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Virtual Reality: Where it is and where it's going
VR is not what a lot of people think it is. It's not comparable to racing wheels, Kinect, or 3DTVs. It offers a shift that the game industry hasn't had before; a first of it's kind. I'm going to outline what VR is like today in despite of the many misconceptions around it and what it will be like as it grows. What people find to be insurmountable problems are often solvable. What is VR in 2020? Something far more versatile and far-reaching than people comprehend. All game genres and camera perspectives work, so you're still able to access the types of games you've always enjoyed. It is often thought that VR is a 1st person medium and that's all it can do, but 3rd person and top-down VR games are a thing and in various cases are highly praised. Astro Bot, a 3rd person platformer, was the highest rated VR game before Half-Life: Alyx. Lets crush some misconceptions of 2020 VR:
The buy-in is $400 on average, not $1000 as that is Valve Index pricing.
Motion sickness is easily avoidable for most people by sticking to games that have 1:1 fully synced or mostly synced body movement like Beat Saber or even Alyx with teleportation.
Most VR games offer locomotion options so teleporting is certainly not a required norm.
You don't need a PC or console; Oculus Quest is the start of the new norm where headsets are self-contained.
You are not required to stand or move about. VR has always allowed you to relax in the same way as traditional gaming by sitting on the couch with a gamepad.
VR isn't anti-social. It's actually the pinnacle of social communication devices. What it is (currently) is potentially isolating depending on how you use it.
People will disabilities often think VR is not for them, when in all likelihood it probably is, because most disabilities work fine with VR and even have a lot to gain from the use of it.
The setup of VR is much faster and quicker than it was just a few years ago thanks to inside-out tracking and standalones. A Quest user can get going within 10 seconds.
So what are the problems with VR in 2020?
Low resolution and low FoV.
Wireless isn't standard.
Only a few released AAA exclusive games.
Potential for eye strain and headaches.
Some headsets feel really outdated. (PSVR)
Full body avatars don't align correctly.
Despite these downsides, VR still offers something truly special. What it enables is not just a more immersive way to game, but new ways to feel, to experience stories, to cooperate or fight against other players, and a plethora of new ways to interact which is the beating heart of gaming as a medium. To give some examples, Boneworks is a game that has experimental full body physics and the amount of extra agency it provides is staggering. When you can actually manipulate physics on a level this intimately where you are able to directly control and manipulate things in a way that traditional gaming simply can't allow, it opens up a whole new avenue of gameplay and game design. Things aren't based on a series of state machines anymore. "Is the player pressing the action button to climb this ladder or not?" "Is the player pressing the aim button to aim down the sights or not?" These aren't binary choices in VR. Everything is freeform and you can basically be in any number of states at a given time. Instead of climbing a ladder with an animation lock, you can grab on with one hand while aiming with the other, or if it's physically modelled, you could find a way to pick it up and plant it on a pipe sticking out of the ground to make your own makeshift trap where you spin it around as it pivots on top of the pipe, knocking anything away that comes close by. That's the power of physics in VR. You do things you think of in the same vain as reality instead of thinking inside the set limitations of the designers. Even MGSV has it's limitations with the freedom it provides, but that expands exponentially with 6DoF VR input and physics. I talked about how VR could make you feel things. A character or person that gets close to you in VR is going to invade your literal personal space. Heights are possibly going to start feeling like you are biologically in danger. The idea of tight spaces in say, a horror game, can cause claustrophobia. The way you move or interact with things can give off subtle almost phantom-limb like feelings because of the overwhelming visual and audio stimulation that enables you to do things that you haven't experienced with your real body; an example being floating around in zero gravity in Lone Echo. So it's not without it's share of problems, but it's an incredibly versatile gaming technology in 2020. It's also worth noting just how important it is as a non-gaming device as well, because there simply isn't a more suitably combative device against a world-wide pandemic than VR. Simply put, it's one of the most important devices you can get right now for that reason alone as you can socially connect with no distancing with face to face communication, travel and attend all sorts of events, and simply manage your mental and physical health in ways that the average person wishes so badly for right now. Where VR is (probably) going to be in 5 years You can expect a lot. A seismic shift that will make the VR of today feel like something very different. This is because the underlying technology is being reinvented with entirely custom tech that no longer relies on cell phone panels and lenses that have existed for decades.
The resolution will be around the equivalent of 1080p monitors, so you'd probably be looking at 4K x 4K per eye or higher.
The field of view will be 30-40% higher.
Eye strain and headaches will be solved via varifocal displays and VR will become even more comfortable visually than 2D displays, as they still have these issues which can be only be solved in stereoscopic displays.
Isolation will be solved with mixed reality reconstruction enabling the real world to bleed into VR on a per object basis in real time. VR headsets are now in all senses MR headsets. (VR+AR in one device)
There will be plenty of non-gaming apps gaining bigger traction like some sort of social space or event-based app.
PlayStation and Xbox will both support VR and a PSVR2 headset will have launched.
That's enough to solve almost all the issues of the technology and make it a buy-in for the average gamer. In 5 years, we should really start to see the blending of reality and virtual reality and how close the two can feel Where VR is (probably) going to be in 10 years
VR is now effectively photorealistic in the visual and audio department and it's extremely hard if not impossible at times to tell the difference between the real world and the virtual world.
Quite a number of people start to live big chunks of their lives in VR.
Light-field 6DoF video will be common allowing you to move inside live videos or a playback of a video that are in every way indistinguishable from reality, at least visually/audibly.
Streaming becomes mainstream as an option to consume games and it is now starting to become feasible to stream VR games as well.
VAR start to replace traditional displays and devices with monitors, phones and handhelds especially on their way out, but TVs very likely still hold a strong presence due to their communal nature.
If consoles still exist, their new features are now focused mostly on VR and how to integrate as seamlessly as possible into the VAR experience. Traditional gaming is still likely the most popular way to play, but consoles must find ways to market towards the new.
VAR are the new norm for work, education, communication, entertainment and a lot of aspects of daily life.
AAA VRMMORPGs start to get popular and become the new standard for the genre, revitalizing it.
