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Using Spreads: a guide on how to stop getting destroyed by theta
I've seen way too many of you pay way too much for calls and puts when you could be using spreads instead to get a similar amount of leverage for way less risk, so I'm writing this guide as a way to teach some of y'all a thing or two about how to not blow up your account. This will mostly deal with very basic strategies that every trader should know (but apparently don't) but if you don't know the MOST basic concepts like IV, call, put, strike price, you should probably stop and go read some shit before risking thousands of dollars on options you moron. Disclaimer: I'm going to be assuming we hold everything I discuss here to expiration day because it's much simpler. Many spread strategies involve getting out of positions before expiration, but if I included what happens before expiration this post will be 10x as long. As a general rule, spreads are much less sensitive to movement before expiration, which is a bad thing if the direction is going your way, but a good thing if it is not. OK, the beautiful thing about spreads is that there is an absolutely endless number of ways you can set them up to do whatever you want. You can bet on a stock going up or down a little, bet on a stock going up or down a lot, bet on IV going up or down, bet on a stock not moving, bet on a stock going up and then down, etc. We will first talk about the most simple and common spread, a bull call spread, which involves buying one call and selling another call. Let's use an example, and compare it to just YOLOing on buying a call, using everyone's favorite meme stock, TSLA. At 3:45 PM today, TSLA is sitting at almost exactly 1500. Let's say you are bullish on TSLA, its earnings are coming out next week and you think it's going to smash them. You COULD buy an 1800 weekly call like a bunch of morons did on Monday, and it will cost you 31.25 x 100 = $3125. Your max gain is infinite, if TSLA goes to 2000 you will turn your $3125 into $20000 and you'll get to post that sweet gain porn on WSB you sexy stud. But, much more likely, TSLA will not go up 300 points in the next week, your call will expire worthless and Goldman Sachs will thank you for your money. Instead, you could buy spreads. I am going to talk about the basic concept of how much they cost one time, and then use shorthand from that point on. In this case, as an example, you buy the 1600 call, which will cost you $7450, and you sell the 1610 call, which will gain you $7100. The difference between the cost you paid and the money you got is $7450 - $7100 = $350, which is how much a single spread (buying 1 call and selling 1 call) costs you. If the stock closes Friday below 1600, your spread is worthless and you lose all $350. If it closes above 1610, however, your spread is worth the difference between the strikes x 100, so (1610 - 1600 = 10, x 100 = $1000) So, since it cost you $350 to get into the position, you made $650. Let's compare to buying a single call. As noted before, the 1800 call would have cost you $3125. Therefore, for the same price as buying that one call, we can afford 3125 / 350 = 9 spreads. Our max loss is 9 x 350 = $3150, so it's basically the same. Unlike buying the call, our max gain is also capped, at $650 x 9 = $5850. So obviously the downside is that when TSLA smashes and runs up to 3000 a share, you missed out on all those gains. The upsides, however, are that your call has a breakeven point at 1831.25, whereas the spreads have a max gain at 1610. It's MUCH more likely TSLA goes up 110 points next week than that it goes up 330 points. It isn't until TSLA hits 1889.75 (31.25 from the call you bought + 58.5 from the max gain of the spread) that the call alone outperforms your max gain from the spreads. Additionally, if TSLA tanks at open on Monday or Tuesday, your spreads will lose FAR less value than your call, because the 1610 calls you are shorting will be gaining you money while the 1600 calls you are long are losing you money. So, to summarize, for the same cost as betting TSLA will reach 1831.25+, you can bet it will reach 1610, and you are only losing out if it goes above 1889.75. You may ask here "But wait, what if I am insanely bullish and I DO think it's going to 2000? Shouldn't I buy the call anyway?" Aha! There's an even better spread for that! Look at the risk/reward for the 1950/2000 call spread (buying the 1950, selling the 2000): the spread will cost you $300, and has a max gain of $4700 if TSLA closes above 2000. That's 16:1 leverage baby. For less than the price of that one 1800 call, you could buy 10 1950/2000 spreads, which would have a max gain of 10x4700 = $47000 if TSLA hits 2000, which would WAY outperform that one 1800 call, with the obvious downside that THIS spread will be worthless below 1950. But considering that the breakeven point of the 1800 call is 1831.25, and the breakeven for these spreads is 1953, you're only talking about a ~122 point difference for 16x the leverage. The 1800 call only makes more money than the 10 1950/2000 spreads if TSLA goes above 2301.25 (1800 from the strike price + 470 from the max gain of the spreads + 31.25 for the cost of the call) by next Friday. So, you can see how you use spreads to lower your risk, and to maximize your leverage. But possibly more importantly, you can also use them in a simlar way to stop getting fucked by high IV. Let's now use MRNA as an example, because I made so much fucking money on MRNA this week using this strategy. Let's say I think MRNA will hit 110 next week. Stock has insane IV, so the 100 calls are currently sitting at $550. Stock has to go up to 105.5 to break even, and if it hits 110 you don't even double your money. Instead, the better play is to buy the 100 and sell the 110. This will currently cost you $200 per spread, with a max gain of $800 per spread, so essentially 4:1 leverage. For the price of 1 call, you could buy 3 spreads: your breakeven is at 102 instead of 105.5, you don't get blown the fuck out if the stock dips, and if the stock hits 110, you make $2400 instead of $450. Again, the only downside is that you would have made more money from just buying the 100 call if the stock goes above 124.5 by the end of the day Friday, but that's far less likely than going to 110. (Or that the stock skyrockets but then dips, because you make much more money from selling the call early in this case, but again, I'm assuming we're holding to expiration for simplicity). This post got a billion times longer than I expected so I should probably stop here since you autists won't read this much as it is. If you liked it let me know and I'll write some more. If you didn't like it, tell me to go fuck myself. Edit: goddamn this got way bigger than I expected. I'll make another post next week with some more advanced strategies so keep a look out for Using Spreads 2.
Learn from my mistake. Greed/cockiness and stupidity has caused a stressful week
Hey my favorite sub reddit. Hope you all are having a better week than me! I am a little stressed right now. I should have listened to you all. For the last 4 weeks, I switched from selling straight naked puts to OTM put credit spreads on high dollar value stocks like; SHOP, GOOG, AMZN. I would have just sold naked on these stocks if I could, as, I love them all and would have no fear of holding them but you need a pretty damn large account to take assignment of stocks worth over $1000-$3000. It was like free money these past 4 weeks selling 4-5% OTM put credit spreads on these high dollar tech companies. And, I started selling weeklies (which I never used to do, always stuck to 45 days out but I figured tech only had so much further to run and thought I was being safer betting that these stocks won't drop 4% in a week rather than a month and a half) I literally made well over 20k Canadian just off those 3 tickers in 4 trading weeks all from spreads At first I would close these spreads out at 50% profit. Then, I realized they always would end up expiring way OTM and I got mad I was "leaving so much money on the table" so I started riding them to expiry. I had sucha good 4 weeks, on Friday I opened up wayyy more spreads on SHOP,AMZN and GOOG than I would be O.K. with losing because I got over confident. I could have closed them all out on Monday when they ALL hit 52 week highs but 40-50% over a weekend returns were not enough for my greedy ass There is still a good chance at least some of these spreads will be winners. I may get lucky and all of them are BUT, I may be in for a massive loss that will wipe up all my last months gains. I have accepted it and am staying positive as I have plenty of cash on the sides and will be able to make it back. This has been a very humbling learning experience. I am going to be MUCH safer after this, even if I end up somehow coming out ok on all of these I wanted to make this post to state not only the obvious, which, is only create spreads that if you end up needing to take a loss, it won't hurt and the second one DO NOT OPEN ALL YOUR SPREADS IN ONE SECTOR. I had been only sticking to 3 or 4 big name tech stocks because they were the "safe havens" I knew it would not last forever and I still risked it. I thought "one more week and I am done with these weeklies and going back to naked puts" I hate spreads because you cannot roll them unless you take on even more risk by widening the strikes. Puts are SO easy to roll for a credit and each time you roll it brings your cost basis down. I may roll some of these for a debit if I have to as I do believe they will rise, esp as earnings approaches but I am not going to take on more risk by widening the strikes I do not think tech is dead, but, it is strange how much it is lagging. I thought with Covid getting worse, people would be rushing to the "safe haven" stocks more but seems value is the winner lately TLDR: Do not get cocky and sell tons of spreads without asking yourself if you lose on every single one, can you stomach that loss? #2, do not sell all your spreads/puts in the same sector. #3 do not sell weeklies EDIT: It is Thursday night and it looks like I am nicely fucked. SHOP plummeted, AMZN too. I just lost all my gains plus several thousand more from the YEAR in one WEEK. I used to laugh when I saw stories like mine on WSB. Like, some guy was up 1million and is now in the red, Now, I understand. Greed is real. When you just keep winning and winning its easy to get over confident
A Basic Introduction to Vertical Spreads - Stop Losing Money When You Predict the Correct Direction
Vertical Spread Basics Spreads often get a bad rap for sounding more complex than they end up being. I’d wager quite a few people here don’t even know what the “Select” button is for at the top right of the options screen on Robinhood. I see over and over people losing their money with puts or calls when a vertical spread would have accomplished the same thing but better. To keep this basic I will stick to vertical spreads (both credit and debit) and a bit about Iron Condors, and once that’s done I’ll go into a bit of detail about when and where I use them. A vertical option spread is purchasing two options; one you’re buying and one you’re selling. You’re literally trading based on the difference between the two option prices. For example, if I bought a SPY 300c 6/3 and sold a SPY 305c 6/3, I would have a SPY 6/3 305/300 Call Debit Spread. What do we accomplish by both buying and selling the right to 100 shares of SPY though? The short answer: This defines our risk. This can seem kind of difficult to comprehend, but it’s fairly simple: The value of the spread can never be more than the difference between the two strike prices. For the above mentioned trade, we can currently purchase a SPY 6/3 305/300 Call Debit Spread for $0.65 per share ($0.65*100=$65), meaning that the difference in price between the 305c and the 300c is $0.65. If SPY finishes above $305 on 6/3, our 300c we bought finishes in the money as does the 305c we sold, which means the spread between the two option prices has reached its maximum of $5.00. We can now purchase 100 shares of SPY at $300 then sell them to the holder of the option we sold for $305, netting $5 per share for a neat $500. This means that we can make up to $500-$65 = $435 on the trade, a tidy 769% profit. If you take anything away from this write up, please take this: An easy way to view a SPY 6/3 305/300 Call Debit Spread is then that you’re betting $65 to win $500 as long as SPY ends above $305 on 6/3. If you’re not starting to see why vertical spreads are more intuitive than single calls or puts then I encourage you to look back over the paragraph above. The Greeks still matter a lot, but the trade can easily be distilled to the above sentence which is not the case with a single option. I continually see people buying calls and puts, correctly predicting the direction of the market, and still losing money due to IV deterioration or the price not moving enough in the right direction. Vertical spreads simplify the trade by making it only as complicated as you want it to be. If you simply want to bet that a stock will go up over the next month, just set the strikes up to straddle the current price, for example, a SPY 290/280 Call Debit spread. Similarly if you wanted to be against the market, you would do the same thing but by buying a 290 put and selling a 280 put making a SPY 290/280 Put Spread. A credit spread is very similar to a debit spread but inverted. To create a SPY 6/3 300/305 Call Credit spread, we would sell a 300c and buy a 305c, and because we’re selling the more valuable contract (the lower the strike price the more valuable the call), we get a net credit instead of a net debit, meaning we receive money in our account rather than pay it. That means just like when we short a stock, to close the position we need to pay money rather than receive it. With a call credit spread, we’re now betting against the market: If SPY stays below $300 on 6/3, the credit we received when we sold spread stays ours forever since both the 300c we sold and the 305c we bought expired worthless. You’re still betting on the spread between the two option prices, but now you’re betting on the differences between the two going to 0 rather than the maximum. Now, if the position moves against us and SPY finishes above $305 on 6/3, our SPY 300c we sold will exercise and we will pay for those 100 shares with our 100 shares we receive from our 305c, meaning that we pay at maximum $500. NOTE: Robinhood will hold the maximum you can lose as collateral just in case your trade goes poorly, so if you receive a credit of $65 on the trade, you’ll effectively have another $435 locked up until you close the trade. Until now I have assumed that the underlying stock price will always finish outside of the range of your spread which has made things a little cleaner. In reality, if you should choose to hold until expiration and the underlying price is between the two strikes, one of your options will exercise and the other will expire worthless. For example, if on 6/3 SPY ended at $303, for our SPY 6/3 305/300 Debit Spread our 300c would exercise and we would have 100 shares of SPY purchased at $300, netting us $3 per share. Considering that most people in this sub could not handle a purchase of 100 shares of SPY at $300, Robinhood will exercise your spread an hour before close at market prices (which is why I will always sell before this point since you can do a lot better than market prices most of the time). Basics Summary Thus ends the basic portion of the write up. The benefits of vertical spreads are:
Defined risk just like calls and puts
Much simpler to conceptualize profitable scenarios
Requires less capital than calls and puts in cases where share prices are high (TSLA and AMZN). This is due to the fact that you’re playing the difference between option prices and not the ability to sell 100 shares of the underlying.
Options Profit Calculator is a very useful resource for learning not only vertical spreads but any options and I highly recommend playing around with it if you’re new to options: https://www.optionsprofitcalculator.com/ Details and Tips
Liquidity: Spreads are inherently less liquid than single options since it's twice as many transactions (even if it doesn’t seem like it since you’re paying for it all at once). You’ll find that until single options, it is more difficult to get prices that are in the midpoint of the bid-ask spread, meaning you’ll have to pay more for debit spreads and get less credit in credit spreads when opening the positions and vice versa when closing the position. What this means is that it is important to trade options that have high volume, and as a result, low bid-ask spreads. I’ve been burned in the past by purchasing PLNT spreads and losing $100 when purchasing and selling, so I stick to highly traded securities such as SPY, DIS, AAPL, BA, etc. I also always trade on $5 increments when I can help it, since $5 increments are nearly always more liquid than any other strike.
