RUMBLE: Rumble Jumble (+875%)
We managed to check in a multi-bag. We stay humble.
Executive Summary
At what point does performance look tacky?
We are not working on a Dozer Coin, despite all mumble.
We monetized free speech and will use the credit wisely.
1. Recap Situation
We ranted around online censorship while figuring out how to keep our greed in check. A one-twenty risk-return opportunity with a higher than fifty per cent chance of success rarely comes along. We must confess we couldn’t stick to the MacroDoζer five per cent risk capital rule, but we were prepared to lose a little more if it hadn’t worked out.
Thank god the flight got canceled. We would have missed that chance. How to make money en woke.
Check out the original BrainDozer article below.
2. Why Now?
So here we are with that multi-bag performance. It looks tacky.
I remember in the old days; I guess 1995, when markets slowly started to fire up my heart, tons of free trial market letters were hitting our letterbox. They wouldn’t stop shooting out absurd performances, handpicked or hand-made, only to request thousands of Deutsche Mark for the hottest new trades in return. It felt dirtier than most casinos I served time in a little later in my early twenties when most of the letter-gurus were long gone serving their time separate from society.
So what to do with a tacky outlier trade like this?
Stop working and become a caricature of ourselves? Change the brand to MacDoze J. Ray III? Or maybe issue a Dozer Coin and print our own money?
None of the above. We close the trade and focus on the next. Why now? Because we only have fourteen days to maturity, we don’t want to risk losing it over the last two weeks. We might prepare a new Rumble trade with a January expiration; the market gods will tell.
Our animal spirits say the price will continue to fall when all short-equity and long-put positions have been covered, sold, or exercised. Depending on the pay-out statistics, selling a straddle at a lower strike might make another interesting story to tell on Christmas Eve.
3. Trade Execution
3.1 Trade Entry - Nov 8, 2022
Total: 3.80 Credit.
Mid price at 4.00 with technically no risk. However, we got filled at 3.80, hence a risk-return of 1-19.
3.2 Trade Exit - Dec 2, 2022
Total: 1.95 Debit.
Mid price at 1.95. We got filled at 2.05.
The absolute return of this trade is
3.80 - 2.05 = 1.75
The capital used was 0.20, resulting in a return on capital of
1.75 / 0.20 = 875.0%