The metaverse starts to form in some small way, not yet reaching the magnitude of something like the OASIS, but still a very large and versatile world or web of worlds where the phrase "Do anything, go anywhere, become anyone, be with anyone" is the truest it's ever been.
In short, as good as if not better than the base technology of Ready Player One which consists of a visor and gloves. Interestingly, RPO missed out on the merging of VR and AR which will play an important part of the future of HMDs as they will become more versatile, easier to multi-task with, and more engrained into daily life where physical isolation is only a user choice. Useful treadmills and/or treadmill shoes as well as haptic suits will likely become (and stay) enthusiast items that are incredible in their own right but due to the commitment, aren't applicable to the average person - in a way, just like RPO. At this stage, VR is mainstream with loads of AAA content coming out yearly and providing gaming experiences that are incomprehensible to most people today. Overall, the future of VR couldn't be brighter. It's absolutely here to stay, it's more incredible than people realize today, and it's only going to get exponentially better and more convenient in ways that people can't imagine.
Wall Street Week Ahead for the trading week beginning June 29th, 2020
Good Saturday afternoon to all of you here on StockMarket. I hope everyone on this sub made out pretty nicely in the market this past week, and is ready for the new trading week ahead. Here is everything you need to know to get you ready for the trading week beginning June 29th, 2020.
Fragile economic recovery faces first big test with June jobs report in the week ahead - (Source)
The second half of 2020 is nearly here, and now it’s up to the economy to prove that the stock market was right about a sharp comeback in growth. The first big test will be the June jobs report, out on Thursday instead of its usual Friday release due to the July 4 holiday. According to Refinitiv, economists expect 3 million jobs were created, after May’s surprise gain of 2.5 million payrolls beat forecasts by a whopping 10 million jobs. “If it’s stronger, it will suggest that the improvement is quicker, and that’s kind of what we saw in May with better retail sales, confidence was coming back a little and auto sales were better,” said Kevin Cummins, chief U.S. economist at NatWest Markets. The second quarter winds down in the week ahead as investors are hopeful about the recovery but warily eyeing rising cases of Covid-19 in a number of states. Stocks were lower for the week, as markets reacted to rising cases in Texas, Florida and other states. Investors worry about the threat to the economic rebound as those states move to curb some activities. The S&P 500 is up more than 16% so far for the second quarter, and it is down nearly 7% for the year. Friday’s losses wiped out the last of the index’s June gains. “I think the stock market is looking beyond the valley. It is expecting a V-shaped economic recovery and a solid 2021 earnings picture,” said Sam Stovall, chief investment strategist at CFRA. He expects large-cap company earnings to be up 30% next year, and small-cap profits to bounce back by 140%. “I think the second half needs to be a ‘show me’ period, proving that our optimism was justified, and we’ll need to see continued improvement in the economic data, and I think we need to see upward revisions to earnings estimates,” Stovall said. Liz Ann Sonders, chief investment strategist at Charles Schwab, said she expects the recovery will not be as smooth as some expect, particularly considering the resurgence of virus outbreaks in sunbelt states and California. “Now as I watch what’s happening I think it’s more likely to be rolling Ws,” rather than a V, she said. “It’s not just predicated on a second wave. I’m not sure we ever exited the first wave.” Even without actual state shutdowns, the virus could slow economic activity. “That doesn’t mean businesses won’t shut themselves down, or consumers won’t back down more,” she said.
In the second half of the year, the market should turn its attention to the election, but Sonders does not expect much reaction to it until after Labor Day. RealClearPolitics average of polls shows Democrat Joe Biden leading President Donald Trump by 10 percentage points, and the odds of a Democratic sweep have been rising. Biden has said he would raise corporate taxes, and some strategists say a sweep would be bad for business, due to increased regulation and higher taxes. Trump is expected to continue using tariffs, which unsettles the market, though both candidates are expected to take a tough stance on China. “If it looks like the Senate stays Republican than there’s less to worry about in terms of policy changes,” Sonders said. “I don’t think it’s ever as binary as some people think.” Stovall said a quick study shows that in the four presidential election years back to 1960, where the first quarter was negative, and the second quarter positive, stocks made gains in the second half. Those were 1960 when John Kennedy took office, 1968, when Richard Nixon won; 1980 when Ronald Reagan’s was elected to his first term; and 1992, the first win by Bill Clinton. Coincidentally, in all of those years, the opposing party gained control of the White House.
The stocks market’s strong second-quarter showing came after the Fed and Congress moved quickly to inject the economy with trillions in stimulus. That unlocked credit markets and triggered a stampede by companies to restructure or issue debt. About $2 trillion in fiscal spending was aimed at consumers and businesses, who were in sudden need of cash after the abrupt shutdown of the economy. Fed Chairman Jerome Powell and Treasury Secretary Steven Mnuchin both testify before the House Financial Services Committee Tuesday on the response to the virus. That will be important as markets look ahead to another fiscal package from Congress this summer, which is expected to provide aid to states and local governments; extend some enhanced benefits for unemployment, and provide more support for businesses. “So much of it is still so fluid. There are a bunch of fiscal items that are rolling off. There’s talk about another fiscal stimulus payment like they did last time with a $1,200 check,” said Cummins. Strategists expect Congress to bicker about the size and content of the stimulus package but ultimately come to an agreement before enhanced unemployment benefits run out at the end of July. Cummins said state budgets begin a new year July 1, and states with a critical need for funds may have to start letting workers go, as they cut expenses. The Trump administration has indicated the jobs report Thursday could help shape the fiscal package, depending on what it shows. The federal supplement to state unemployment benefits has been $600 a week, but there is opposition to extending that, and strategists expect it to be at least cut in half. The unemployment rate is expected to fall to 12.2% from 13.3% in May. Cummins said he had expected 7.2 million jobs, well above the consensus, and an unemployment rate of 11.8%. As of last week, nearly 20 million people were collecting state unemployment benefits, and millions more were collecting under a federal pandemic aid program. “The magnitude here and whether it’s 3 million or 7 million is kind of hard to handicap to begin with,” Cummins said. Economists have preferred to look at unemployment claims as a better real time read of employment, but they now say those numbers could be impacted by slow reporting or double filing. “There’s no clarity on how you define the unemployed in the Covid 19 environment,” said Chris Rupkey, chief financial economist at MUFG Union Bank. “If there’s 30 million people receiving insurance, unemployment should be above 20%.
