jakiro
In the past few days, BTC has been moving downwards along the 30-day line, and from time to time it has been trending down to 80,000 U.S. dollars.At this time, the market is often silent.After all, most leeks only talk excitedly when they are making high profits, and the current annual line that is about to close down means that the leeks in the high-level stud this year have a high probability of either losing money or losing money. Naturally, their interest is waning and they are too lazy to talk.
But market opportunities tend to be the opposite.The worst time to trade is often when there is a lot of buzz and competition.But when there is silence and no one cares, opportunities, big and small, often lurk.
Take the operation of selling put as an example.The perfect opportunity to sell a put often occurs when these two conditions are met at the same time:
1. The price level has dropped significantly and is about to enter its own psychological target price range.
2. The price suddenly showed a sharp downward trend, and the market panic obviously intensified.
When the market is at its most panicked, the profits from selling puts will be greater.
It can be said that the premium (income) obtained from selling put is the pricing of the current panic in the market.
The higher the level of market panic, the greater the pricing (gains).
On the contrary, if the degree of panic in the market is not high, then the pricing (profit) will be smaller.
In other words, the price at which a put is sold depends on how panicked the market is now.
Therefore, those who can only fight with favorable conditions cannot sell put.Because when the opportunity comes, he is more panicked than the market.
Only those who have practiced the eight-character formula, added positions on dips, and operated against the trend can go a step further and sell a put for fun.
From a purely financial logic point of view, selling put is an extremely uneconomical thing: its maximum return is limited (just a small amount of premium received), but its maximum risk is nearly infinite (the underlying price returns to zero).This is obviously the exact opposite of what is known as asymmetric betting (where the maximum risk is limited but the potential future maximum gain is unlimited).
So, why would someone do something that is obviously not cost-effective?
The reason is that as Jiao Lian once said in a previous article, good and bad are reflections of the same thing from different perspectives.
If you take the huge risk of being forced to exercise the option, buy the underlying, and hold on to losses for the sake of a small amount of premium, then selling put is, as the textbook says, a bad thing.
But if you are in a large structure that continues to make asymmetric bets on a long-term target that you have absolute confidence in, taking advantage of cyclical and short-term market panics in order to buy the target at a better price than the market price, and if you do not buy the target at the bottom, you can still receive some premium as compensation and comfort, then it suddenly becomes a good thing.
This is what is shown in the Tai Chi diagram. There is Yang within Yin, Yin within Yang, and Yin and Yang transform.Good and bad are yang and yin.
Public sentiment will only cause them losses.People who are good at using tools can turn other people’s emotions into their own gains.
The market evolves in only one direction: those who are calm win.