Risk and Reward: There are a lot of knobs to play with if you want more or less risky spreads. Clearly the further OTM your spread is the less you’re paying for that spread and the higher the reward is, which also goes for ITM being more costly as less reward. Wider spreads between the two strikes gives you a larger zone of “medium” rewards whereas tighter spreads create a more all-or-nothing reward structure. I don’t have too much more to say here, if you want to know more about this, play with Options Profit Calculator linked above.
Impact of Implied Volatility: One of the chief benefits of vertical spreads is that we’re avoiding the largest effects of changes in IV since it hits both the leg that we are long as well as the leg we are short. IV still impacts spreads though, since increases in IV cause spreads to increase due to larger expected moves, and contractions in IV cause decreases in IV for opposite reasons. All this means is that we want to use Debit Spreads when we expect IV to increase and Credit Spreads when we expect it to decrease.
Theta: You’ll hear a lot about people saying that theta works for you in a credit spread and against you in a debit spread. This is technically true, since as theta causes option values to tick down, spreads tighten by nature. In reality though, theta only really hurts your debit spreads when they are OTM. Believe me, you’ll still be feeling the theta burn if your credit spread is OTM as you watch your 5/15 SPY 300/305 Put Credit Spread become less and less likely to be ITM. It’s one of the reasons why Iron Condors are set up with two credit spreads, one capping the range and one creating a floor: You want theta to be working for you in both cases (since both are ITM).
Uneven Payouts: I couldn’t find a better term to use for this, but you’ll find that especially for underlyings that have significant upward expectations, you’ll get “more value” out of betting on a downward move. For example, for a SPY 290/280 Call Debit Spread, you’ll pay $6.24 even though SPY nearly right in the middle after closing at $284.97. If there was no expectation of upward movement we would find that a $10 strike debit spread perfectly centered on the current price would cost $5.00, but that is not the case. This spread functions as an interesting indicator of current market sentiment, but it functions more as a lagging indicator than a leading one, which means that betting on upward moves is much more cost effective after a large drop (such as if you’d made bullish bets during the drop over the past few days).
Entering a Position: I’ve found that two things hurt me when I’m entering a position: Giving up too much value when picking a bid, and being too patient in filling my bid. Robinhood is pretty shit at showing you the actual bid-ask spread for a vertical spread, so I like to start bidding at slightly lower than the midpoint of the bid-ask and slowly canceling and reordering the position, upping the purchasing point each time I do. This way I don’t accidentally lose $20 of value by accepting a worse ask than I needed to while also not giving my position time to move while I’m not in it yet. Spreads are surprisingly frustrating to enter when you’re inexperienced, and I’ve certainly given up a thousand or two in fucked up entrances over the past few months. My advice would be to not skimp on planning your entrance.
When to Close Position: I dislike holding my winning plays until expiration for multiple reasons. When the underlying finishes between the strikes of your spread, you end up exposed to pin risk as you can’t sell out of your long/short position until the market opens. I personally also don’t like having the risk that a sudden change in the underlying can cause a winning position to suddenly shift into a losing one, so I usually don’t look for more than 95% gains on a single position and exit out once that has been achieved.
Iron Condors: The only strategy I’ll talk about other than vertical spreads in this writeup since they’re also fairly basic in execution. Iron Condors involve two credit spreads: A call credit spread which forms a cap and a put credit spread which forms a floor. With an Iron Condor you’re betting that the underlying will expire between the two spreads. For example, I currently hold a 6/19 275-300 Iron Condor that consists of a 270/275 Put Credit Spread and a 300/305 Call Credit Spread. While the idea here is basic, realistically you’re not holding an Iron Condor to expiration every time, so it's important to experiment with how the value of an Iron Condor valuation changes as it matures. Taking a look at a theta decay curve will show you where you should expect most of the value to come from. The another big Greek to consider for an Iron Condor is Delta. The delta of an Iron Condor is determined by simply adding the delta of each position within the Iron Condor (short positions are negative delta). Since the expectation for SPY is that the underlying will go up over time, a zero delta Iron Condor (hedged against price movements at time of purchase) will be significantly lower than the midpoint between the two spreads of the IC. I personally like a bit of negative delta in this environment since you end up making money when the underlying decreases and IV increases due to delta, and you also make money when the underlying increases and IV decreases. One last thing to consider when opening and closing an Iron Condor is that it is purchasing two spreads at once, which means that it requires even more liquidity than spreads do to trade profitably. Since you have to buy these so close to the ask and sell so close to the bid, Iron Condors work much better as trades to hold over a period of at least a week. This isn't to say I haven't bought and sold an Iron Condor over a one day stretch, but its certainly not optimal.
Alright this got a bit long, and there's more to talk about, but I’ll stop here. DISCLAIMER: Now that you’ve read this post, I'll admit I’ve only been actively trading for about three months. I just finished a Finance undergrad and I've been investing unsuccessfully for five years until this point where I’m finally up about 100% from when I started over something silly like 100 trades. I’m not gonna post all of my past positions, but my current positions can be found here. Suffice to say that I made a ton off bearish spreads and it was a rude reeducation that made me learn it was necessary to play both sides of the market. TL;DR: Spreads are easier to conceptualize, don’t worry as much about IV and theta, have defined risk, and require less capital than puts/calls. An easy way to view a SPY 6/3 305/300 Call Debit Spread is then that you’re betting $65 to win $500 as long as SPY ends above $305 on 6/3.
Why the Emperor was right but also in way over his head
In general, when the Emperor is discussed here there often seem to be two camps: Those of people pointing out his flaws and wondering why he made so many mistakes if he is supposed to be so powerful and knowledgeable, and those arguing that all those "mistakes" were actually part of a larger plan of his in some 5D chess move kind of way. In this post, I simply wanted to offer one further possible explanation for the Emperors actions before and during the great crusade, one that I have rarely heard mentioned on here before but find interesting, and that I would love to hear your opinion on. Tl;dr: Big E did the best he could, but was in over his head and really just winging it half the time because his task(s) were just that monumental, even to one such as him. Okay, I hope you do like long, extensive lore discussion, because this is what you´ll get next: I have recently read Saturnine (don´t worry, I wont post any major spoilers or such stuff) and, well, all I will say is that some characters in the book (as in many other books) criticize big E, for his ambition, his hubris, the speed at which he created genetically modified beings and unleashed them in combat, and so on. On here as well, He is often criticized for his actions, be it his bad parenting skills, apparent lack of care and compassion, and all that. And while those criticisms are valid, they also seem to often miss an important point, or be based on assumption that I think might be wrong. Namely that of the Emperor being a near-omnipotent deity. This is the standard he is judged by. People assume he should have been able to see everything, know and understand everything and react perfectly, and whenever he does not do that, he catches flak for it. And this is where I present a different interpretation, that of a powerful, but still limited being, someone with great powers who is nevertheless in over his head, but feels he has no choice but to try. Okay, so before you call the nearest Inquisitor, hear me out! The funny thing is that despite all the at least partially valid criticisms (example: Fo and Erda in Saturnine) levelled towards him, especially in-universe, such as the undeniable hubris and flaws and monstrous ambition, the Emperor was, in the most fundamental way, having the right idea. If by accident or through prescience matters a lot from a moral standpoint, but little in practice. And all the proof I need to say he was right in what he tried, can be summarized in 3 words: Orks, Tyranids, Necrons Think about it. Imagine if the Emperor had acted like the other perpetuals, trying to influence humanity from the shadows, staying out of the way, doing his own stuff, and left the many fractured human-inhabited planets alone after old night. All those interesting, different and diverse human societies so brutally subjugated and forced into line (or eradicated and replaced) during the great crusade. All the Xeno species so ruthlessly snuffed out. What if they had been left be, no Imperium coming to force them into line? How long would any of them, Individually, have held out against the great Ork empires? How long until the first re-evolved proto-krork showed up to annihilate or enslave them? Could He have done a better job, been more understanding, learned valuable lessons from those other human societies? Sure he could have, no doubt there. Was he arrogant and ambitious? Absolutely. But he was on a ticking clock. The Orks had been held in check by the human federation (DaoT humans) and, most of all, the Aeldari empire of old. Once those two superpowers collapsed, he knew the clock was ticking and the race was on. By the time that he had finally reunited Terra and the forces of the great crusade got to the Ork empire of Octarius, it was almost too late already, to the point where it took multiple legions, primarchs, titan support, the Emperor and all of the legio custodes to end them. I repeat, this ork empire, only a thousand years or less after the fall of the Aeldari, already had a warboss that would have eaten Horus for breakfast and that, unless He was faking it to bond with Horus, was a struggle for big E to kill. I cannot stress this enough. There was an Ork there that the motherfucking Emperor was unable to insta-kill. Mister “make 100000 legionnaires kneel with my word”, Mister “banish greater daemons with a gesture”, struggled against this. Not to mention the Orks tech-level being already basically on-pasurpassing the great-crusade era Imperium. Yeah, good fucking luck stopping those things, dear Interex. Enjoy your extra 30, 40 years of independence and intellectual freedom if no Imperium exists, before those guys show up and buttfuck your entire military in an afternoon. And that’s only the Orks. Next on the list, the Tyranids. I know, I know, existing lore says they only noticed the galaxy after the beacon on Sotha was overloaded, but in my opinion, that’s dumb. We humans today have no issue building telescopes that can show us distant galaxies, so surely a tyranid hivemind could do the same. Why wait for some specific psychic shockwave that may never manifest? Just send a bunch of scouts to each galaxy you can reach and have em report back what they saw. These things are supposed to have eaten multiple galaxies already, I think they have the hang of it by now. And once again, anything that’s not a unified, galaxy spanning empire will get eaten faster than that small bag of candy at a kids birthday party. All those independent human worlds, as tragic as the loss of their culture/freedom was, were untenably vulnerable on their own. They might not have known it, might have believed that seeing as they rode out the storm that was old night, they would be fine in the future, but that was a goddamn foolish assumption, one they lacked the galactic perspective to really understand. Third, the Necrons. Not sure how much big E knew about them, but seeing how old he is, how powerful, and that aeldari scripture is a thing...who knows, he may have talked with the knife-ears, or just entered a library or two of theirs, be it invited or uninvited, and realized those guys would wake up eventually and decide it was time for red harvest 2, electric boogaloo. Once again, this is something most of the people, inside the story and outside of it seem to forget, not know or ignore when criticizing him for his actions. The clock was ticking, on and on towards utter annihilation. Even without chaos getting in the way at all it would have been tricky to plan for, tricky to achieve victory. That, in response to those who criticize his rapid militarization and ruthless conquest, his uncaring attitude and lack of compassion. You are not incorrect, but He had good reasons to hurry as much as he did. Secondly, his manifold mistakes, for example when interacting with the Primarchs: Lets set the scene. The great crusade had started, the Primarchs were being found, and most ork empires were gone. And now here the Emperor was, acutely aware of what was at stake, short on time, with a realm that had lost many millennia of technological advances during old night, fractured and in many places opposed to his rule. He had to, in order of memory:
Play 5d warp chess with a bunch of immaterial monsters interested in nothing but the preservation and spreading of their influence and food sources
Project a giant navigation beacon for his fleets to travel by
Keep the dragon locked on mars with the power of his mind
Lead the great crusade tactically and strategically,
Watch over his emotionally unstable, in some cases fundamentally damaged, constantly bickering demigod sons (while still making use of them because well, he kinda needed them)
Coordinate the webway project, a feat of massively complicated psychic engineering only the old ones had mastered before this
And, all the while, try to find and hold on to the one perfect potential future among billions through his foresight.
All of this. At once. Oh, and there are other players too, like the Aeldari, with their groups of powerful, prescient psykers, who are playing their own game of “who can fuck up the future the most?”, not to mention groups like the cabal who also mess with his plans because hey, getting rid of chaos means killing everyone by letting ‘em win so lets go do that! Taking all that into account, I think its not that far-fetched that he would make mistakes, and loose control of the situation. Could he have been a better father? Sure. More understanding, more merciful? Absolutely. Is he ambitious beyond mortal understanding, and arrogant and ruthless to a mind-boggling degree? You bet your ass he is. But so many people on here seem to only look at individual scenes in books and, using the power of hindsight and their out-of-universe perspective, criticize the emperor for this or that, and the seemingly simple fixes he should have implemented. I know he is often portrayed as this nearly all-powerful being, so people think he should be able to do it no problem, but my headcanon explanation for his behavior is that maybe, just maybe, he was strained to the absolute breaking point doing all that he did. I feel like I should say this again: I think he was under a level of stress almost unimaginable to normal humans, because it would have broken our mind to experience it. I struggle to imagine the level of anxiety it must produce to know that you have this one chance to get it right. It will be difficult and painful and require much sacrifice, but you have to take it, because the other options are so so much worse. And yet you, and most likely you alone (or maybe 1 or 2 others) know just how much depends on getting this right. Whom can you confide in, especially without jeopardizing the plan by getting them all worried and anxious? The Primarchs? Good joke! Most of them are busy enough with their own worries and grievances. If they find out daddy know it all isn’t as sure as he pretends to be who knows what they will do? I mean come on, even Horus, who had grown up as daddy’s favourite, was stressed and worried to the point of being open to manipulation and ultimately rebellion just concluding what seemed to be a crusade already mostly won. Now imagine he had told them how bad it really was. So whom could he talk to? Malcador, sure. His Custodians? Maybe. Even one of them seems shaken when the Emperor, in some book after the Webway project fails, says he does not know what to do next. Because it is something he has never ever heard him say. So there you have it. No claim to completion or correctness, merely an idea I had that could explain some of the stuff that happened: That the emperor, despite all his skills, all his powers, was in over his head, stressed and worried beyond mortal understanding knowing what was at stake and taxed to (or beyond?) his absolute limit trying to do all that he knew needed to be done, which is why he made the mistakes that he made.