This past week saw the following moves in the S&P:
The economy is moving in the right direction, as many economic data points are coming in substantially better than what the economists expected. From May job gains coming in more than 10 million higher than expected and retail sales soaring a record 18%, how quickly the economy is bouncing back has surprised nearly everyone. “As good as the recent economic data has been, we want to make it clear, it could still take years for the economy to fully come back,” explained LPL Financial Senior Market Strategist Ryan Detrick. “Think of it like building a house. You get all the big stuff done early, then some of the small things take so much longer to finish; I’m looking at you crown molding.” Here’s the hard truth; it might take years for all of the jobs that were lost to fully recover. In fact, during the 10 recessions since 1950, it took an average of 30 months for lost jobs to finally come back. As the LPL Chart of the Day shows, recoveries have taken much longer lately. In fact, it took four years for the jobs lost during the tech bubble recession of the early 2000s to come back and more than six years for all the jobs lost to come back after the Great Recession. Given many more jobs were lost during this recession, it could takes many years before all of them indeed come back.
The economy is going the right direction, and if there is no major second wave outbreak it could surprise to the upside. Importantly, this economic recovery will still be a long and bumpy road.
Nasdaq - Russell Spread Pulling the Rubber Band Tight
The Nasdaq has been outperforming every other US-based equity index over the last year, and nowhere has the disparity been wider than with small caps. The chart below compares the performance of the Nasdaq and Russell 2000 over the last 12 months. While the performance disparity is wide now, through last summer, the two indices were tracking each other nearly step for step. Then last fall, the Nasdaq started to steadily pull ahead before really separating itself in the bounce off the March lows. Just to illustrate how wide the gap between the two indices has become, over the last six months, the Nasdaq is up 11.9% compared to a decline of 15.8% for the Russell 2000. That's wide!
In order to put the recent performance disparity between the two indices into perspective, the chart below shows the rolling six-month performance spread between the two indices going back to 1980. With a current spread of 27.7 percentage points, the gap between the two indices hasn't been this wide since the days of the dot-com boom. Back in February 2000, the spread between the two indices widened out to more than 50 percentage points. Not only was that period extreme, but ten months before that extreme reading, the spread also widened out to more than 51 percentage points. The current spread is wide, but with two separate periods in 1999 and 2000 where the performance gap between the two indices was nearly double the current level, that was a period where the Nasdaq REALLY outperformed small caps.
To illustrate the magnitude of the Nasdaq's outperformance over the Russell 2000 from late 1998 through early 2000, the chart below shows the performance of the two indices beginning in October 1998. From that point right on through March of 2000 when the Nasdaq peaked, the Nasdaq rallied more than 200% compared to the Russell 2000 which was up a relatively meager 64%. In any other environment, a 64% gain in less than a year and a half would be excellent, but when it was under the shadow of the surging Nasdaq, it seemed like a pittance.
The US equity market made its most recent peak on June 8th. From the March 23rd low through June 8th, the average stock in the large-cap Russell 1,000 was up more than 65%! Since June 8th, the average stock in the index is down more than 11%. Below we have broken the index into deciles (10 groups of 100 stocks each) based on simple share price as of June 8th. Decile 1 (marked "Highest" in the chart) contains the 10% of stocks with the highest share prices. Decile 10 (marked "Lowest" in the chart) contains the 10% of stocks with the lowest share prices. As shown, the highest priced decile of stocks are down an average of just 4.8% since June 8th, while the lowest priced decile of stocks are down an average of 21.5%. It's pretty remarkable how performance gets weaker and weaker the lower the share price gets.
It's hard to believe that sentiment can change so fast in the market that one day investors and traders are bidding up stocks to record highs, but then the next day sell them so much that it takes the market down over 2%. That's exactly what happened not only in the last two days but also two weeks ago. While the 5% pullback from a record high back on June 10th took the Nasdaq back below its February high, this time around, the Nasdaq has been able to hold above those February highs.
In the entire history of the Nasdaq, there have only been 12 periods prior to this week where the Nasdaq closed at an all-time high on one day but dropped more than 2% the next day. Those occurrences are highlighted in the table below along with the index's performance over the following week, month, three months, six months, and one year. We have also highlighted each occurrence that followed a prior one by less than three months in gray. What immediately stands out in the table is how much gray shading there is. In other words, these types of events tend to happen in bunches, and if you count the original occurrence in each of the bunches, the only two occurrences that didn't come within three months of another occurrence (either before or after) were July 1986 and May 2017. In terms of market performance following prior occurrences, the Nasdaq's average and median returns were generally below average, but there is a pretty big caveat. While the average one-year performance was a gain of 1.0% and a decline of 23.6% on a median basis, the six occurrences that came between December 1999 and March 2000 all essentially cover the same period (which was very bad) and skew the results. Likewise, the three occurrences in the two-month stretch from late November 1998 through January 1999 where the Nasdaq saw strong gains also involves a degree of double-counting. As a result of these performances at either end of the extreme, it's hard to draw any trends from the prior occurrences except to say that they are typically followed by big moves in either direction. The only time the Nasdaq wasn't either 20% higher or lower one year later was in 1986.
In the mid-1980s the market began to evolve into a tech-driven market and the market’s focus in early summer shifted to the outlook for second quarter earnings of technology companies. Over the last three trading days of June and the first nine trading days in July, NASDAQ typically enjoys a rally. This 12-day run has been up 27 of the past 35 years with an average historical gain of 2.5%. This year the rally may have begun a day early, today and could last until on or around July 14. After the bursting of the tech bubble in 2000, NASDAQ’s mid-year rally had a spotty track record from 2002 until 2009 with three appearances and five no-shows in those years. However, it has been quite solid over the last ten years, up nine times with a single mild 0.1% loss in 2015. Last year, NASDAQ advanced a solid 4.6% during the 12-day span.
