to improve in the month of September according to the NFIB's monthly Small Business Optimism Index. As shown below, the index rose 3.8 points to 104 which is now just half of a point below the levels prior to the pandemic in February. That was also better than expectations of a smaller improvement to 101.2. Small business sentiment has now risen in four of the past five months.
In the table below, we break down this month's report by each of the ten components of the headline number as well as the many other indices included in the report such as those not used as inputs to the headline number and what small businesses are reporting to be their biggest problems. Across all indices of the September report, breadth was solid with only a couple of indices falling month over month—Expected Credit Conditions and Credit Conditions Availability. Some of those that were higher saw record or near-record month-over-month increases. Some of the most notable indices this month included those regarding inventories. The Current Inventories index which gauges the net percent of owners viewing current inventory levels as too low rose 2 points to a record high reading of 5. Given this, the index for Plans to Increase Inventories is tied with the reading from November of 2004 for a record high of 11. Indicating low inventory levels, the report is consistent with some other recent data like the regional Fed manufacturing surveys. Those low inventories are resulting in higher prices as that index's 12-point increase in September marked the biggest one month gain on record. While the Higher Prices index is not at any sort of an extreme, September's move indicates that a rising number of businesses are raising prices. Additionally, those higher prices and lower inventory numbers appear to be a result of demand that continues to rapidly improve. The indices for Actual Sales and Actual Earnings Changes remain negative for a sixth and tenth month in a row, respectively, meaning a net number of businesses continue to see lower rather than higher top and bottom-line numbers. But these indices are seeing big moves higher. For the index of Actual Earnings Changes, the 13-point climb in September was the largest on record and the 9-point increase for Actual Sales Changes followed a 13-point increase in August; both being some of the largest one-month moves on record. In order to meet the needs of this demand, a higher number of businesses plan to increase employment with that index rising to 28; the highest level since December of 2018. Even though businesses seek to hire more, they also report it is hard to fill positions as the index of Job Openings Hard to Fill rose to the top 5% of all readings. Cost and quality of labor also were reported as two of the most pressing problems for businesses.
In an earlier post, we highlighted the details of the September NFIB Small Business Optimism report. The report showed overall sentiment among small businesses has continued to improve as demand has bounced back (though it has not yet fully recovered as still more businesses report lower sales and earnings on a net basis) leading to low inventory levels, higher prices, and a need for more employment. While generally improved conditions have lifted optimism, that is not to say small businesses have given an all-clear. The Uncertainty Index from NFIB has risen each of the past three months with September's 2-point increase bringing it back to the same level as March of this year. In other words, it is perhaps best to say that small businesses are cautiously optimistic.
From the pandemic to the Election, there are plenty of reasons for businesses to be uncertain. As for what they are reporting to be the biggest problems, labor remains at the top. 30% of businesses have reported that either cost (9%) or more predominately quality (21%) of labor are their biggest issues. While off the highs from the past few years, the current readings are still historically elevated. Behind labor, government related problems also are largely on the minds of business owners. Government red tape and taxes combine to account for 29% of businesses' biggest problems. While that is a large share, neither of those indices are at any sort of extreme. Poor sales, on the other hand, remains as the third major concern for businesses. 12% of businesses reported poor sales as the single most important issue in September, down from 15% in August and 7-percentage points lower than the April peak. While improved, the number of businesses seeing demand as a major issue is still at some of the highest levels of the past several years.
Below is a look at the year-to-date reading for the high-frequency Morning Consult daily consumer sentiment indicator. While still well off highs seen prior to the COVID Crash in late February and early March, sentiment has generally been ticking higher off the lows. You'll notice in the chart below, however, that while the "Future Expectations" reading is still bouncing back nicely, the "Current Conditions" reading has been going more sideways over the last couple of months.