Star Wars is easily the worst franchise to talk about on WhoWouldWin by far. At least with Naruto or Dragon Ball Z or One Punch Man there's some difference in the comments once in a while. But literally, and I mean literally, the replies of every single Star Wars thread, no matter the character, no matter the matchup, are exactly the same every single time without fail. Here's every Star Wars thread on WhoWouldWin ever:
Star Wars character vs. other character Round 1: Canon Round 2: Legends
Top comment with 3k+ upvotes: Star Wars character loses round 1, but in round 2 they absolutely godstomp 10/10 times they speedblitz the other character at FTL speeds and slash them seventeen thousand times in an attosecond with their lightsaber, or they use their Planetary+++ Force abilities to choke the other person to death and while they're choking them they stab them, or they make their heart stop or rip their organs out their chest with the Force in a microsecond. The other character literally can't even hit them because they're FTL and have nanosecond level precog that lets them avoid every hit ever. Palpatine can destroy planets Obi-Wan can open black holes with his mind Luke is literally a Force God who can annihilate half the galaxy with a blink LEGENDS IS CRAZY BRO!!! Reply to that comment with 500+ upvotes: Yeah bro, this is kind of a complete and total godstomp, don't know why OP bothered posting it lol legends always wins LEGENDS IS CRAZY BRO!!! Reply to first comment, score below threshold, hidden: Um, scans? Now, for all you people unfamiliar with Star Wars, you're probably wondering what "Legends" is. Legends is simply the official term used to refer to the old Expanded Universe content made for Star Wars, so books, comics, anything other than the movies pretty much. After buying Star Wars, Disney went and made the majority of the Expanded Universe part of its own separate non-canon continuity, meaning there's two versions of most Star Wars characters: Canon and Legends. "Star Wars Legends," or just "Legends" is used to refer to the Legends continuity as a whole. Legends, and I'm brave enough to say this, is the single most wanked series in battleboarding history. The way people talk about it, you'd think every book is a non-stop balls to the wall orgy of FTL and planet-busting feats. It's to the point where you don't have to link any scans or post any clips: just saying the words "LEGENDS IS CRAZY BRO" is a bulletproof argument in and of itself. But is Legends crazy, bro? The answer is: It's fake. All of it. The feats, the preconceptions... it's all fake. I can't fucking stand Legends wank, mostly because it kills all discussion of Star Wars on versus sites. I like Star Wars quite a bit, and I'd like to see some intelligent discussion of it in my dumb, pointless hobby. But every attempt at a Star Wars thread is drowned out by the incessant drum of LEGENDS IS CRAZY BRO! LEGENDS IS CRAZY BRO! LEGENDS IS CRAZY BRO! It fucking haunts me, I close my eyes and instead of black it's just the Obi-Wan VS Kakashi Death Battle on loop. At the suggestion of my therapist, I'm fighting back. This is the beginning of a series of posts where I'm going to be debunking Legends wank I find on sites like VSBW. I decided to start with Palpatine because he's personally the character I see getting the most of it. And besides, this is gonna be my own personal Order 66 on Legends wank. So who else could be more appropriate? Onto the debunking:
The Claim: Palpatine can make planet-destroying Force Storms on a whim.
When someone mentions planet-busting Palpatine on WhoWouldWin, nine times out of ten this is what they're talking about. You usually don't get links for Legends claims, but for the power of the Force Storm ability, I usually see this one posted when its brought up. It's from a book called The Jedi Path, which is supposed to be an in-universe Jedi manual complete with notations from the characters who owned it. So the quote from Luke - "it has the power to kill worlds" - is an in-universe statement of power. So, what's Force Storm? Basically its an ability where a hyperspace wormhole is opened using the Force. It can be used to transport people across the galaxy and destroy things, which yes, includes planets according to The Jedi Path. It's a not very commonly seen Force power, first appearing in the Dark Empire comics. Palpatine creates one and uses it to do some major damage to Coruscant and the New Republic fleet. However, he ends up killing himself with the storm accidentally after Luke and Leia interrupt his connection to it. Palpatine can create Force Storms, Force Storms can destroy planets. So Palpatine's planetary. Seems pretty clean cut, right? Except, he can't create Force Storms. At least according to Tom Veitch, author of Dark Empire (which had the first appearance of the power). Third line. If you want to read the full 2016 interview, here it is. It's translated from Spanish, but the translation is very direct, at least for the relevant section. Yep, apparently Force Storms are "in fact a phenomenon that occurs rarely, when the minds of two great Force users meet and struggle with each other at a distance." Straight from the mouth of God, Palpatine can't make them of his own will. There's probably arguments you could make that he could, like Palpatine claiming he can create them of his own will in-story, but that same scan mentions him lying about how much control he has over the power, so I don't really buy his word. Some roleplaying guidebooks give him the power in his list of abilities (like if you want to play as him in the game or use him as an enemy) but I feel that's too tertiary to count. And really, it kinda makes sense he can't really pull them out all the time when you think about it. There's two sequels to Dark Empire where he's reborn again in clone bodies, and in none of the sequels does he try to use a Force Storm. Even though it would come in handy, like, a lot. In any case, if you're arguing Palpatine can make Force Storms, you're arguing against the guy that created Force Storms to begin with. I think he'd know how they work.
EDIT: Additional supporting content found.
Special thanks to GregLeagueGamingAlt for digging up another interview with Tom Veitch that backs up this other interview. (Sorry for being unnecessarily dickish to you, Greg, I was just in a bad mood) Basically, Tom reiterates what's said in the other interview, going into a bit more detail. He says that the intended mechanism behind the Force Storm in Dark Empire is the "meeting of two great minds" thing from before, with one being Luke and one being Palpy, with Palpy just being the one who can actually use the storm to his advantage. While he does say that there are other possible explanations, like Luke finding a Sith holocron or saying that the interviewer's suggestion of Palpatine maybe only stumbling across the power recently could work, the intended explanation when the comic was being published was the "meeting of Luke and Palpatine's power" interpretation. I'd also like to mention the Force Storm's entry from the updated version of the Star Wars Encyclopedia: "A tornado of energy created by great disturbances in the Force. Dark Side Adepts demonstrated limited control over the creation of these storms. Emperor Palpatine claimed the ability to create and control Force storms at will. Light-side practitioners could also band together and create powerful Force storms." This backs up the "meeting of Luke and Palpatine's power" interpretation in a few ways. First, going back to the interview, Tom implied that things were kept kind of vague about how the Force Storm works when details had to be hashed out to other publications. So that's probably why both this and the Dark Empire endnotes only say that Palpatine claimed he had the ability to create and control the storms at will. Second off, I'd like to point out the main description - "A tornado of energy created by great disturbances in the Force." Sounds a bit less like a standard Force power and more like something a bit more exceptional. The destruction of Alderaan caused a great disturbance in the Force, and that was a pretty major event. Also going back to the interview, Tom all but says he made this description up himself. Third, "Dark Side Adepts demonstrated limited control over the creation of these storms" seems like it could debunk the idea, unless you read it as "multiple Dark Side adepts working together could demonstrate limited control over the creation of a Force Storm," which I think is perfectly reasonable considering the next line about multiple Light-side practicioners having to band together to create one. This final line also gives canon support to the idea of multiple Force users being involved in the creation of a Force Storm. Yes, there are some sources that say he can make Force Storms of his own will, but for each of those sources there's also one that says it's a claim, and the Dark Empire endnotes prove Palpy isn't 100% trustworthy. Not to mention the other sources are, let's face it, pretty much on the level of WoG too. Just an author saying things about a story outside the context of that story. Do you take diluted, inconsistent, but published WoG from some handbooks, or do you take straight fron the source, consistent for 20 years (going off the second interview) WoG from the author of Dark Empire and creator of Force Storms himself? Personally, I'll take the latter, thanks. You can scream "WoG is fake!" until your face turns blue, I usually do too, but I feel this is consistent and not-off-the-cuff enough to count, and doesn't step on that many toes other than some guides he didn't even write published years after his own work. If you read Dark Empire with this idea in mind, you'll find pretty much everything makes perfect sense. I've also seen people bring up two things in trying to say that this couldn't possibly be true: one, that we've seen other people make Force Storms of their own power in Legends, and two, that Force Storms naturally occur on the planet Tython. The thing is, we haven't. The only other uses of Force Storm needed an incredibly powerful, magic, sentient staff that absorbs large amounts of Force to pull off, which actually supports the idea that Sith need an external force or push to be able to make a Force Storm, and the "Force storm" on the planet Tython is actually a different thing with the same name. In any case, I really don't think Force Storms matter that much in the grand scheme of things. Once again, Palpatine doesn't whip these out all the time, and its already been established that it's dubious he's completely making them of his own power, taking into account consistent Word of God, multiple sources saying he only claims he can make them of his own power, and a canon basis for it taking multiple Force users to make one. He'd probably end up killing himself if he tried to make one in a fight, and there's no other evidence to suggest that he has planet-level power anyway other than this one power in this one series that the primary author has said he can't really even do. Besides, it's not like the power for the Force Storm comes from Palpatine even if you believe (against the author of Dark Empire and creator of the power) that he can make them at a snap of his fingers. If you ignore Veitch's definition of the power, then we're left with stuff like Palpatine's descriptions to go off of, and he explicitly says in both the endnotes and audiobook that the Force Storm utilizes external energy. As I've said, I find his word iffy, but The Jedi Path also calls the Force Storm "pure natural energy," and the previously mentioned magical staff relies on absorbing external energy to create a Force Storm. Once again, even ignoring Veitch's words, it's consistent that it's external energy being used. So if you're trying to do a VSBW thing where "using the Force Storms means he has planetary power which he can harness in his other Force attacks," no. Finally, I'd like to debunk the idea that Palpatine created multiple Force Storms at once in Dark Empire. Post's too big to fit it, so read it here. To TL;DR it all, there's solid WoG backed up by canon evidence that says Palpy can't make Force Storms, and even if you throw that WoG out, Force Storms aren't applicable in most matchups since Palpy would almost certainly kill himself with one in a 1v1 fight because they're fucking massive and he hasn't shown full control over them. His other Force abilities don't scale to Force Storms either.
Updated Verdict: No, he still probably can't on his own, and if he can, they're still not particularly combat applicable and you can't scale his other Force powers to them.
The Claim: Palpatine is a SOLAR SYSTEM BUSTER!
This next thing I'm talking about comes from a novel called Darth Plagueis. This is the book your Legends fan friend wont shut up about. Basically, the prologue has a highly poetically worded scene describing Palpatine's feelings after killing his master. Some of it has been misinterpreted as actually happening in the context of the story. Here's the scene. I don't really know what else to say here, it's not actually happening. It's just a flowery description of how Palpatine feels, it's not literally going on. This was spread on VSBW as proof of Palpatine being planet/stasolar system level, I'm assuming because of these parts:
A tremor took hold of the planet. Sprung from death, it unleashed itself in a powerful wave, at once burrowing deep into the world’s core and radiating through its saccharine atmosphere to shake the stars themselves. At the quake’s epicenter stood Sidious, one elegant hand vised on the burnished sill of an expansive translucency, a vessel filled suddenly to bursting, the Force so strong within him that he feared he might disappear into it, never to return. But the moment didn’t constitute an ending so much as a true beginning, long overdue; it was less a transformation than an intensification—a gravitic shift. A welter of voices, near and far, present and from eons past, drowned his thoughts. Raised in praise, the voices proclaimed his reign and cheered the inauguration of a new order. Yellow eyes lifted to the night sky, he saw the trembling stars flare, and in the depth of his being he felt the power of the dark side anoint him. Slowly, almost reluctantly, he came back to himself, his gaze settling on his manicured hands. Returned to the present, he took note of his rapid breathing, while behind him the room labored to restore order.
His eyes sought and found an ascending constellation of stars, one of power and consequence new to the sky, though soon to be overwhelmed by dawn’s first light. Low in the sky over the flatlands, visible only to those who knew where and how to look, it ushered in a bold future. To some the stars and planets might seem to be moving as ever, destined to align in configurations calculated long before their fiery births. But in fact the heavens had been perturbed, tugged by dark matter into novel alignments. In his mouth, Sidious tasted the tang of blood; in his chest, he felt the monster rising, emerging from shadowy depths and contorting his aspect into something fearsome just short of revealing itself to the world.
Yeah, this is just... again, it's not actually happening. I could go on and say what each line represents about what Palpatine's currently feeling and how its clearly just a reflection of his emotions, but I don't have to. All I have to do is flip over to the last chapter of the book, which describes the same scene with a whole lot less flair. For anyone who wants to make the argument that at least the quake happened because the text I linked mentions overturned furniture, it was overturned in the fight between Palpatine and Plagueis. Not by any Force earthquake. So, yeah. It's just in Palpy's head after he kills his master. Not literal.
Verdict: Learn reading comprehension.
The Claim: Palpatine is 34 thousand times faster than the speed of light.
Of all the Star Wars stats, speed is the fuckiest of all. That's because the main projectile of the series, blaster bolts, are incredibly vague in terms of speed. The movies usually show them as like, Nerf dart to baseball speed, while the novels go as high as calling them lightspeed (they're obviously not, but that's for another post). Since pretty much all speed feats that would involve gunfire in other series instead involve blaster fire, it makes things really annoying to pin down, as well as open to dipshit amounts of wank. If you open up Palpatine's VSBW page, he's given a speed ranking of "MFTL+," thanks to incestuous scaling, taking blaster bolts as lightspeed due to like 7 dubious statements across 381 books, and a calc of the time his Sith spirit moved across the galaxy to inhabit a new clone body. The calc specifically puts him at 34,292c, or over 34 thousand times faster than the speed of light. Star Wars characters are fast, guise! Alright, let me try to explain why this is dumb. First off, why would the speed of Palpatine's spirit be equal to his speed in a mortal body? It's not like he can like, fucking fly through space like his spirit presumably can. I'm also going to guess his spirit weighs less, but, that's straying into dumb territory. To summarize this point: I don't see why Palpatine would be as fast as his disembodied consciousness, and I think it's kinda weird and dumb to assume so. Second off, here's a few lines of text I want to take a closer look at.