Tech Historically Leads Market Higher Until Q3 of Election Years
As of yesterday’s close DJIA was down 8.8% year-to-date. S&P 500 was down 3.5% and NASDAQ was up 12.1%. Compared to the typical election year, DJIA and S&P 500 are below historical average performance while NASDAQ is above average. However this year has not been a typical election year. Due to the covid-19, the market suffered the damage of the shortest bear market on record and a new bull market all before the first half of the year has come to an end. In the surrounding Seasonal Patten Charts of DJIA, S&P 500 and NASDAQ, we compare 2020 (as of yesterday’s close) to All Years and Election Years. This year’s performance has been plotted on the right vertical axis in each chart. This year certainly has been unlike any other however some notable observations can be made. For DJIA and S&P 500, January, February and approximately half of March have historically been weak, on average, in election years. This year the bear market ended on March 23. Following those past weak starts, DJIA and S&P 500 historically enjoyed strength lasting into September before experiencing any significant pullback followed by a nice yearend rally. NASDAQ’s election year pattern differs somewhat with six fewer years of data, but it does hint to a possible late Q3 peak.
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Micron Technology, Inc. $48.49
Micron Technology, Inc. (MU) is confirmed to report earnings at approximately 4:00 PM ET on Monday, June 29, 2020. The consensus earnings estimate is $0.71 per share on revenue of $5.27 billion and the Earnings Whisper ® number is $0.70 per share. Investor sentiment going into the company's earnings release has 71% expecting an earnings beat The company's guidance was for earnings of $0.40 to $0.70 per share. Consensus estimates are for earnings to decline year-over-year by 29.00% with revenue increasing by 10.07%. Short interest has increased by 7.6% since the company's last earnings release while the stock has drifted higher by 8.0% from its open following the earnings release to be 0.9% below its 200 day moving average of $48.94. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 11, 2020 there was some notable buying of 46,037 contracts of the $60.00 call expiring on Friday, July 17, 2020. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 8.4% move in recent quarters.
General Mills, Inc. (GIS) is confirmed to report earnings at approximately 7:00 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.04 per share on revenue of $4.89 billion and the Earnings Whisper ® number is $1.10 per share. Investor sentiment going into the company's earnings release has 69% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 25.30% with revenue increasing by 17.50%. Short interest has decreased by 9.4% since the company's last earnings release while the stock has drifted higher by 2.7% from its open following the earnings release to be 7.8% above its 200 day moving average of $54.91. Overall earnings estimates have been revised higher since the company's last earnings release. On Wednesday, June 24, 2020 there was some notable buying of 8,573 contracts of the $60.00 call expiring on Friday, July 17, 2020. Option traders are pricing in a 6.6% move on earnings and the stock has averaged a 3.0% move in recent quarters.
FedEx Corp. (FDX) is confirmed to report earnings at approximately 4:00 PM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $1.42 per share on revenue of $16.31 billion and the Earnings Whisper ® number is $1.65 per share. Investor sentiment going into the company's earnings release has 61% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 71.66% with revenue decreasing by 8.41%. Short interest has increased by 10.4% since the company's last earnings release while the stock has drifted higher by 43.9% from its open following the earnings release to be 7.6% below its 200 day moving average of $140.75. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 25, 2020 there was some notable buying of 1,768 contracts of the $145.00 call expiring on Thursday, July 2, 2020. Option traders are pricing in a 4.6% move on earnings and the stock has averaged a 7.7% move in recent quarters.
Conagra Brands, Inc. (CAG) is confirmed to report earnings at approximately 7:30 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.66 per share on revenue of $3.24 billion and the Earnings Whisper ® number is $0.69 per share. Investor sentiment going into the company's earnings release has 66% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 83.33% with revenue increasing by 23.99%. Short interest has decreased by 38.3% since the company's last earnings release while the stock has drifted higher by 6.3% from its open following the earnings release to be 6.4% above its 200 day moving average of $30.68. Overall earnings estimates have been revised higher since the company's last earnings release. On Thursday, June 11, 2020 there was some notable buying of 3,239 contracts of the $29.00 put expiring on Thursday, July 2, 2020. Option traders are pricing in a 4.7% move on earnings and the stock has averaged a 10.8% move in recent quarters.
Constellation Brands, Inc. (STZ) is confirmed to report earnings at approximately 7:30 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.91 per share on revenue of $1.97 billion and the Earnings Whisper ® number is $2.12 per share. Investor sentiment going into the company's earnings release has 53% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 13.57% with revenue decreasing by 13.69%. Short interest has increased by 20.8% since the company's last earnings release while the stock has drifted higher by 25.2% from its open following the earnings release to be 5.2% below its 200 day moving average of $178.34. Overall earnings estimates have been revised lower since the company's last earnings release. On Tuesday, June 9, 2020 there was some notable buying of 888 contracts of the $195.00 call expiring on Friday, October 16, 2020. Option traders are pricing in a 3.1% move on earnings and the stock has averaged a 5.7% move in recent quarters.
Capri Holdings Limited (CPRI) is confirmed to report earnings at approximately 6:30 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $0.32 per share on revenue of $1.18 billion and the Earnings Whisper ® number is $0.34 per share. Investor sentiment going into the company's earnings release has 39% expecting an earnings beat The company's guidance was for earnings of $0.68 to $0.73 per share. Consensus estimates are for earnings to decline year-over-year by 49.21% with revenue decreasing by 12.20%. Short interest has increased by 35.1% since the company's last earnings release while the stock has drifted lower by 56.7% from its open following the earnings release to be 44.0% below its 200 day moving average of $25.67. Overall earnings estimates have been revised lower since the company's last earnings release. On Thursday, June 4, 2020 there was some notable buying of 11,042 contracts of the $17.50 put expiring on Friday, August 21, 2020. Option traders are pricing in a 10.8% move on earnings and the stock has averaged a 6.7% move in recent quarters.
X Financial (XYF) is confirmed to report earnings at approximately 5:00 PM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.09 per share. Investor sentiment going into the company's earnings release has 25% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 55.00% with revenue increasing by 763.52%. Short interest has increased by 1.0% since the company's last earnings release while the stock has drifted lower by 1.2% from its open following the earnings release to be 37.7% below its 200 day moving average of $1.47. Overall earnings estimates have been unchanged since the company's last earnings release. The stock has averaged a 4.9% move on earnings in recent quarters.