We can also look closer into state level readings from the daily Morning Consult sentiment numbers. In the heat map below, we show the changes in the levels of consumer sentiment for each state since mid-February. As shown, the lower 48 have seen much larger improvements than Alaska or Hawaii with the largest improvements coming in the Northeast and parts of the Midwest. On the other hand, in addition to Hawaii and Alaska, some of the key swing states like Maine, New Hampshire, and Nevada have improved the least. Of all 50 states, Vermont's current reading on sentiment is the closest to its February levels, but even Vermont is still down 17.9 points.
Below are some of the notable companies coming out with earnings releases this upcoming trading week ahead which includes the date/time of release & consensus estimates courtesy of Earnings Whispers:
([CLICK HERE FOR FRIDAY'S AFTER-MARKET EARNINGS TIME & ESTIMATES!]())
(NONE.)
Tesla, Inc. $439.67
Tesla, Inc. (TSLA) is confirmed to report earnings at approximately 4:25 PM ET on Wednesday, October 21, 2020. The consensus earnings estimate is $0.56 per share on revenue of $8.20 billion and the Earnings Whisper ® number is $0.82 per share. Investor sentiment going into the company's earnings release has 70% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 68.36% with revenue increasing by 30.10%. Short interest has increased by 309.2% since the company's last earnings release while the stock has drifted lower by 73.8% from its open following the earnings release to be 93.2% above its 200 day moving average of $227.62. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, October 14, 2020 there was some notable buying of 24,439 contracts of the $500.00 call expiring on Friday, October 23, 2020. Option traders are pricing in a 10.9% move on earnings and the stock has averaged a 8.9% move in recent quarters.
Netflix, Inc. (NFLX) is confirmed to report earnings at approximately 4:00 PM ET on Tuesday, October 20, 2020. The consensus earnings estimate is $2.12 per share on revenue of $6.38 billion and the Earnings Whisper ® number is $2.19 per share. Investor sentiment going into the company's earnings release has 67% expecting an earnings beat The company's guidance was for earnings of approximately $2.09 per share. Consensus estimates are for year-over-year earnings growth of 44.22% with revenue increasing by 21.64%. Short interest has decreased by 14.3% since the company's last earnings release while the stock has drifted higher by 7.3% from its open following the earnings release to be 23.1% above its 200 day moving average of $431.11. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, October 16, 2020 there was some notable buying of 5,864 contracts of the $550.00 call expiring on Friday, October 23, 2020. Option traders are pricing in a 10.1% move on earnings and the stock has averaged a 4.5% move in recent quarters.
Procter & Gamble Co. (PG) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, October 20, 2020. The consensus earnings estimate is $1.43 per share on revenue of $18.21 billion and the Earnings Whisper ® number is $1.49 per share. Investor sentiment going into the company's earnings release has 68% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 4.38% with revenue increasing by 2.31%. Short interest has decreased by 17.9% since the company's last earnings release while the stock has drifted higher by 10.5% from its open following the earnings release to be 16.7% above its 200 day moving average of $123.73. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, September 25, 2020 there was some notable buying of 1,880 contracts of the $140.00 call expiring on Friday, December 18, 2020. Option traders are pricing in a 3.3% move on earnings and the stock has averaged a 2.5% move in recent quarters.
Intel Corp. (INTC) is confirmed to report earnings at approximately 4:00 PM ET on Thursday, October 22, 2020. The consensus earnings estimate is $1.10 per share on revenue of $18.21 billion and the Earnings Whisper ® number is $1.19 per share. Investor sentiment going into the company's earnings release has 64% expecting an earnings beat The company's guidance was for earnings of approximately $1.10 per share. Consensus estimates are for earnings to decline year-over-year by 22.54% with revenue decreasing by 5.11%. Short interest has increased by 251.8% since the company's last earnings release while the stock has drifted higher by 3.9% from its open following the earnings release to be 4.2% below its 200 day moving average of $56.53. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, October 13, 2020 there was some notable buying of 10,216 contracts of the $60.00 call expiring on Friday, November 20, 2020. Option traders are pricing in a 6.4% move on earnings and the stock has averaged a 7.2% move in recent quarters.