He had spent over a year disembodied, formless, drifting through the maddening void of the Dark Side. He had never foreseen having to transport his spirit so far across space. He had nearly dispersed forever, but he had survived, and now need never fear death again.
According to the Dark Empire Sourcebook, Palpatine traveled "through the maddening void of the Dark Side." Sounds a little different than traveling through actual space.
But in that moment, when flashing blue energy rushed from exploded flesh, the Emperor entered a bodiless transitional state. As conscious Dark Force he was translated across the Galaxy...
According to the Dark Empire Endnotes, he was "translated across the galaxy" as "conscious Dark Force," which again, sounds a little different from traveling the distance in real space as a ghost. There's other stuff like this too. Personally, I think there is far too much weirdness around this "feat" to count it as some sort of actual indication of Palpatine's speed. Force users generally don't seem this fast in the majority of Star Wars media anyway. Just as a note, Vitiate also has a feat that's pretty much the exact same as this one, and wrong for the exact same reasons.
The Claim: Palpatine scales to other Sith Lords who have CRAZY feats, bro!!1!!!
So, Palpy can't summon planet-destroying Force Storms whenever he pleases, rearrange stars with his own power, or move faster than the speed of light. But, I hear the people scream, what about scaling!?! Palpatine is routinely called the strongest Dark Side user in history, so he should scale to all previous Sith Lords and such, right? I can actually buy that, yes. There's tons of statements backing up Sheev as pretty much the ultimate Dark Side user, so I think it's reasonable enough to assume he can match his predecessors. So, lets look at all the high end Dark Side stuff I could dig up, and why it's all either fake or not really something you should scale Sidious to. Most of this stuff I found on VSBW. I might be missing one or two things, but honestly, they're probably just fake too.. If you're wondering about the absence of Vitiate and Nihilus, this is going to be a multi-post series, and I'm thinking KOTOR will just get its entire own post. That being said, most of Vitiate's stuff is rituals, which I think Palpatine could replicate but wouldn't really be able to in a standard matchup, and I think Nihilus's status as a wound in the Force explains his unique attributes, and as such I'm not really sure if Palpatine could replicate the things he does. I haven't really done much of the research in that department yet, though, so it's entirely possible I'm wrong.
Random Unnamed Sith Sorceress (and a Triceratops Jedi named Thon)
Jerec is a Miraluka Dark Jedi most famous for his appearance in Star Wars: Jedi Knight: Dark Forces II, a classic game starring the fan favorite Kyle Katarn. The Valley of the Jedi is a location of great power that plays an important part in the plot of the game. According to Qu Rahn, a Jedi Master, if Jerec gets his hands on the power in the Valley of the Jedi, he'll be strong enough to trigger supernovas and wipe out entire star systems.
So, what exactly is the Valley of the Jedi? Well, the backstory is that there was a war between Jedi and Sith there that culminated in the use of an ancient ritual which killed thousands of Jedi and Sith alike and trapped their souls in the valley. A temple was built there and the place became an incredibly powerful Force nexus. With all that laid out - remind me why VSBW says Palpatine should scale to this? It's a guy drawing power from the spirits of literally thousands of Force users. There's a ton of statements saying Palpatine is above all other Sith, but I don't really think that includes when they're being amped by the souls of countless other Force users. I feel this is pretty easy to throw out for that reason. I've seen some reasoning tossed around to try and support this scaling. Namely, that it took the power of Every Jedi Literally Ever to keep Palpatine from rising as a spirit again and just taking some new body in the last Dark Empire series. Except, it really didn't? It took fucking Chex Quest here to put him down. Read the scene for yourself. The wording here isn't "ugh, he's so powerful I need all the other Jedis help to keep him from rising again, Palpatine is literally stronger than every Jedi ever combined put together," it's "me, and the Force, and the other Jedi will keep him from reviving." The New Essential Chronology doesn't even bother to mention the other Jedi spirits, most sources give the credit to Chex Quest, and I think it's really sketchy to try and justify scaling Palpatine to a guy being amped by thousands of Force user spirits because his own spirit was pulled down by a Chex Quest guy and kept down with the assistance of other Jedi spirits and the Force itself too. We're getting into the same territory as Triceratops Jedi putting Sith spirits created by centuries of work in a lake here, there's just too much nonsense going on to get anything out of it. Anyways, TL;DR: Palpatine shouldn't scale to this. I can buy him scaling off of other Sith Lords, but not when they're being empowered by literally thousands of other Force users.
These two are different, but I'm lumping them together because the reasoning is the same. Wutzek is a weird Force being that appears in a total of one comic book (and a canceled novella). The World Razer is a weird Force being that appears in a total of one mission in an MMO (and a canceled novella). I'll talk about Wutzek first. Basically, he shows up in one weird UK story of the classic Star Wars comics. He's introduced as a bunch of glowing lights encased in a glass thingy. According to this weirdo that captured the crew of the Falcon, he's a "demon, a Force creature of unimaginable power." It's believed his kind owned the universe long ago. In the comic, there's a statement of Wutzek's power that puts him at like, planet or solar system. Though the most we see him do is incinerate some people and blow up a ship, then grow big and fly off. Next up, World Razer. Almost is nothing is known about this guy, even in universe. Here's his codex entry from the Old Republic game.
"Almost nothing is known of the ancient being known as the World Razer. No one has seen or spoken to the creature for thousands of years; the Rakata’s cryptic warnings suggest the World Razer is Belsavis’s oldest prisoner, and that the prison was first constructed to hold the terrible entity whose hunger consumed a thousand worlds. According to the Rakata inscriptions in the Tomb, it took the combined might of the Infinite Empire to subdue the World Razer, and an entire planet to contain its fury. If such a creature were ever released, its rage might very well shatter the galaxy."
Wow. "Shatter the galaxy?" Clearly this thing is galaxy level! Or... y'know, it's just fancy language describing how it could destroy the galaxy over a large span of time. That's at least the impression that I get from this one quote from the World Razer. Other in-game dialogue suggests the World Razer can destroy planets and stars as well. Sidenote: There's an infamous speed calc made off this statement which assumes a literal timeframe of one day based on what this character says about it happening "tomorrow." The character uses the word "yesterday" in the same scene to talk about something that happened a while in the past, so it's probably not literally being used to refer to one day. Sometimes the word "tomorrow" is used to refer to just the future in general, y'know, like how sometimes Superman is called "the Man of Tomorrow." Or, "Tomorrowland." If you look on dictionary.com, it's literally the second definition of the word. God, I have to explain words now, fuck Star Wars wank dude this is what it does to you. Moving on. Here's the thing about these guys: we know next to nothing about them. For fuck's sake, we don't even see the World Razer, even its in-game codex starts off with "almost nothing is known about this thing." Wutzek we know almost even less about, he's just apparently some Force demon from the beginning of the universe. Why is Palpatine getting scaled to these things? They're incredibly vague, ancient powers that definitely seem to be above any Force user we've seen. Are we really getting to the point where we're saying the main villain of the franchise is equal in power to two incredibly vague characters with one appearance each, for the sole reason of "they exist in the same universe?" This is just so stupid, and in my opinion, not legitimate in the slightest. About that canceled novella I mentioned: it confirms both of these guys as like, both being ancient Force gods. If the book was published, that'd be pretty solid evidence against Palpy scaling.
Update: This wasn't in the original version of the post. I found it afterwards, and I decided to add it in. I didn't think it was worthy of its entire own post. Did you ever hear about the multi-continental feat of Darth Plagueis The Wise? I thought not. Because it's fake as shit. This text comes from the Darth Plagueis novel I mentioned earlier:
Later it would be said by Naboo and Gungan alike that they couldn’t recall a colder winter than the one that followed Hego Damask’s autumnal visit to their world. The rivers and even the falls below Theed froze; the rolling plains and tall forests were blanketed three meters deep with snow; plasmic quakes rocked the Gallo Mountains and the Lake Country, the Holy Places and the undersea city of Otoh Gunga; and many of the egresses of the underwaterways that hollowed the planet were blocked by ice floes.
This one isn't serious, I just wanted to share this cause I think it's really fucking funny. One time when a VSBW person came on a server I was on, they were trying to argue planetary Star Wars with this. "Bane's world-crushing strategy!" Why are you so goddamn desperate? It's a fucking cropped book blurb or something, shut up. I don't know what this scan is particularly from, but its referring to something he's doing as a general, not Bane literally crushing a planet with the Force, Jesus Christ. This is 90% of Legends wank, just nonsense taken out of context, then completely and almost willingly misinterpreted. I swear, there's a single shriveled-up little brain cell being passed around at VSBW like the Fates from Hercules.
Verdict: Either the feats are fake or he doesn't scale.
So, after all that, I bet you're wondering how strong Sidious actually is then. The answer is: fuck if I know. Do you know how many goddamn Legends books and comics there are that he's in? I didn't read that all for this thread, but I can tell you this: he sure as shit isn't planetary or fucking solar system level. If there was actually a single, solid planet busting feat for him, or any other Force user you can scale others to, you'd see it paraded around every versus forum until the heat death of the universe. But guess what? There isn't. That's why you only ever see shit like Random Unnamed Sith Sorceress taking centuries to ruin a planet's surface or Yarael Poof and his non-feat being brought up. Speaking of that fucking long-necked bastard, I'm retconning this old post I made about him into the first episode of this series. Go read it if you're wondering about the infamous "Yarael Poof holding back a planetary explosion" feat, or re-read it if you want to see me address a defense I found, I added a new part to it. Gotta say though, making this post kinda made me want to go through and make an actually comprehensive Legends Palpatine respect thread. The one on the Respect Threads subreddit is pretty laughable, since it's literally just a segment of the "Force powers" section of his Wookieepedia article with added commentary. All the other ones I can find are pretty dogshit too. So maybe I'll put that out sometime, I don't know. Oh yeah, one last thing. If you're wondering about other characters you think Palpatine should scale to, like Legends Luke (everything you think you know about him is lies), Vitiate and Nihilus (explained above), and Abeloth (I haven't read any Abeloth stuff but it's probably all fake too, given Legends's track record), they're getting their own posts in the future. This post is specifically about Palpatine and C-list Sith stuff.
Kickoff with Asuka who is set for a match against Charlotte but instead Sasha Banks and Bayley come out. Bayley says we should be thanking them for gracing us with their star power. Bayley talks about how her and Sasha won the Women's Tag Titles last Friday night. Asuka interrupts with some angry Japanese and says this is her ring and she wants to fight. Bayley tells her to shut up and explains because they are the Women's tag champs they can go to whatever brand they want. Charlotte comes down to the ring and says she understands why Sasha and Bayley want to have a victory lap before they quickly lose the tag titles like last time. She tells them to enjoy the spotlight but to make it quick because she has a match with Asuka. The IIconics come out next and Billie says Charlotte isn't the sharpest tool in the shed because the match everyone wants to see isn't tonight, it's at Backlash. She announces that this Sunday there will be a triple threat match for the Women's Tag Titles between Banks and Bayley, Cross and Bliss, and The IIconics. More angry Japanese from Asuka, Charlotte agrees with her. Bayley says Charlotte tried to drive her and Sasha apart but look at what happened, they're stronger than ever. Charlotte says Bayley needs a belt or two to even be relevant because otherwise her and Sasha would just be garbage. Bayley attacks Charlotte and a brawl ensues, Asuka and Charlotte clear house and stand tall, staring eachother down.
After the opening match Charlotte attacks Asuka and holds up the Raw Women's Title, and says that Asuka still hasn't beaten her.
Rey Mysterio does an interview via satellite and Seth Rollins takes Byron's headset so he can talk to Rey during it. Rey starts off by calling Seth a son of a bitch and we go to ad break. As we return Tom Phillips asks if Rey has any updates about his eye, Rey says his doctor gave him a positive prognosis but is cautious that any further damage could be irreversible. Rey says if he does come back he's gunning right for Seth and will hit him with a 619 as soon as the bell rings and vows to kick Seth's ass. Seth tells him to calm down and think about his sacrifice. Rey had the opportunity to walk away after his greatest moment yet he continues to spread these lies about what Seth did. Seth says he will offer Rey one more chance, he invites Rey and Dominic to Raw next week to retire like he should have. Rey says he knows this is a trap because he isn't medically cleared yet and promises that as soon as he is cleared Seth will be the first to know about it because he is gunning for him. Seth tries to clear the air but Aleister Black runs in from out of nowhere and attacks him. After the tag match Seth comes out with a Rey Mysterio mask to cause a distraction and then directs Murphy and Theory to beat down Aleister. Murphy hits Murphy's Law and then Seth hits the curbstomp on him.
Randy Orton is interviewed and has his own question, will Edge be the only guest on the Peep Show and if that segment is next, then starts to walk off. Charly asks why he wants to know and Orton says there may be two guests.
It's time for the Peep Show with special guest Edge. Christian says Edge knows how excited he was to see him return and have his big return at Wrestlemania, but honestly, he thinks Edge is running on fumes. Christian says even in his prime Edge couldn't have the greatest wrestling match ever, best friends have to be brutally honest with each other. He says if Edge really thinks he can accomplish that he's lying to himself. Edge asks Christian to put himself in his shoes, he's being told in his first real match back after 9 years he has to have the greatest match ever, it's like being thrown at the bottom of Mount Everest with no crew and being told to reach the top. He says he isn't the same Edge that gave Christian motivation before their tag matches, he doesn't have the same self confidence that he can fire on all cylinders, he doesn't even know if he has all his cylinders left. Christian says there was always one person who always believed in the old Edge, his mom, she was there for every one of his crowning moments, and she'll be in the same spot at Backlash. Christian tells Adam if he's isn't going to go all out then he just needs to leave right now. Edge gets right in Christian's face and Christian says this is the Edge that he needs to be and have the anti-venom. Randy Orton gets on the tron and says he is sick of listening to them talk about thinking and what they could do. Orton thinks that if Edge is just going to try then that is pathetic. Orton says he is going to humiliate Edge and turn him into a broken man who has to go home to his wife and daughters. He says at Backlash Edge's redemption is over. Edge defiantly says no it's not and walks to the back.