Acuity Brands, Inc. (AYI) is confirmed to report earnings at approximately 8:40 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $1.14 per share on revenue of $809.25 million and the Earnings Whisper ® number is $1.09 per share. Investor sentiment going into the company's earnings release has 42% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 51.90% with revenue decreasing by 14.60%. Short interest has increased by 48.5% since the company's last earnings release while the stock has drifted higher by 2.4% from its open following the earnings release to be 23.4% below its 200 day moving average of $110.25. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 9.2% move on earnings and the stock has averaged a 8.2% move in recent quarters.
Methode Electronics, Inc. (MEI) is confirmed to report earnings at approximately 7:00 AM ET on Tuesday, June 30, 2020. The consensus earnings estimate is $0.77 per share on revenue of $211.39 million. Investor sentiment going into the company's earnings release has 45% expecting an earnings beat. Consensus estimates are for year-over-year earnings growth of 24.19% with revenue decreasing by 20.53%. Short interest has increased by 6.2% since the company's last earnings release while the stock has drifted lower by 1.7% from its open following the earnings release to be 9.0% below its 200 day moving average of $32.97. Overall earnings estimates have been revised lower since the company's last earnings release. Option traders are pricing in a 18.4% move on earnings and the stock has averaged a 8.1% move in recent quarters.
UniFirst Corporation (UNF) is confirmed to report earnings at approximately 8:00 AM ET on Wednesday, July 1, 2020. The consensus earnings estimate is $1.17 per share on revenue of $378.28 million and the Earnings Whisper ® number is $1.25 per share. Investor sentiment going into the company's earnings release has 44% expecting an earnings beat. Consensus estimates are for earnings to decline year-over-year by 52.44% with revenue decreasing by 16.63%. Short interest has decreased by 2.7% since the company's last earnings release while the stock has drifted higher by 14.1% from its open following the earnings release to be 8.4% below its 200 day moving average of $186.14. Overall earnings estimates have been revised lower since the company's last earnings release. The stock has averaged a 7.0% move on earnings in recent quarters.
Hello comrades! Thanks to everyone who filled out the survey. I'll break down the survey below for those who want a transcription of it or for those who want a more organized presentation instead of the raw data. Here is a link to the survey results. For comparison, here is the previous survey. Please discuss your thoughts on the survey in the comments, and also continue the conversation started in the old thread about what you want to see for the sub’s future We had 600 responses to the survey, which given the size of the subscriber base is a statistically significant amount that we can confidently extrapolate from. Question 1: Age demographics We are trending younger than the previous survey, with zoomers making a major jump in demographics at the expense of 26-30 and 31-40 year olds. The early 20s seemed to hold relatively consistent. I am unsure if this means the old people are leaving or if more young people are joining. 25% of us are under 17, 29% are 18-21, 21% are 21-25, 14% are 26-30, and the rest are older. Question 2: Gender Identity Overall, we are very much dominated by men at 79.5% of the sub. There has been a slight decrease in male identification in favour of women and non-binary. But this is definitely a weakness of the sub. We need to work on ways to be more inclusive of non cis-male voices. Question 3: How non-white are we The answer is very mayonnaise at 76% non-PoC. We had an almost 5% drop from a year ago which is great but I think we can do much better. Question 4: LGBTQ+ This one is much better. We seem to have a strong representation from LGBTQ+ folks which is consistent from last year, and it is good to see the number be pushed up by around 4 points from 32% to 36%. Question 5: How non-cis are we Considering around 3% of the population is trans according to GLAAD, we seem to have decent representation on the subreddit at 7.7%. Question 6: Where do we live This question is worth looking at on the google form. They all are, but this one particularly so what with all the different possible answers. Suffice it to say, we are very much situated in the imperial core. This is somewhat problematic but to be expected given the overall reddit userbase. This is something that we should definitely try to combat. Since last year it seems the US portion has decreased by around 5 points to favor eastern europe, canada, and some growth outside the imperial core. Top five regions:
Western Europe and British Isles (tie at 9.8%)
Northern Europe (3.2%)
Question 7: Living environment Largely unchanged from last year, socialism is split roughly evenly between city living and suburbia, with a small but important section living in a rural area. Question 8: English 75% of the sub considers English to be their primary language, which is a slight drop from last year. The top non-english primary languages are as follows in descending order:
Question 9: Religion. We are largely not a religious sub, and the demographics here have largely not changed in the last year. Top religious beliefs (above 1%) are:
Spiritual but not religious- 11%
Roman Catholic- 4%
Sunni Muslim- 1.7%
Honorable mention to the 5 people who wrote in "Materialist" lol, I like you. Question 10: How long have you been a socialist We've shifted down to subscribers having less overall experience with socialism, losing from all categories above 3 years and gaining on all the lower choices. This could be from an influx of new people from the election, and hopefully it does not mean we are losing more experienced folks in large numbers. Half of the sub has been a socialist for either a year or 3-5 years, with relatively even responses for the options on either end of the spectrum Question 11: Education We seem to be an educated group. Almost 50% of the sub either has a college degree or is actively pursuing one, with 12% of us having gone to college without achieving a degree. 20% are currently in secondary education. 7% have or are chasing a graduate degree, and 6% had their education stop at secondary level. Question 12: Employment 37% of us are students who are not employed, and 18% of us are students with a job. 25% of us have a full time job, while 7% have a part time job and 7% are unemployed. Smaller amounts are either self-employed or of a non-working population. Question 13: Relationship to production Thankfully, 85% of us are either working class or dependents of working class folks. 5% are petite-bourgiosie small business owners or self employed. 3% of us are (hopefully class betraying) capitalists. Question 14: Living situation Pretty even split between renting our living situation and living rent free with family/friends. Of the rest, 13% of us have alternate living arrangements such as home ownership or mortgages. 15 and 16: Living conditions The majority of us are at comfortable or adequate arrangements (around 80%), pointing again to reddit's overall demographic. 20% of us would describe their situation as poor. 41% of us did not have difficulty in in our budgets. Top things socialism had difficulty affording over the last few months in descending order:
Necessary repairs such as home and auto
Time for the fun stuff. Top labels people use to describe their politics (over 5%) of socialism are in descending order:
Anarchist and/or Anarcho-Communist
Marxism-Leninism-Maoist and Communalist (tied)
More people are identifying as a tendency from the last survey, which means more people are reading Questoin 18: Who are we reading There were a lot of answers to this one, so I will just list our top ten most widely read or read about comrades
Karl Marx (duh)
Overall as a sub I think we definitely need to read more. Its great that we can recognize the big names on that top ten list, but the real proof of how widely read our sub base is is in the smaller names. There are a lot of people on there I hope to see increase next time! Honorable mentions from the write in list that got more than 2-3 submissions include Richard Wolff, Victor Serge, Daniel DeLeon, Stirner, and Assata Shakur 19: Working with liberals This question not worded very well or needs to be broken up into a few different questions, as working with liberals can take many forms and is something the next survey will take into consideration. Showing up to a protest organized by a liberal NGO is very different than actively campaigning for a Democrat or other capitalist party. This is a question that will definitely change next time. Anyhow, a majority of the sub supports working with liberal capitalist organizations; 40% in a limited capacity and 18% are fully on board for it. A strong majority opposes this kind of involvement, 21% saying they are generally opposed to the idea and 14% taking a principled stance against such tactics. 20: Organization 28% of us are actively organized in some way, which is great! But those are rookie numbers, we gotta pump those up. 29% of us are searching for an org in some way, and 28% are not actively looking but plan on doing so sometime in the future. 12% of us have no intentions of organizing. 21: Unions A disappointingly large 76% of the sub have never been unionized. Given that a quarter of the sub is under 17, that's partially excusable but the rest of us need to get on it! 13% of the sub actively belongs in a union, and 5% have been in one in the past. 8 of us are actively organizing one, good on you! 21: Types of organization For those that are organized, the most popular methods of organizing on socialism appears to be:
Mainstream labor union (45%)
Big tent parties such as DSA (35%)
Non-party organization (20%)
Explicitly radical labor unions (15%)
Tendency specific revolutionary party (14%)
Internationally affiliated party (10%)
Tenants union (4%)
By far the largest stumbling block appears to be lack of options in a given geographic area. There's only one way to fix that however, these things don't just spring up out of the ground fully formed! After that follows more access to information, more free time, too many shitty socialists, too much time spent working, more money, organizations not open enough, and transportation difficulties
Overall people seem to run the full spectrum of satisfaction with their organizations. 45% of those organized are happy with what they got, and 55 either see much room for improvement or are not happy with the organizations.
How should socialism be achieved:
Overall we tend to be more revolutionary. Only a quarter of the sub takes a reformist stance which is good. Almost half the sub is open to seizing power through elections if it is possible, same with those who think we should explicitly have a revolution. Doing so using general strikes seems to win support from everyone. Overall, this is an important question that the sub does seem a bit split on.
The struggles of oppressed groups:
This one had great responses. An overwhelming majority (87%) chose the correct response that socialism must fight form all struggles. There were a few different takes on the **wrong** answers, 7% think these struggles should be ignored until after the revolution and 2% actively call these issues divisive. I will politely yet firmly ask both of the latter to leave, or even better get educated.
I seriously need to consider editing or removing this question because I am not sure what it really achieves. 41% of the sub rejects the existence of bourgeois rights in the first place. 43% acknowledge that free speech is a right but does not trust a capitalist state to honestly enforce it. 18% take an absolutist stance on it, and 22% are happy with how speech is currently treated under capitalism.
There is roughly 2/3 split on this, the majority calling for open borders and the minority calling for some sort of loose restrictions but still maintaining freedom of movement.
Overall, the sub is in favor of planned economies, and are split over the question of more decentralized production for luxury goods or local community needs. Only 8% of the sub is totally against planning. This is a moderate change from the last survey where just over half the sub was for total planning.
Just under half (48%) of the sub is unsure if they will live to see socialism, and 36% of the sub think they will. This is almost exactly the same as last time.
State of the subreddit:
Most users have a positive time here, with 43% giving us a 4/5. This has also not changed much since the last survey. Hooray!
How often do you use the sub:
We see a full spectrum of use. Fairly evenly split between a once or twice a month, a few times a week, and almost every day.
Only 7% of the sub posts, and 31% comments. Not much to say here other than much more people are commenting now than they were a year ago, which is good for how we are able to engage folks!
No Mods No Masters
I have to say I am seriously dissapointed with the subreddit here. Us mods are more or less unelected self appointed regulators, and 2/3 of the subs of a *socialist* subreddit passed on the opportunity to tell us to take our authority and jump in a lake. For shame smh.
There seems to be an overall mandate from the users that we are doing a good job at keeping this a healthy place for socialists to interact with each other. Under 5% think we are doing a poor job.
Largely the same story here, though there is a bit of a jump in dissaproval. Overall the majority of the sub is happy with our stance on liberal politics, and 10% think we are not modding liberals correctly.