Lockheed Martin Corp. (LMT) is confirmed to report earnings at approximately 7:30 AM ET on Tuesday, October 20, 2020. The consensus earnings estimate is $6.07 per share on revenue of $16.24 billion and the Earnings Whisper ® number is $6.30 per share. Investor sentiment going into the company's earnings release has 66% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 7.24% with revenue increasing by 7.05%. Short interest has increased by 4.0% since the company's last earnings release while the stock has drifted higher by 2.2% from its open following the earnings release to be 1.1% above its 200 day moving average of $382.22. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, October 16, 2020 there was some notable buying of 924 contracts of the $140.00 put expiring on Friday, January 21, 2022. Option traders are pricing in a 4.2% move on earnings and the stock has averaged a 2.0% move in recent quarters.
Abbott (ABT) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, October 21, 2020. The consensus earnings estimate is $0.90 per share on revenue of $8.43 billion and the Earnings Whisper ® number is $1.01 per share. Investor sentiment going into the company's earnings release has 68% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 7.14% with revenue increasing by 4.38%. Short interest has decreased by 13.4% since the company's last earnings release while the stock has drifted higher by 12.1% from its open following the earnings release to be 18.6% above its 200 day moving average of $92.46. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, October 13, 2020 there was some notable buying of 4,200 contracts of the $55.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 4.9% move on earnings and the stock has averaged a 2.7% move in recent quarters.
Coca-Cola Company (KO) is confirmed to report earnings at approximately 6:55 AM ET on Thursday, October 22, 2020. The consensus earnings estimate is $0.45 per share on revenue of $8.35 billion and the Earnings Whisper ® number is $0.48 per share. Investor sentiment going into the company's earnings release has 55% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 19.64% with revenue decreasing by 12.17%. Short interest has decreased by 19.7% since the company's last earnings release while the stock has drifted higher by 5.3% from its open following the earnings release to be 1.5% above its 200 day moving average of $49.31. Overall earnings estimates have been revised higher since the company's last earnings release. On Friday, October 2, 2020 there was some notable buying of 1,479 contracts of the $50.50 call expiring on Friday, November 6, 2020. Option traders are pricing in a 3.4% move on earnings and the stock has averaged a 3.0% move in recent quarters.
AT&T Corp. (T) is confirmed to report earnings at approximately 7:05 AM ET on Thursday, October 22, 2020. The consensus earnings estimate is $0.77 per share on revenue of $41.63 billion and the Earnings Whisper ® number is $0.79 per share. Investor sentiment going into the company's earnings release has 48% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 18.09% with revenue decreasing by 6.63%. The stock has drifted lower by 9.4% from its open following the earnings release to be 13.3% below its 200 day moving average of $31.52. Overall earnings estimates have been revised lower since the company's last earnings release. On Wednesday, October 7, 2020 there was some notable buying of 40,305 contracts of the $25.00 call expiring on Friday, January 15, 2021. Option traders are pricing in a 3.9% move on earnings and the stock has averaged a 3.0% move in recent quarters.
Halliburton Company (HAL) is confirmed to report earnings at approximately 6:45 AM ET on Monday, October 19, 2020. The consensus earnings estimate is $0.08 per share on revenue of $3.09 billion and the Earnings Whisper ® number is $0.12 per share. Investor sentiment going into the company's earnings release has 43% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 76.47% with revenue decreasing by 44.32%. Short interest has decreased by 8.8% since the company's last earnings release while the stock has drifted lower by 10.6% from its open following the earnings release to be 13.2% below its 200 day moving average of $14.11. Overall earnings estimates have been revised higher since the company's last earnings release. On Tuesday, October 6, 2020 there was some notable buying of 5,493 contracts of the $11.00 call expiring on Friday, November 20, 2020. Option traders are pricing in a 8.6% move on earnings and the stock has averaged a 3.3% move in recent quarters.