Charly Caruso interviews MVP. Montel says if she wants an in-depth break down of Lashley's devistating full nelson she will have to tune into the VIP lounge. We pan to see R-Truth looking around at some stage crates. Truth tells MVP to say he hasn't seen him because he's hiding from Robert Gronk. MVP calls Truth and Clown and Lashley locks the full nelson on Truth.
The Street Profits and Viking Raiders face off in a decathalon. Street Profits win the 1600 meter dash, flip cup, hurdling, a dance off, and shot-put. The Viking Raiders win archery, sword fighting (via forefit), stick fighting, turkey leg eating, and pole vaulting.
Apollo Crews says he is excited to defend his United States Championship at Backlash against whoever wins the following triple threat between Andrade, Angel Garza, and Kevin Owens.
Charlotte is interviewed and says she didn't lose last night, she wasn't pinned and submitted. She was raised being taught to be the woman you have to beat the woman. She was supposed to main event NXT last night and then main event Raw tonight. Asuka dances by and Charlotte asks her if she ever takes anything seriously. She stops dead in her tracks and says yes she does, then slaps Charlotte across the face.
Andrade and Angel are arguing after the triple threat over which one of them accidentally pushed over Zelina during the match. Vega walks in and just points them to go off screen.
Kurt Angle says like Ric Flair and Shawn Michaels he has been in a lot of great matches but he feel chemistry is what fuels an amazing match. Flair had it with Steamboat, Shawn had it with Taker, he had it with Brock, and Orton has it with Edge. Angle picks Edge to win because he can't bet against a fellow hall of famer.
The Viking Raiders ask Drew McIntyre if he's finally decided to join the raid. Drew says he's considering it and says they were impressive during the decathlon and says Ivar is a ladiesman. Drew asks them if they want to celebrate after the Raiders beat MVP and Lashley. He says the Raiders should watch the VIP Lounge next because you never know what's gonna happen on it.
It's time for the VIP Lounge with his guest, Bobby Lashley. MVP is introducing Lashley by listing off his accolades but Drew McIntyre comes out instead. Drew says MVP forgot to list off that he is WWE Champion as well, and he was hurt after how long they've been friends. MVP says they aren't friends and wants to know where his guest is. Drew says Lashley and Lana were having an argument backstage. MVP says this isn't supposed to be about Drew, this is about Lashley and his full nelson that he'll use to take the WWE Championship. He says Bobby is gonna ragdoll Drew like he did last week and he is going to unlock Lashley's potential. Drew wonders if MVP is like Bobby's Yoda, teaching him the secrets of winning 0 world titles. Drew gives MVP two options, he can take the Claymore right now or he can run and he'll chase him down instead. Drew starts the countdown but Lashley runs into the ring to stop him. Drew tells Lashley that he won't be able to sneak up on him this Sunday and then headbutts MVP. The Viking Raiders and the Street Profits come down to the ring to back Drew up.
After Viking Raiders vs MVP and Lashley, Ivar clocks MVP with a punch but is put in the Full Nelson by Lashley. The Street Profits try to get Lashley off Ivar but are unsuccessful until Drew comes in and sends Lashley packing.
Lana is interviewed by Charly and is asked if Bobby wanting her not to come to ringside was actually Bobby's idea or MVP. Lana thinks about it but seems convinced that it wasn't Bobby's idea. Although just because Bobby doesn't want her coming out during his matches, doesn't mean he can't come out during MVP's match.
Before MVP vs McIntyre can start Lana comes out and Lashley looks confused. After the match Lashley locks the full nelson on McIntyre to see us out.
During the main event Sasha and Bayley are on commentary, the IIconics come to ringside to attack Sasha and slam Bayley on the announce table.
How to not get ruined with Options - Part 3a of 4 - Simple Strategies
Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM Post 2: Basics: Buying and Selling, the Greeks Post 3a: Simple Strategies Post 3b: Advanced Strategies Post 4a: Example of trades (short puts, covered calls, and verticals) Post 4b: Example of trades (calendars and hedges) --- Ok. So I lied. This post was getting way too long, so I had to split in two (3a and 3b) In the previous posts 1 and 2, I explained how to buy and sell options, and how their price is calculated and evolves over time depending on the share price, volatility, and days to expiration. In this post 3a (and the next 3b), I am going to explain in more detail how and when you can use multiple contracts together to create more profitable trades in various market conditions. Just a reminder of the building blocks: You expect that, by expiration, the stock price will … ... go up more than the premium you paid → Buy a call … go down more than the premium you paid → Buy a put ... not go up more than the premium you got paid → Sell a call ... not go down more than the premium you got paid → Sell a put Buying Straight Calls: But why would you buy calls to begin with? Why not just buy the underlying shares? Conversely, why would you buy puts? Why not just short the underlying shares? Let’s take long shares and long calls as an example, but this applies with puts as well. If you were to buy 100 shares of the company ABC currently trading at $20. You would have to spend $2000. Now imagine that the share price goes up to $25, you would now have $2500 worth of shares. Or a 25% profit. If you were convinced that the price would go up, you could instead buy call options ATM or OTM. For example, an ATM call with a strike of $20 might be worth $2 per share, so $200 per contract. You buy 10 contracts for $2000, so the same cost as buying 100 shares. Except that this time, if the share price hits $25 at expiration, each contract is now worth $500, and you now have $5000, for a $3000 gain, or a 150% profit. You could even have bought an OTM call with a strike of $22.50 for a lower premium and an even higher profit. But it is fairly obvious that this method of buying calls is a good way to lose money quickly. When you own shares, the price goes up and down, but as long as the company does not get bankrupt or never recovers, you will always have your shares. Sometimes you just have to be very patient for the shares to come back (buying an index ETF increases your chances there). But by buying $2000 worth of calls, if you are wrong on the direction, the amplitude, or the time, those options become worthless, and it’s a 100% loss, which rarely happens when you buy shares. Now, you could buy only one contract for $200. Except for the premium that you paid, you would have a similar profit curve as buying the shares outright. You have the advantage though that if the stock price dropped to $15, instead of losing $500 by owning the shares, you would only lose the $200 you paid for the premium. However, if you lose these $200 the first month, what about the next month? Are you going to bet $200 again, and again… You can see that buying calls outright is not scalable long term. You need a very strong conviction over a specific period of time. How to buy cheaper shares? Sell Cash Covered Put. Let’s continue on the example above with the company ABC trading at $20. You may think that it is a bit expensive, and you consider that $18 is a more acceptable price for you to own that company. You could sell a put ATM with a $20 strike, for $2. Your break-even point would be $18, i.e. you would start losing money if the share price dropped below $18. But also remember that if you did buy the shares outright, you would have lost more money in case of a price drop, because you did not get a premium to offset that loss. If the price stays above $20, your return for the month will be 11% ($200 / $1800). Note that in this example, we picked the ATM strike of $20, but you could have picked a lower strike for your short put, like an OTM strike of $17.50. Sure, the premium would be lower, maybe $1 per share, but your break-even point would drop from $18 to $16.50 (only 6% return then per month, not too shabby). The option trade will usually be written like this: SELL -1 ABC 100 17 JUL 20 17.5 PUT @ 1.00 This means we sold 1 PUT on ABC, 100 shares per contract, the expiration date is July 17, 2020, and the strike is $17.5, and we sold it for $1 per share (so $100 credit minus fees). With your $20 short put, you will get assigned the shares if the price drops below $20 and you keep it until expiration, however, you will have paid them the equivalent of $18 each (we’ll actually talk more about the assignment later). If your short put expires worthless, you keep the premium, and you may decide to redo the same trade again. The share price may have gone up so much that the new ATM strike does not make you comfortable, and that’s fine as you were not willing to spend more than $18 per share, to begin with, anyway. You will have to wait for some better conditions. This strategy is called a cash covered put. In a taxable account, depending on your broker, you can have it on margin with no cash needed (you will need to have some other positions to provide the buying power). Beware that if you don’t have the cash to cover the shares, it is adding some leverage to your overall position. Make sure you account for all your potential risks at all times. The nice thing about this position is that as long as you are not assigned, you don’t actually need to borrow some money, it won’t cost you anything. In an IRA account, you will need to have the cash available for the assignment (remember in this example, you only need $1800, plus trading fees). Let’s roll! Now one month later, the share price is between $18 and $22, there are few days of expiration left, and you don’t want to be assigned, but you want to continue the same process for next month. You could close the current position, and reopen a new short put, or you could in one single transaction buy back your current short put, and sell another put for next month. Doing one trade instead of two is usually cheaper because you reduce the slippage cost. The closing of the old position and re-opening of a new short position for the next expiration is called rolling the short option (from month to month, but you can also do this with weekly options). The croll can be done a week or even a few days before expiration. Remember to avoid expiration days, and be careful being short an option on ex-dividend dates. When you roll month to month with the same strike, for most cases, you will get some money out of it. However, the farther your strike is from the current share price, the less additional premium you will get (due to the lower extrinsic value on the new option), and it can end up being close to $0. At that point, given the risk incurred, you may prefer to close the trade altogether or just be assigned. During the roll, depending on if the share price moved a bit, you can adjust the roll up or down. For example, you buy back your short put at $18, and you sell a new short put at $17 or $19, or whatever value makes the most sense. Assignment Now, let’s say that the share price finally dropped below $20, and you decided not to roll, or it dropped so much that the roll would not make sense. You ended up getting your shares assigned at a strike price of $18 per share. Note that the assigned share may have a current price much lower than $18 though. If that’s the case, remember that you earned more money than if you bought the shares outright at $20 (at least, you got to keep the $2 premium). And if you rolled multiple times, every premium that you got is additional money in your account. Want to sell at a premium? Sell Covered Calls. You could decide to hold onto the shares that you got at a discount, or you may decide that the stock price is going to go sideways, and you are fine collecting more theta. For example, you could sell a call at a strike of $20, for example for $1 (as it is OTM now given the stock price dropped). SELL -1 ABC 100 17 JUL 20 20 CALL @ 1.00 When close to the expiration time, you can either roll your calls again, the same way that you rolled your puts, as much as you can, or just get assigned if the share price went up. As you get assigned, your shares are called away, and you receive $2000 from the 100 shares at $20 each. Except that you accumulated more money due to all the premiums you got along the way. This sequence of the short put, roll, roll, roll, assignment, the short call, roll, roll, roll, is called the wheel. It is a great strategy to use when the market is trading sideways and volatility is high (like currently). It is a low-risk trade provided that the share you pick is not a risky one (pick a market ETF to start) perfect to get create some income with options. There are two drawbacks though:
If the share dropped too much, you are stuck with it.
You will have to be patient for the share to go back up, but often you can end up with many shares at a loss if the market has been tanking. As a rule of thumb, if I get assigned, I never ever sell a call below my assignment strike minus the premium. In case the market jumps back up, I can get back to my original position, with an additional premium on the way. Market and shares can drop like a stone and bounce back up very quickly (you remember this March and April?), and you really don’t want to lock a loss. Here is a very quick example of something to not do: Assigned at $18, current price is $15, sell a call at $16 for $1, share goes back up to $22. I get assigned at $16. In summary, I bought a share at $18, and sold it at $17 ($16 + $1 premium), I lost $1 between the two assignments. That’s bad.
If the share goes up too fast, you missed some opportunity for gain, potentially big gains.