US Election and the subreddit:
Sub seems a bit split on this, but overall the mandate appears to be to remove liberal content, emphasize organizing over voting, while not being super aggressive with banning politically center folks. Just over a third (37%) think socdem content should not be removed, but frankly I do not see our policy on supporting capitalist party content changing anytime soon
58% of the sub would be interesting in some form of organized reading circles. Look out for this in the future, we are unsure how this will manifest but something will be decided on. We will probably have a separate thread for organizing this in the future to choose what pieces we should do, but feel free to spitball in the comments for the *form* you would like to see this take. Cheers, Mods Team
What are SPACs? A special purpose acquisition company (SPAC) is a company formed solely to raise capital through an initial public offering (IPO) for the purpose of acquiring an existing company. SPACs are also called “blank check companies” because they IPO without having any actual business operations. SPACs are generally formed by investors, or sponsors, with expertise in a particular business sector, with the intention of pursuing deals in that area. The founders generally have at least one acquisition target in mind, but they don't identify that target to avoid extensive disclosures during the IPO process. A SPAC generally has two years to complete a deal (by a “reverse merger”) or face liquidation. Companies aiming to go public with this route are typically 1x-5x larger in terms of market cap than the SPAC itself. The SPAC Process The money SPACs raise in an IPO is placed in an interest-bearing trust account. These funds can’t be used except to complete an acquisition or to return the money to investors if the SPAC is liquidated. So, in practice, these companies will typically have a $10 floor on their share price, as that is what must be paid out to holders of shares if the company does not successfully reach a deal. If the deal is not completed in time, the warrants expire worthless and the remaining funds are distributed back to the shareholders. After a SPAC has completed an acquisition the SPAC then trades as any other company listed on an exchange. If you came across a SPAC stock several years after the acquisition, you would likely have no idea it ever started as a SPAC unless you did some research into the company’s history. Finally, the SPAC symbol and name will change to reflect the company that has been purchased. Often the SPAC takes on the name of the new company, but that is not always the case. If you own either common shares or warrants in your brokerage account, those shares will automatically be converted to the new name/symbol. The SPAC is Back SPACs were popular before the financial crisis, but use of SPACs declined following the market meltdown. Recently, though, an excess of capital has led investors to seek out merger and acquisition opportunities more aggressively, and that's led to the return of SPACs. More SPACs went public in 2018 than in any year since 2007, raising more than $10 billion in capital for use in searching for investment opportunities. In 2019, the figure was even higher $13.6 billion —more than four times the $3.2 billion they raised in 2016. SPACs have also now also attracted big-name underwriters such as Goldman Sachs, Credit Suisse, and Deutsche Bank, as well as retired or semi-retired senior executives looking for a shorter-term opportunity. Through May 2020, $9.8 billion has been raised in 21 SPAC IPOs. Recent High Profile SPACs Example 1: SPCE. Before it was Virgin Galactic, it was a SPAC trading under the ticker IPOA. Social Capital Hedosophia raised over $650 million in 2017. Example 2: DKNG. Before it was Draft Kings, it was Diamond Eagle Acquisition Corp. The SPAC originally raised $350 million in May 2019, listing its units under the symbol DEACU, which comprised common shares and 1/3 warrants. When the investors approved the merger, the SPAC's common shares traded at $17.53, a 75% return from the $10 offer price. Example 3: NKLA. Before it was Tesla-killer Nikola, it was VTIQ. VectoIQ Acquisition raised $200 million in a May 2018 IPO. In March 2020, the SPAC agreed to merge with Nikola Corp at an implied enterprise value of about $3.3 billion. The rest is history. Units, Shares and Warrants Units When the IPO occurs, a SPAC generally offers Units – generally at $10 per Unit. These Units are comprised of one share of common stock (Share) and a Warrant (or portion of a warrant) to purchase common stock (generally exercisable at $11.50). Depending on size, prominence/track record of sponsors, and investment bank leading IPO, Units may consist of one Share of common stock plus one full Warrant, ½ of one warrant or ⅓ of one warrant. Shortly after the IPO, the common stock (Shares) and Warrants included in SPAC Units become separable. At that point, the Warrants and Shares trade separately alongside the unseparated Units. Shares SPAC common stock is linked to the SPAC’s secure trust account. SPACs are structured such that the trust account contains at least $10.00 per public share. Liquidity may be limited in the open market for Shares but the defined liquidation term of SPAC common equity can provide for a relatively attractive yield with an option to own a SPAC's future acquisition target. If the SPAC fails to complete a business combination in the required timeframe, all public shares are redeemed for a pro rata portion of the cash held in the trust account. Companies will typically have a $10 floor on their share price, as that is what must be paid out to holders of shares if the company does not successfully reach a deal. Warrants A warrant is like an option but traded like a stock. Warrants provide the owner the right (but not the obligation) to purchase one share of the underlying company at a predetermined price per warrant – typically at $11.50. Almost all SPAC Warrants have a five-year term after any merger has been consummated. However, SPAC warrants, expire worthless if the SPAC can't close a business combination, are thus a binary bet on a five-year warrant on a hypothetical future company. Warrants become exercisable only if the SPAC completes a business combination transaction before the specified outside date. The speculative nature of this Warrants tends to lead to wild price swings. SPAC Tickers SPAC Shares typically trade with a four-character ticker – eg. MNCL The SPAC Units are identified as the Share ticker plus “U” at the end – eg MNCLU Finally, the Warrants are the Share ticker plus “W” at the end – eg MNCLW.