Snap Inc. (SNAP) is confirmed to report earnings at approximately 4:10 PM ET on Tuesday, October 20, 2020. The consensus estimate is for a loss of $0.05 per share on revenue of $547.24 million and the Earnings Whisper ® number is ($0.04) per share. Investor sentiment going into the company's earnings release has 63% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 66.67% with revenue increasing by 22.64%. Short interest has decreased by 34.4% since the company's last earnings release while the stock has drifted higher by 18.5% from its open following the earnings release to be 39.5% above its 200 day moving average of $19.95. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, October 6, 2020 there was some notable buying of 20,380 contracts of the $24.00 put expiring on Friday, November 20, 2020. Option traders are pricing in a 12.9% move on earnings and the stock has averaged a 14.7% move in recent quarters.
claiming gambling winnings and losses on taxes video
The amount of gambling losses you can deduct can never exceed the winnings you report as income. For example, if you have $5,000 in winnings but $8,000 in losses, your deduction is limited to $5,000. You could not write off the remaining $3,000, or carry it forward to future years. Claiming Gambling Winnings and Losses On Federal Tax Returns. Winnings from gambling of any kind are fully taxable under federal law. Gambling income includes, but is not limited to, winnings from lotteries, casino, raffles, sweepstakes, horse races and other sports betting. The taxable value is generally the cash winnings (minus the wager, bet or buy-in) and the fair market value of tangible Gambling and Lottery Winnings Class of Income. Gambling and lottery winnings is a separate class of income under Pennsylvania personal income tax law. See 72 PA C.S. §7303(a)(7). Between July 21, 1983 and Dec. 31, 2015, all prizes of the Pennsylvania Lottery were excluded from this class of income. As a result of Act 84 of 2016, cash prizes of the Pennsylvania Lottery that are paid on or There are certain instances where a W-2G is issued for other gambling winnings of $600 or more. Losses are allowed as an itemized deduction dollar for dollar against the gain. Gambling losses cannot be greater than gambling wins for the tax year. Example: John wins $23,500 during the year playing slots and other casino games. His gambling losses are $37,900. John reports his $23,500 of wins on Amount of your gambling winnings and losses. Any information provided to you on a Form W-2G . The tool is designed for taxpayers who were U.S. citizens or resident aliens for the entire tax year for which they're inquiring. The IRS will only let you deduct losses to the extent that you win. For instance, if you lose $3,000 on one trip to the casino and win $2,100 on another trip in the same year, you can write off $2,100 in losses to offset the $2,100 in winnings, leaving you with a total of $900 of taxable gambling income. Yes and no. Deductions from losses that exceed your winnings still are not allowed. The U.S. Supreme Court ruled in 1987 in the case of Commissioner vs. Groetzinger that deductions for losses cannot exceed the income from winnings. If you regularly pursue gambling with the intention of making a profit, then it’s effectively your day-to-day job. Gambling Losses. You may deduct gambling losses only if you itemize your deductions on Schedule A (Form 1040) and kept a record of your winnings and losses. The amount of losses you deduct can't be more than the amount of gambling income you reported on your return. Claim your gambling losses up to the amount of winnings, as "Other Itemized So, before you run out and spend your new-found fortune, here are 8 things to remember about taxes on gambling winnings and losses. 20 Most-Overlooked Tax Breaks and Deductions ; 1 of 8. You Have The IRS describes gambling losses or winnings quite broadly. In general, these refer to any cash earned or lost in raffles, lotteries, poker and casino games, and sports betting (including horse races). This is good to know—most people assume gambling wins and losses occur only in casinos.
claiming gambling winnings and losses on taxes top
Tax Deduction Tips & Advice : How to Use Gambling Losses ...
If you play the ponies, play the cards, or pull the slots, your winnings are taxable. You must report them on your tax return. If you gamble these IRS tax t... In order to claim gambling losses as deductions on a tax return, records must be kept of all winnings and losses during the whole year. Understand all the im... Gambling winnings are taxable and gambling losses can be deducted up to the amount of winnings. However, taxpayers need to itemize their deductions in order ... How to write off losses against any gambling winnings on your tax return.