You will have to find some other companies to do the wheel on. If it softens the blow a bit, your retirement account may be purely long, so you’ll not have totally missed the upside anyway. A short put is a bullish position. A short call is a bearish position. Alternating between the two gives you a strategy looking for a reversion to the mean. Both of these positions are positive theta, and negative vega (see part 2). Now that I explained the advantage of the long calls and puts, and how to use short calls and puts, we can explore a combination of both. Verticals Most option beginners are going to use long calls (or even puts). They are going to gain some money here and there, but for most parts, they will lose money. It is worse if they profited a bit at the beginning, they became confident, bet a bigger amount, and ended up losing a lot. They either buy too much (50% of my account on this call trade that can’t fail), too high of a volatility (got to buy those NKLA calls or puts), or too short / too long of an expiration (I don’t want to lose theta, or I overspent on theta). As we discussed earlier, a straight long call or put is one of the worst positions to be in. You are significantly negative theta and positive vega. But if you take a step back, you will realize that not accounting for the premium, buying a call gives you the upside of stock up to the infinity (and buying a put gives you the upside of the stock going to $0). But in reality, you rarely are betting that the stock will go to infinity (or to $0). You are often just betting that the stock will go up (or down) by X%. Although the stock could go up (or down) by more than X%, you intuitively understand that there is a smaller chance for this to happen. Options are giving you leverage already, you don’t need to target even more gain. More importantly, you probably should not pay for a profit/risk profile that you don’t think is going to happen. Enter verticals. It is a combination of long and short calls (or puts). Say, the company ABC trades at $20, you want to take a bullish position, and the ATM call is $2. You probably would be happy if the stock reaches $25, and you don’t think that it will go much higher than that. You can buy a $20 call for $2, and sell a $25 call for $0.65. You will get the upside from $20 to $25, and you let someone else take the $25 to infinity range (highly improbable). The cost is $1.35 per share ($2.00 - $0.65). BUY +1 VERTICAL ABC 100 17 JUL 20 20/25 CALL @ 1.35 This position is interesting for multiple reasons. First, you still get the most probable range for profitability ($20 to $25). Your cost is $1.35 so 33% cheaper than the long call, and your max profit is $5 - $1.35 = $3.65. So your max gain is 270% of the risked amount, and this is for only a 25% increase in the stock price. This is really good already. You reduced your dependency on theta and vega, because the short side of the vertical is reducing your long side’s. You let someone else pay for it. Another advantage is that it limits your max profit, and it is not a bad thing. Why is it a good thing? Because it is too easy to be greedy and always wanting and hoping for more profit. The share reached $25. What about $30? It reached $30, what about $35? Dang it dropped back to $20, I should have sold everything at the top, now my call expires worthless. But with a vertical, you know the max gain, and you paid a premium for an exact profit/risk profile. As soon as you enter the vertical, you could enter a close order at 90% of the max value (buy at $1.35, sell at $4.50), good till to cancel, and you hope that the trade will eventually be executed. It can only hit 100% profit at expiration, so you have to target a bit less to get out as soon as you can once you have a good enough profit. This way you lock your profit, and you have no risk anymore in case the market drops afterwards. These verticals (also called spreads) can be bullish or bearish and constructed as debit (you pay some money) or credit (you get paid some money). The debit or credit versions are equivalent, the credit version has a bit of a higher chance to get assigned sooner, but as long as you check the extrinsic value, ex-dividend date, and are not too deep ITM you will be fine. I personally prefer getting paid some money, I like having a bigger balance and never have to pay for margin. :) Here are the 4 trades for a $20 share price: CALL BUY 20 ATM / SELL 25 OTM - Bullish spread - Debit CALL BUY 25 OTM / SELL 20 ATM - Bearish spread - Credit PUT BUY 20 ATM / SELL 25 ITM - Bullish spread - Credit PUT BUY 25 ITM / SELL 20 ATM - Bearish spread - Debit Because both bullish trades are equivalent, you will notice that they both have the same profit/risk profile (despite having different debit and credit prices due to the OTM/ITM differences). Same for the bearish trades. Remember that the cost of an ITM option is greater than ATM, which in turn is greater than an OTM. And that relationship is what makes a vertical a credit or a debit. I understand that it can be a lot to take in. Let’s take a step back here. I picked a $20/$25 vertical, but with the share price at $20, I could have a similar $5 spread with $15/$20 (with the same 4 constructs). Or instead of 1 vertical $20/$25, I could have bought 5 verticals $20/$21. This is a $5 range as well, except that it has a higher probability for the share to be above $21. However, it also means that the spread will be more expensive (you’ll have to play with your broker tool to understand this better), and it also increases the trading fees and potentially overall slippage, as you have 5 times more contracts. Or you could even decide to pick OTM $25/$30, which would be even cheaper. In this case, you don’t need the share to reach $30 to get a lot of profit. The contracts will be much cheaper (for example, like $0.40 per share), and if the share price goes up to $25 quickly long before expiration, the vertical could be worth $1.00, and you would have 150% of profit without the share having to reach $30. If you decide to trade these verticals the first few times, look a lot at the numbers before you trade to make sure you are not making a mistake. With a debit vertical, the most you can lose per contract is the premium you paid. With a credit vertical, the most you can lose is the difference between your strikes, minus the premium you received. One last but important note about verticals: If your short side is too deep ITM, you may be assigned. It happens. If you bought some vertical with a high strike value, for example: SELL +20 VERTICAL SPY 100 17 JUL 20 350/351 PUT @ 0.95 Here, not accounting for trading fees and slippage, you paid $0.95 per share for 20 contracts that will be worth $1 per share if SPY is less than $350 by mid-July, which is pretty certain. That’s a 5% return in 4 weeks (in reality, the trading fees are going to reduce most of that). Your actual risk on this trade is $1900 (20 contracts * 100 shares * $0.95) plus trading fees. That’s a small trade, however the underlying instrument you are controlling is much more than that. Let’s see this in more detail: You enter the trade with a $1900 potential max loss, and you get assigned on the short put side (strike of $350) after a few weeks. Someone paid expensive puts and exercised 20 puts with a strike of $350 on their existing SPY shares (2000 of them, 20 contracts * 100 shares). You will suddenly receive 2000 shares on your account, that you paid $350 each. Thus your balance is going to show -$700,000 (you have 2000 shares to balance that). If that happens to you: DON’T PANIC. BREATHE. YOU ARE FINE. You owe $700k to your broker, but you have roughly the same amount in shares anyway. You are STILL protected by your long $351 puts. If the share price goes up by $1, you gain $2000 from the shares, but your long $351 put will lose $2000. Nothing changed. If the share price goes down by $1, you lose $2000 from the shares, but your long $350 put will gain $2000. Nothing changed. Just close your position nicely by selling your shares first, and just after selling your puts. Some brokers can do that in one single trade (put based covered stock). Don’t let the panic set in. Remember that you are hedged. Don’t forget about the slippage, don’t let the market makers take advantage of your panic. Worst case scenario, if you use a quality broker with good customer service, call them, and they will close your position for you, especially if this happens in an IRA. The reason I am insisting so much on this is because of last week’s event. Yes, the RH platform may have shown incorrect numbers for a while, but before you trade options you need to understand the various edge cases. Again if this happens to you, don’t panic, breathe, and please be safe. This concludes my post 3a. We talked about the trade-offs between buying shares, buying calls instead, selling puts to get some premium to buy some shares at a cheaper price, rolling your short puts, getting your puts assigned, selling calls to get some additional money in sideways markets, rolling your short calls, having your calls assigned too. We talked about the wheel, being this whole sequence spanning multiple months. After that, we discussed the concept of verticals, with bullish and bearish spreads that can be either built as a debit or a credit. And if there is one thing you need to learn from this, avoid buying straight calls or puts but use verticals instead, especially if the volatility is very high. And do not ever sell naked calls, again use verticals. The next post will explain more advanced and interesting option strategies. --- Post 1: Basics: CALL, PUT, exercise, ITM, ATM, OTM Post 2: Basics: Buying and Selling, the greeks Post 3a: Simple Strategies Post 3b: Advanced Strategies Post 4a: Example of trades (short puts, covered calls, and verticals) Post 4b: Example of trades (calendars and hedges)
Your 2020 Season Survival Guide and R/Baseball Refresher!
Before we dive in, if you want to participate in the annual Call Your Shot season predictions contest, you can find it here. It's FINALLY coming! Welcome to the 2020 MLB Season! We are so glad you are here. Don't let the length of this post scare you, we just wanted to consolidate all the relevant information that people have questions about into one place to start the season off. This is your survival guide for the 2020 season, it should have all the pertinent information to answer most of your questions! If you are a brand new fan I'd recommend going through most of it, if you're a veteran you'll know which sections you'll want to read by their headings. My goal here is that both new and returning fans can learn how to better enjoy the season and know what's going on on Baseball this year. Okay, take some time and read through what you want to read through below! This is the fourth year of doing this. Every year I go through the previous years comments to find things that should be added or corrected for the next edition, so if you have any great resources or information that you think would be beneficial to add, please comment it below! Sections:
Introduction for new and renewed interest fans.
Rule changes for 2020
Finding a Team
Knowing Where Different Teams Stand
Your Team's Sub
Twitter, Podcasts, and Other General News/Analysis Sources
The Statistical Titans: Baseball Reference and Fangraphs
Where to watch? Your TV and Streaming Guide
MLB At Bat App
How to watch baseball.
Where to watch highlights and game recaps.
TL;DR: Find a way to enjoy the game.
Introduction for new and renewed interest fans.
Baseball normally has a long season. I don't just mean that in terms of time between opening day and the World Series (which can be considered long as it is), but also the 162 games played in 183 days, 18-20 times against the same 4 teams each. It can be daunting, and many people lose interest by "the dog days" of June and July. This year things are going to be a little different. With only 60 games on the schedule (assuming we make it through without a major clubhouse covid outbreak that cancels games versus that team) every game is going to matter about 3x as much as one in a normal regular season. Tensions will be high, but we might not feel it because there won't be that much crowd noise. THAT SAID - they're still playing 60 games in 66 days, which means almost every day for the next two months isn't just packed with baseball, they're packed with YOUR FAVORITE TEAMS baseball, which while exciting after months without any American sports in the regular season (MLS - a tournament is not the regular season) can end up feeling overwhelming when you just finished watching a late game go into extras then wake up to realize there's an afternoon game on in six hours. This guide is meant to help you if you wish to avoid being one of those who feels overwhelmed and loses interest a couple weeks after Opening Day. First and foremost if you are a new fan or newly returning, you must remember one thing: you do not need to watch every game. Many football fans, and even some basketball and hockey fans, find this difficult, they're used to setting aside a few nights a week to watch their team, and they can watch all the games. Baseball isn't like that. For the next two months, your team will only have 6 days where they won't be playing a game. And some of the games they play will start as early as 9:20am (Pacific Time), others will end after 1am (Eastern Time). If you miss a game it's okay, odds are there's another one tomorrow. If you miss a week, no big deal, hell if you get busy for a few months and aren't able to watch you team, that's not an issue, because you can still follow your team. Baseball is a game to be followed. In the old days it meant picking up the morning paper and checking the box scores. Now it means being able to have a final score texted/tweeted/messaged/emailed/what-evered to you the minute the game ends, or rolling over in bed when you can't sleep and grabbing your phone to check the West Coast scores. It means being able to check reddit in the morning to see any breaking news from across the league, or catch a story you missed. We live in a time where you can go to MLB.com and get a recap of every game from last night in less than 10 minutes. Honestly, baseball was made to be consumed, and the technology age makes it easier than ever, whether you want to spend hours every day pouring over stats and analysis, or 15 seconds to see how your team and their playoff rivals did today. The rest of this guide is mostly dedicated to ways that you can help yourself follow your team, and if you have time follow the entirety of MLB. Anyways, enough rambling, TL;DR Don't worry if you miss games, there'll be one tomorrow.
Rule Changes for 2020
For this season only (or so they say...):
The NL will utilize the DH full time.
In extra innings the person in the batting order immediately before the lead off hitter will start on second base.
Games suspended due to rain will continue play at a later date rather than be washed out and restarted.
Arguing within six feet of an umpire or participating in a fight will be met with heftier fines and suspensions this yaer.
Pitchers will be allowed a wet rag to be brought out from the dugout in lieu of being able to lick their fingers for better grip.
Each team has a 20 extra players in their "taxi squad" in addition to their active roster and 40-man roster.
Active rosters will start at 30 players, then will be cut to 28 after two weeks, then 26 after four weeks.
Spitting is not allowed.
Non-social distanced celebrations are not allowed.
Permanent (as any rule change can be in baseball) rule changes for 2020 and beyond:
Three batter minimum - pitcher entering the game must face a minimum of three batters unless they complete an inning.
The MLB Active Roster is expanded from 25 players to 26 players.
Finding a Team
I always recommend following the local team since you'll have more access to news about them in the local media and should be able to get their radio broadcast, as well as TV broadcasts of them if you have cable/satellite/streaming, and depending on where you're at the occasional over the air game, but if you don't live by a team or don't want to follow the local team, or are just looking for a second team to follow, I wrote this in depth guide to picking a team that's the right fit for you.
Knowing Where Different Teams Stand
Every year ESPN, Sports Illustrated, FOX, NBS, and every other sports related site puts out their season previews. These are great for getting a basic rundown of what is going on with each team, and a simple google search will bring up a plethora of possible articles to read. If what you really want is a fans perspective on what each team's expectations condensed into a few short comments, I'd highly recommend going through each teams day from our annual "Why will X team exceed expectations?" series. All the previous posts are linked in the Astros thread.
Alright, so plugging baseball on baseball seems a bit redundant, but I think it's a good reminder that this is a great hub for all your MLB news throughout the season while still letting you see the occasional amazing college/minor league/foreign league performance. During the season there are a number of features to keep you informed of all the goings on around baseball. Every day of the season (and a portion of the offseason) we have General Discussion threads we call Around the Horn. These are great places to ask questions and discuss anything that you want to know about baseball but don't feel like it deserves it's own post. In the Around the Horn post you'll be able to see a full schedule of what is going on around Baseball every week. Here are the weekly features: Daily: Nightly Pick'Em - A six year running contest to pick the result of one game every day. Details can be found in this thread. Monday: Power Rankings - A team of 30 fans from every team in baseball, led by masochist fearless leader kasutori_jack, releases their composite power rankings of the 30 teams. This leads to well thought out discussions and some in depth analysis, as well as salty fans crying about how their team is underrated (there may be more of the latter than the former, but it's still a great way to keep your finger on the pulse of how every team is doing). Monday (Unofficial) - The last few years thekmanpwnudwn has posted a State of the Subreddits post that gives the top post from each team's subreddit from the last week. This is a great roundup post for staying up to date on what all the different team fandoms are feeling, and helps you catch any milestones you might have otherwise missed. Tuesday: Weekly Awards - Led by lemcoe9 a different team of a fan from every team releases the results of their weekly (and monthly) voting for who the best position player and pitcher was since the last vote was taken. Once again, a great way to keep track of which players are on hot streaks, and who's dominating the league. Wednesday: Wild Card Wednesday - Each week a new contest, trivia game, or just out of the box fun thread will be stickied! Got an idea? Let the mods know! Thursdays: Division Discussions - We rotate between the Easts, Centrals, and Wests to do some more in depth talk about where the playoff races and teams stand. If you only have time for one baseball thread every week and want to keep up with the league, this is the thread to set aside time for. Friday: Trash Talk/Compliment/Complaint - FRIDAYS ARE FUN DAYS, WE ROTATE BETWEEN TRASH TALK, COMPLIMENT, TRASH TALK, AND COMPLAIN THREADS! TRADITION STATES ALL COMMENTS BE IN ALL CAPS AND ENDING IN EXCLAMATION POINTS! WE ROTATE RATHER THAN HAVE A SET DAY FOR EACH ALL SEASON BECAUSE IT'S A LONG SEASON AND ANY ONE OF THE THREE THREADS CAN GET STALE FAST IF YOU DON'T LEAVE TIME FOR MORE AMMUNITION! Saturday: Saturday is when we usually plug in occasional things that don't necessarily deserve weekly attention. Things like in depth stat discussions, memorobilia sharing, craft projects, etc. Sunday: Game of the Week - Sunday is the one day a week where we get together as a subreddit to watch a baseball game together, since it's the one time every week where there's only one game going on and there's guaranteed to be a game. The Sunday Night Baseball game thread is usually posted a couple hours before the first pitch. In addition the playoffs, and select premier match-ups (mostly at the very end of the season where there is a lot riding on a regular season game) we host game threads for all baseball users. These are neutral thread, for more info on less neutral ones skip to the next section. We may experiment with game threads in baseball for the MLB.tv Free Game of the Day this year. In addition to all these features, it really is a great place to keep up with breaking news and highlights. It'll be posted here minutes after someone tweets it, and long before it's on MLB.com. Team beat writers get the stories first, and it's easier to check in here a couple times a day than follow every one of them. Plus there's something the kids are calling "dank memes" (but not too many, because us mods don't allow too much moisture to get into the servers).
Your Team's Subreddit (And other team subs as well)
The mods at baseball have one goal - help you have the best possible reddit baseball experience, and a LOT of that is helping you get connected to other fans of your team (which feels a little like a cop-out because it means less work for us if you're doing more on your team's sub, but your team's mods aren't complaining.) One of the main draws of team subs (other than in depth discussion with like-fan-minded users, getting breaking news and analysis on your team, team-memes, and other reddit discussions that come up from a group of individuals who can agree on one thing) are game threads. At this time (to the best of my knowledge) every team sub hosts game threads for their team's games, and you can easily access them in the sidebar during the season by clicking on the team's logo in the schedule (we're working on getting that up to speed, MLB changed some parts of their RSS and background data and we've had to work around that to get our automated system back up). We like to keep the game threads in team subs for a few reasons, one of which is we want to support the team subs and send them relevant traffic when we can because they really do an amazing job, another is because with 15 games a day this place would look like crap if we had game threads for every game or let users post them as they please (we've tried it, it blots out news, discussion, and highlights and looks like crap, baseball doesn't have only a couple days set aside for games or focus on marquee match ups like many other sports, it's 2430 games played in 183 days and is better when it's spread out.) Even if you're not a game thread person though, getting connected with a good team sub can make disappointing seasons more bearable, and great seasons more exciting, and I know plenty of users that said that their team's sub basically keeps them fans. Team subs are also a great place to get connected to...
Twitter, Podcasts, and other General News/Analysis Sources
Going to be honest here, I don't use twitter and I do not frequently read other people's blogs. I know many people do and enjoy it, and I believe the best way to find the people to follow/sites to visit that interest you the most are to hang around your team's sub and note which Tweets/Sites that are linked to that most often peak your interest. Your list of favorite baseball writers is going to be different than my favorite list, and finding the right twitter personalities, podcasts hosts, and bloggers can make game analysis more interesting for you even if your team is playing like crap and it's the middle of July. Here are some common suggestions for some general baseball twitter accounts and podcasts to get you started, but like I said, find what you like and follow those: Twitter
The Statistical Titans: Baseball Reference and Fangraphs
Literally every day you will find a link or to BaseballReference.com or Fangraphs.com here, it's a given, and it's because these are the two most extensive free baseball databases that are easy to navigate. If you want to look up anything about baseball history, check Baseball Reference, if you want to look up how players stack up with non-proprietary advanced metrics or read an insightful blog post about why someone is overrated/underrated or overperforming/underperforming, check Fangraphs. With these two sites you have all the stats and figures you need to make a competent argument for basically anything you want with a little cherry picking. A large part of the modern baseball world is statistics and you're going to find yourself getting more immersed in discussing the game if you can get a handle on all the terms getting thrown around. If you are brand new to baseball, take a little while to get to know the game before diving into these sites, but if you have a handle on the basics and are ready to know what this WAR everyone is talking about is, dive into the glossaries and find the statistics. When you get the basics, creating your own analysis doesn't seem as daunting, and one of the reasons I love baseball is that I can deconstruct pretty much every play and find some meaning behind it. If you are like that and enjoy numbers, theoretical projections, and breaking things down into simple figures before reconstructing them into something long and beautiful, then learning the basics of sabrmetrics will make you a baseball fan for life. If, on the other hand, you just want to enjoy the game for the beautiful pastime that it is by watching, then we've got a little bit to go through...
Where to Watch? - Your TV and Streaming Guide
So a big part of baseball is, you know, actually being able to watch the games (though as I talk about at the end, it might not necessarily be the case for you, and that doesn't mean you can't enjoy baseball, skip down and see what I'm talking about in the final section). First off, if you are looking for free games to watch, you are in luck! MLB.tv streams one game a day for free on MLB.com and Yahoo.com. These games are subject to local blackouts (details on those in the MLB.tv section) but are definitely worth watching if you're trying to see if you'll enjoy baseball, or just need a free baseball fix. Facebook is also streaming one game a week during the season for free. The other free games available are from May 18 to July 13 on Saturday night and Thursday nights in September when FOX airs games on their OTA affiliated networks. Believe it or not, TV antennas still work in most areas, and these games are free to watch. Some teams also broadcast select games on OTA networks in their region. Okay, so now the more expensive stuff. If you have even the most basic cable package (or log in information) you probably have ESPN. ESPN airs games every Sunday Night as well as Wednesday Night and Opening Weekend. These games are also available on ESPN Go. You also probably have a regional sports channel. This is where almost all of your local teams games will be aired. Here is a decent breakdown of every team and what network they are carried on. TBS is also on even the most basic networks, they air games the final 13 Sundays of the regular season in the afternoon. FS1 and FOX carry baseball games almost every Saturday of the season, and MLB Network carries games pretty much every day. A list of currently scheduled national broadcasts is available here, not all games have been chosen so there will be more added to the list. For all these networks (except for the Dodgers, Orioles, and Nationals regional networks) there are options to stream the games online provided you have cable login information for the channel. During the playoffs FS1, TBS, and MLB Network will carry most of the games, with ESPN carrying a wild card game and FOX carrying the World Series. Now there are also streaming services that grant access to most of the previously mentioned channels:
Sling TV Orange package gets you ESPN, ESPN 2, and TBS.
Sling TV Blue package gets you FOX, FS1, FS2, TBS, and most regional sports networks.
Youtube TV gets you FOX, ESPN, ESPN 2, FS1, TBS, MLB Network, and some regional sports networks.
HULU Live gets you FOX, ESPN, ESPN 2, FS1, FS2, TBS, and your regional sports networks.
Playstation Vue Access gets you FOX, ESPN, ESPN 2, FS1, FS2, and TBS.
Playstation Vue Core adds MLB Network to the Access channels.
Playstation Vue Sports Extra adds regional sports networks in addition to your other channels.
AT&T TV Now Live a Little gets you FOX, ESPN, ESPN 2, FS1, and TBS and your regional sports networks.
AT&T TV Now Just Right adds MLB Network to the Live a Little channels.
AT&T TV Now Go Big adds FS2 to the Just Right channels.
FUBO Premier gets you FOX, FS1, and your regional sports networks
Also, ESPN+ will carry select games pretty much daily throughout the season.
MLB.TV - the Ultimate Fan Investment
Alright, so a few things to cover with this, first of all YOU WILL NOT BE ABLE TO LEGALLY STREAM IN MARKET GAMES IF YOU LIVE IN THE UNITED STATES. MLB.tv uses your IP address to see where you are located, and if it pings back that you are in a team's home market it will not let you watch the game LIVE. Here is where you can find what games MLB.tv will black you out from. National broadcasts on ESPN, FOX, and TBS are also subject to blackouts within the United States (MLB Network games are not). Before you ask, yes there are less than legal ways to get around this (spoofing your IP address, subreddit dedicated to mlb streams, etc.), but I won't be talking about those in detail here. IF YOU ARE OUTSIDE OF THE UNITED STATES AND CANADA, YOU WILL HAVE NO BLACKOUTS. Even if you are blacked out, you will be able to watch the game 90 minutes after it finishes, so if you work a late shift or stay up late it might be worth it for you anyways even if you only want to follow one team. Military members and college students, don't forget to apply your 35% discount! "But I don't want to watch EVERY out of market game, I just want to watch MY team!" Cool, for $25 less there's a single team option that will allow you to watch all your team's non-blacked out games! Personally, I'd pay the extra $25 for the opportunity to watch every Kershaw, Bumgarner, and Scherzer start, or put the Cubs on in the background while working on a Friday afternoon, but to each their own. "But I don't want to commit for a full year!" That's okay, there's a monthly option as well in case you know there are months where you can't watch as much. Some of the fun features of MLB.tv include the ability to watch four games at once and quickly swap your audio from one to another (seriously, I'm never on commercial break when I'm watching baseball, unless there's only one game on I'm able to watch it all, and in September that's huge) and condensed games. What are condensed games? They go through and cut out all the time between pitches and innings, meaning if you want to watch a whole game in less than a half hour (or are searching desperately for a play to make a .gif or streamable out of that for some reason isn't considered a highlight) it's really easy. If you're someone who really wants to get into the game but can't figure out how to grind through watching a full game, Condensed Games are great for keeping up with a team while you learn the little details between pitches that somehow make watching the catcher twiddle his fingers exciting for some fans. Also, new this year, MLB has added some great baseball documentaries to your MLB.tv subscription, giving you access to more than just games for the first time. In addition, there are two great resources to enhance your total immersion into baseball if there are multiple games going on. Please note for both of these you must already be logged into MLB.tv to make them work. The first, and most basic, is Brooks Baseball's MLB.TV Redzone. It will automatically take you to the highest leverage game going on, and will automatically shift you to another game between innings OR if another game enters a higher leverage situation. For a more personalized touch, The Baseball Guage has MLB.TV Game Changer which lets you customize your preferences so MLB.tv will always switch to the game that is most relevant to you. This is great if you play fantasy and want to keep up with your players, are waiting for someone to hit a milestone, or if you want to make sure your action is broken into to follow a no-hitter in progress. It also gives you a free subscription to...
MLB AtBat - The Most Underrated Way to Stay Connected to Baseball
MLB AtBat is MLB's official application. It comes in two versions, the free version which has ads but is useful for keeping up to date with all the scores, and the paid version ($19.99 for the year of $2.99 monthly) which gives you access to ad-free content, Gameday on your mobile device, and (most valuable) access to every team's radio stream for every game during the season and postseason completely blackout free. If there's a day game, you can bet I'm listening to it at work, if I'm mowing the lawn on a Saturday I'm listening to a game, when I can't sleep at night, on comes a West Coast game. To get the paid version you must download the free version, then subscribe within the app, or log into an MLB account that has MLB.tv. Baseball was made to be on the radio, it's a sport that is very easy to follow the action with the right announcer. At work (or school) it's great because you can half listen, and when the announcer gets excited you can instantly tune back in to hear what's going on. This is the most underrated way to stay connected to your team throughout the year. Before I could afford MLB.tv, this was the way to go, and it honestly makes me question every year whether getting the MLB.tv package is worth is when I can get 80% of the entertainment value from listening to the games (and every year I manage to forget to unsubscribe, for many reasons listed above). Gameday on mobile is also a great feature, it lets you quickly check in on the action during brief recesses in meetings (or under the table during meetings), or breaks between classes (or under a desk in classes). This is honestly my primary means of keeping track of Twins games throughout the year. My wife thinks I'm crazy when I could just watch the game, but instead am nervously checking my phone every couple minutes. IF I WATCH I JINX THE TEAM, HONEY!
How to watch baseball?
So this is a question that we get from many new fans who are just trying to figure out what the hell is going on and why people find this game so fascinating. I'll get the elephant in the room out of the way, yes there are some "boring" parts of watching baseball on TV. The camera fans to a batter spitting and adjusting his gloves, the pitcher adjusts his crotch then licks his fingers, random shots of a bored looking manager, etc. When you are actually at the ballpark you can be watching where the catcher and fielders set up to try to predict the pitch that is coming (read The Hidden Language of Baseball by Paul Dickson for some great insight into how to interpret this), but on TV it's not usually the case. This is where I have some suggestions for new fans trying to get into it. First off, if you are looking for just a relaxing day, embrace the slow pace with a beer and veg out on the couch while watching. It's meant to be slow and relaxing (until it gets tense and exciting, usually with runners on). Seriously, when was the last time you just sat and did nothing? Mid July afternoon games are a perfect way to reach that zen of half-consciousness, until something happens to get you sucked into the action. Another option to stay engaged is keeping score. I find keeping score relaxing and looking back through a scorebook can be fun to see what you were doing a few years ago (except for that damn unfinished scorecard from 2015 where A-Rod hit the most predictable home run in Twins-Yankees history and I sent my scorecard flying to the other side of the room). As NPR once put it, keeping score is a knowledge making activity, and if you have the time and patience for it it is a great way to learn the game. There are a couple different guides to keeping score, and most scorebooks/cards will have a brief example of how to do so. If you have any questions, the Around the Horn thread is a great place to ask! Gamethreads are another way to get together with other baseball fans and pass the time between pitches, especially in team subs you get to know the regulars and conversations start to wonder away from baseball at times throughout the game, and that's fine. Baseball is an excuse to enjoy a summer day. For those that want to actually understand what is going on during that time, though, there are some options. Watching Baseball Smarter by Zack Hample (who despite his reputation on this subreddit knows some stuff and actually pops in from time to time to comment on different things) is a good starting place for new fans. Baseball for Dummies and The Complete Idiots Guide to Baseball are also good starting points for those willing to sit and read for a little bit. For those who don't want to read a book, I guess I can touch on what I'm looking for between pitches. A big part of baseball is pitch selection, so scouting out a pitchers repertoire of pitches is a good starting point, BrooksBaseball.net has great cheat sheets on every pitcher in the game, and PitcherList.com has a visual example of each pitcher's pitches so you can see what you can be looking for. Anyways, I mention that because the whole reason the catcher is twiddling his fingers behind the plate is to go over with the pitcher what pitch is going to be thrown. What I'm watching for between pitches is where the catcher is setting up behind the plate and guessing which pitch is going to be thrown. A 2-0 and 3-1 count are known as hitters counts because the pitcher needs to throw a strike or risk walking the batter, when the count reaches either of those pay attention, because the hitters going to be looking for his perfect pitch and there's probably going to be some action on the field. 0-1, 0-2, and 1-2 are pitcher's counts, look for curveball, slider or other somewhat nasty pitch to be thrown to get the batter to swing at a bad pitch, or a fastball inside to catch them off guard. If you have any questions about this, go ahead and ask in an around the horn thread.
Where to watch highlights and game recaps.
There are many many places to see highlights and game recaps, this is not an exhaustive list, but is a good start. For highlights, bigger highlights will often be posed here on baseball a few minutes after they occur, if you wish to post them please familiarize yourself with the subreddit rules. They also appear relatively quickly on MLB.com in each games Gameday area. For a pretty slick collection of highlights from across MLB, https://baseball.theate is a great place to exclusively watch highlights. There are a few ways to get great game recaps. If you have MLB Network, every day Quick Pitch is an hour-long show that recaps every game from the previous day. It usually starts after MLB Tonight (about 10pm EDT) or whatever game MLB Network is showing finishes up, and runs until 10am EDT the next day. MLB.com also puts out recaps of every game by the next morning, usually a 2-5 minutes quick rundown of highlights that can be found on the game recap. It also puts out Fastcast videos on youtube and their website every morning which has a brief rundown of all the games from the previous day. Here's an example of a Fastcast from two seasons ago. If you want one concise place to see most of these, efitz11 was amazing last season and posted video links to every game recap and fastcast in the daily Around the Horn thread. Here's an example. I am unsure if they plan to continue it this year, but it would be surely appreciated!
TL;DR Finding what you enjoy about the game.
When it boils down to it, baseball is about finding entertainment and enjoyment, and don't let anyone try to tell you how to enjoy baseball. If you want nothing to do with statistical analysis and just want to enjoy what's going on on the field, don't let anyone tell you you aren't enough of a fan, and if you want to dissect a player into their strengths and components using statcast and advanced metrics don't let anyone tell you you're reading into the game too much. You can follow one team, and only one team, or you can follow multiple teams, don't let anyone tell you you're not a true fan for wearing another team's gear or enjoying their games. You might enjoy bat flips and flamboyance, or reserved speedy home run trots. You might not even enjoy physically watching a game (especially not if your team isn't playing), but find yourself loving keeping track of your team through the season and tracking your players or maybe just the thrill of the standings race and scoreboard watching or maybe you just love all the numbers that get thrown around and arguing about their relevancy. That's okay, eventually I believe enjoyment of the game itself will come, but even if it doesn't, the long baseball season is still creating a place of enjoyment for you, and that's what matters. If you have any questions, once again, feel free to ask them in our daily Around the Horn thread, or below in the comments, or if you really want to feel free to PM with questions and I'd be happy to answer. So watch games this week and join in the discussion here, you'll naturally find yourself gravitating towards certain players or teams and enjoying different aspects of the game. Baseball is a long season, find what you enjoy, stick to it, dwell on it, and enjoy it. TL;DR for the TL;DR - Baseball is fun
[Serious] On the oil demand crisis and why you should buy tanker calls this week, but why $NAT is a meme you should dump
Final edit (05-06) - Sorry that this went tits up for everyone. I lost most of my $20k as well. As you saw, $STNG massacred earnings by over 50% on EPS, strong revenue beat, and really strong guidance as predicted...then went down 10%. What I didn't understand, apparently, was that the market doesn't give a fuck about that in the tanker space...no more DD for me, back to meme stocks I guess. Monday morning edit: Offer up your wives if you got in this morning before the pump. Take some profits. Okay idiots, I'm going to drop some actual useful DD for you. tl;dr and positions at the top, because I know that for the majority of you, "Fedex parked in front of White House, buy calls", is as sophisticated DD as you can handle. This is a long post, so for those of you who actually want to understand why you're taking a position and learn about a commodity, read on; for those of you who don't, fuck off. _______________________________
Tankers not only begin earnings this week but said earnings will be the best they have been in at least 5 years, if not the last decade, due to all-time-high tanker rates that began spiking in mid-March. Rates are so high that, say, companies with clean LR2 tankers currently run a spot price of 8x the 5 year historical average and a single 2 month spot voyage is enough to be profitable on the entire year. Make bets on tanker companies that are trading below their NAV, will post strong FCF, were well positioned for the spike in prices, have large fleets, and have the right types of ships. $NAT is a risky stock because it's actually the among the worst across every single one of these dimensions of any tanker company. WHY NAT IS A MEME: Let me draw you an analogy: WSB is a class in school, and you've all decided not to be homosexual for a day. NAT is a girl in the class. Now that you're not homos, you all start sending NAT dick pics and showering her with attention, assuming that she is extremely high value. However, in your autistic haste, you all forgot to look around and fail to realize that there are 15 other girls in the classroom; moreover, they are all way hotter than NAT. NAT is now overvalued and many of you are too attached to admit you had no idea what the fuck you were doing and are - now. POSITIONS: I like EURN and STNG, but there are many other viable tanker plays you could look at. Check out TNK. DSSI, DHT, FRO etc; DYOR. Low Risk Position Examples
EuroNav ($EURN) $12.50C 6/15
Scorpio Tankers ($STNG) $23C 6/15
Moderate Risk Positions
$EURN $12.50C 5/15
$STNG $25C 5/15
Higher Risk Positions
$EURN $15C 5/15
$STNG $30C 5/15
Legendary Autistic Risk Positions
$EURN $17.50C 5/15
$STNG $35C 5/15
$NAT, any calls
SECTION 1: Overview on Oil Demand Crisis
If you understand oil demand destruction and contango, skip ahead to section 2. However, based on the fact that people continue to pile in on USO and UCO calls and leaps under the justification of "hurr durr oil must go up, it's so cheap", and half of you are still bagholding $NAT, I assume 75%+ of you are retarded. Many of you still probably have no idea what's happening with oil and why it's fucked long-term. The tl;dr here is that even with OPEC+'s historical cuts, we're still drastically oversupplied. The problem with oil is it's not your meme SPY calls that are in the cloud; oil is a physical product and when you trade USO, you're trading (theoretically) on receiving delivery of oil. We are almost completely out of oil storage already. You may ask, well u/safuros, if that's true, why don't we turn off the wells? Markets naturally handle supply and demand. Oil production isn't that simple. The reason every country is sandbagging and trying to get other countries to cut oil is that there's a game theory element in play, as well as an oil well intrinsic function issue. Once conventional oil wells reduce their production to roughly 50-60% of output, they cannot go any lower without risking damaging the wells, which are extraordinarily expensive to get the rights to drill on/lease and is like risking a gallon of water when you've only taken a sip. Thus, the only option to reduce further is to entirely stop production and cap the well, and then, assuming your lease on the well hasn't lapsed by the time you can re-open it, uncap it, both of which are extraordinarily expensive options that are also time-consuming. Therefore, many oil companies would rather just sell at a crappy rate, because that's still a long-term better play than turning off; you're paying for the well either way. Game-theory wise, why the fuck should you be the well to turn off, if other's aren't? Add in the fact that everyone cheats on oil production cuts and the Saudis and Russians are trying to fuck each other as well as US shale, and you've got a nice oil crisis. Per comments, note that US oil production is easier to spin up and down than overseas oil, but that doesn't really matter because we can't stop everyone else from producing and we aren't going to bear the entire burden ourselves. This leads to the USO/UCO shit show and negative WTI price. Normally, futures holders offload their contracts to buyers who intend to actually take physical delivery as the option expiration date draws near. However, because there is no storage and no demand, none of the typical buyers actually wanted to buy, so you had a bunch of tendie seeking autists desperately trying to offload their contracts so that they wouldn't have 5 dumptrucks of oil barrels delivered to their homes and be completely fucked, such that they were willing to pay people (i.e. negative price) to take their contracts. As for contango, well, google it. Finally, this problem isn't going away any time soon because unless you're so truly deluded as to believe that we'll not only have a V shaped re-opening in terms of social, commercial, and consumer behavior, but that fuel consumption across airlines and cars will rebound immediately, we're on a long term path to demand recovery. This is like having a clogged bathtub full of water and turning the faucet from 100% on to 50% on - you're still fucked until the faucet turns off (impossible) or the clog goes away more than enough to offset the faucet (not happening for a while). This is why experts broadly agree that the OPEC+ cuts are meaningless and that groups like Morgan Stanley believe demand destruction of oil will persist until well into 2021. _______________________________
"If an MR can get $30,000 per day on a spot voyage, it covers its costs for a year...If an LR2 gets $150,000 or $160,000 a day, it’s the same...you could lay the ship up, earn zero for the next ten months, and still make a profit on the ship."
Guess who owns the most clean-fuel ready LR2's that are exposed to the spot price? $STNG Now, don't be stupid and assume that rates will hold this high all year. That said, even if rates went to $0 by mid summer, the rates for Q2 are so high such that it'd still be a higher revenue year than last year. And rates aren't going to $0...they're going to continue to stay above the historical average, just not as high as now, due to the crazy demand destruction.
Miscellaneous point of clarification: I see a lot of dumbasses posting about what numbers will look like if the entire fleet is booked out for and extrapolating to the entire year (usually in reference to $NAT). That's ridiculous and not how it works, so don't just assume number of tankers * spot rate * 365 = revenue for year = tendies.
SECTION 3: Why $STNG and $EURN?
I really need to go fuck your wife soon, so I'm making the sections shorter and shorter; however, Ii'll still tell you way $STNG and $EURN are good bets. First, let's start with NAV - Net Asset Value. If you don't know what this means, Google it. (edit) Disclaimer - As I mentioned at the top of the post, there are plenty of other viable tanker options. $STNG and $EURN are my plays so that's why this is focused on them. As you (should) know, NAV is something you estimate and can be calculated differently based on different assumptions. Trading below NAV means the stock is underpriced as is, and that's before record earnings and guidance. By most accounts, $EURNs NAV is at least $13 currently, and $STNG is close to $30. They trade at $10 and $21, respectively, right now. $STNG isn't even at its average price for 2019, but 2020 is objectively a better year unless a meteor blows up their fleet Secondly, fleet size and type. $STNG has one of the largest fleets in the world, and in particular, they have the most LR2 tankers. If you go back up to the graph, you'll see that clean LR2 tankers are commanding an absurd rate, spiking to as high as $250,000 for a few days and currently settled around $150-175k/day, compared to a 5-year historical value of below $25k. $EURN has a solid fleet of VLCC's which are commanding a strong rate, and EURN has good financials - most their boats are fairly new, they don't have a ton of debt. Lastly, they're among the first up on the earnings block, with STNG reporting 5/6 this week and EURN reporting on 5/7. Compare that to NAT, who reports the 23rd, so theta will eat away at what remains of your atrophied testicles every day. That said, regardless of theta, STNG and EURN are really strongly positioned. I expect that earnings will be solid and likely beat, but not by a crazy amount because rates only started really jacking up in late March, and rates in early Q1 were actually pretty low. However, as many of you still don't fucking understand, earnings don't matter nearly as much asguidance. That's why you dumbfucks all complain about companies beating earnings but still tanking and then creating stupid conspiracy theories about "MM is fucking rigging this market". The good news here is that earnings should be solid, while guidance for is going to be euphoric. _______________________________
SECTION 4: Why is $NAT a meme, and mistakes I see people making
Fleet size misconception: Cramer meme'd NAT, infamously calling out that they have the largest fleet in the world. In fact, if you actually tried to verify anything you ever fucking did, you could have googled this and realized that NAT has a fleet that, just like your dick, is one of the smallest around. Moreover, they have the wrong type of boats - they primarily have Suezmax boats, which command an okay rate, but aren't close to the best boats to have right now.
No investigation of NAV: NAT's NAV, by all accounts, is close to $3. They are trading at close to $6, and were nearing $8-9 at peak pump. Why the fuck on god's green earth would you buy a company with the wrong type of boats, the wrong fleet size, trading at over 2x NAV, when everyone else is around or below their NAV and has a better fleet?
Massive debt and shitty assets: NAT is saddled in debt, is historically shittily managed (read their earnings report if you know how, but you probably don't know how), and all their boats are at the end of their lifetime, meaning NAT not only has horrible debt but will need to buy a shit ton of new boats very soon
Stupid assumptions on revenue: We covered this earlier, but no, just because demand is high, it doesn't mean every boat is going to get booked at the spot price. Many boats are on existing contracted rates from last quarter, and the ones who are not are not all getting booked out at once.
Looking at ATH as an indicator: If i see another one of you dumb fucks pointing out that NAT used to trade at $16 a share 5 years ago, I will personally find you, tape you to a chair, and shit down your mouth. NAT has issued a shit ton more shares. You are probably the same group who thinks that USO rose from $2 to $18 last week.
The ONLY justification for NAT is now that it's been memed and retail knows all about it, it will probably rise again if the other tankers do well. You can make that play, and you might even make money. Just make sure to dump that shit before earnings because they're not going to be good enough to justify the rise and there's going to be a stupid dump. _______________________________
As proof that I put money where my mouth is, I have ~$20k riding in on these positions: - 40 $STNG 5/15 $23C - 200 $EURN 5/15 $12.5C _______________________________
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