Everything You Always Wanted To Know About Swaps* (*But Were Afraid To Ask)
Hello, dummies It's your old pal, Fuzzy. As I'm sure you've all noticed, a lot of the stuff that gets posted here is - to put it delicately - fucking ridiculous. More backwards-ass shit gets posted to wallstreetbets than you'd see on a Westboro Baptist community message board. I mean, I had a look at the daily thread yesterday and..... yeesh. I know, I know. We all make like the divine Laura Dern circa 1992 on the daily and stick our hands deep into this steaming heap of shit to find the nuggets of valuable and/or hilarious information within (thanks for reading, BTW). I agree. I love it just the way it is too. That's what makes WSB great. What I'm getting at is that a lot of the stuff that gets posted here - notwithstanding it being funny or interesting - is just... wrong. Like, fucking your cousin wrong. And to be clear, I mean the fucking your *first* cousin kinda wrong, before my Southerners in the back get all het up (simmer down, Billy Ray - I know Mabel's twice removed on your grand-sister's side). Truly, I try to let it slide. Idomybit to try and put you on the right path. Most of the time, I sleep easy no matter how badly I've seen someone explain what a bank liquidity crisis is. But out of all of those tens of thousands of misguided, autistic attempts at understanding the world of high finance, one thing gets so consistently - so *emphatically* - fucked up and misunderstood by you retards that last night I felt obligated at the end of a long work day to pull together this edition of Finance with Fuzzy just for you. It's so serious I'm not even going to make a u/pokimane gag. Have you guessed what it is yet? Here's a clue. It's in the title of the post. That's right, friends. Today in the neighborhood we're going to talk all about hedging in financial markets - spots, swaps, collars, forwards, CDS, synthetic CDOs, all that fun shit. Don't worry; I'm going to explain what all the scary words mean and how they impact your OTM RH positions along the way. We're going to break it down like this. (1) "What's a hedge, Fuzzy?" (2) Common Hedging Strategies and (3) All About ISDAs and Credit Default Swaps. Before we begin. For the nerds and JV traders in the back (and anyone else who needs to hear this up front) - I am simplifying these descriptions for the purposes of this post. I am also obviously not going to try and cover every exotic form of hedge under the sun or give a detailed summation of what caused the financial crisis. If you are interested in something specific ask a question, but don't try and impress me with your Investopedia skills or technical points I didn't cover; I will just be forced to flex my years of IRL experience on you in the comments and you'll look like a big dummy. TL;DR? Fuck you. There is no TL;DR. You've come this far already. What's a few more paragraphs? Put down the Cheetos and try to concentrate for the next 5-7 minutes. You'll learn something, and I promise I'll be gentle. Ready? Let's get started. 1.The Tao of Risk: Hedging as a Way of Life The simplest way to characterize what a hedge 'is' is to imagine every action having a binary outcome. One is bad, one is good. Red lines, green lines; uppie, downie. With me so far? Good. A 'hedge' is simply the employment of a strategy to mitigate the effect of your action having the wrong binary outcome. You wanted X, but you got Z! Frowny face. A hedge strategy introduces a third outcome. If you hedged against the possibility of Z happening, then you can wind up with Y instead. Not as good as X, but not as bad as Z. The technical definition I like to give my idiot juniors is as follows: Utilization of a defensive strategy to mitigate risk, at a fraction of the cost to capital of the risk itself. Congratulations. You just finished Hedging 101. "But Fuzzy, that's easy! I just sold a naked call against my 95% OTM put! I'm adequately hedged!". Spoiler alert: you're not (although good work on executing a collar, which I describe below). What I'm talking about here is what would be referred to as a 'perfect hedge'; a binary outcome where downside is totally mitigated by a risk management strategy. That's not how it works IRL. Pay attention; this is the tricky part. You can't take a single position and conclude that you're adequately hedged because risks are fluid, not static. So you need to constantly adjust your position in order to maximize the value of the hedge and insure your position. You also need to consider exposure to more than one category of risk. There are micro (specific exposure) risks, and macro (trend exposure) risks, and both need to factor into the hedge calculus. That's why, in the real world, the value of hedging depends entirely on the design of the hedging strategy itself. Here, when we say "value" of the hedge, we're not talking about cash money - we're talking about the intrinsic value of the hedge relative to the the risk profile of your underlying exposure. To achieve this, people hedge dynamically. In wallstreetbets terms, this means that as the value of your position changes, you need to change your hedges too. The idea is to efficiently and continuously distribute and rebalance risk across different states and periods, taking value from states in which the marginal cost of the hedge is low and putting it back into states where marginal cost of the hedge is high, until the shadow value of your underlying exposure is equalized across your positions. The punchline, I guess, is that one static position is a hedge in the same way that the finger paintings you make for your wife's boyfriend are art - it's technically correct, but you're only playing yourself by believing it. Anyway. Obviously doing this as a small potatoes trader is hard but it's worth taking into account. Enough basic shit. So how does this work in markets? 2. A Hedging Taxonomy The best place to start here is a practical question. What does a business need to hedge against? Think about the specific risk that an individual business faces. These are legion, so I'm just going to list a few of the key ones that apply to most corporates. (1) You have commodity risk for the shit you buy or the shit you use. (2) You have currency risk for the money you borrow. (3) You have rate risk on the debt you carry. (4) You have offtake risk for the shit you sell. Complicated, right? To help address the many and varied ways that shit can go wrong in a sophisticated market, smart operators like yours truly have devised a whole bundle of different instruments which can help you manage the risk. I might write about some of the more complicated ones in a later post if people are interested (CDO/CLOs, strip/stack hedges and bond swaps with option toggles come to mind) but let's stick to the basics for now. (i) Swaps A swap is one of the most common forms of hedge instrument, and they're used by pretty much everyone that can afford them. The language is complicated but the concept isn't, so pay attention and you'll be fine. This is the most important part of this section so it'll be the longest one. Swaps are derivative contracts with two counterparties (before you ask, you can't trade 'em on an exchange - they're OTC instruments only). They're used to exchange one cash flow for another cash flow of equal expected value; doing this allows you to take speculative positions on certain financial prices or to alter the cash flows of existing assets or liabilities within a business. "Wait, Fuzz; slow down! What do you mean sets of cash flows?". Fear not, little autist. Ol' Fuzz has you covered. The cash flows I'm talking about are referred to in swap-land as 'legs'. One leg is fixed - a set payment that's the same every time it gets paid - and the other is variable - it fluctuates (typically indexed off the price of the underlying risk that you are speculating on / protecting against). You set it up at the start so that they're notionally equal and the two legs net off; so at open, the swap is a zero NPV instrument. Here's where the fun starts. If the price that you based the variable leg of the swap on changes, the value of the swap will shift; the party on the wrong side of the move ponies up via the variable payment. It's a zero sum game. I'll give you an example using the most vanilla swap around; an interest rate trade. Here's how it works. You borrow money from a bank, and they charge you a rate of interest. You lock the rate up front, because you're smart like that. But then - quelle surprise! - the rate gets better after you borrow. Now you're bagholding to the tune of, I don't know, 5 bps. Doesn't sound like much but on a billion dollar loan that's a lot of money (a classic example of the kind of 'small, deep hole' that's terrible for profits). Now, if you had a swap contract on the rate before you entered the trade, you're set; if the rate goes down, you get a payment under the swap. If it goes up, whatever payment you're making to the bank is netted off by the fact that you're borrowing at a sub-market rate. Win-win! Or, at least, Lose Less / Lose Less. That's the name of the game in hedging. There are many different kinds of swaps, some of which are pretty exotic; but they're all different variations on the same theme. If your business has exposure to something which fluctuates in price, you trade swaps to hedge against the fluctuation. The valuation of swaps is also super interesting but I guarantee you that 99% of you won't understand it so I'm not going to try and explain it here although I encourage you to google it if you're interested. Because they're OTC, none of them are filed publicly. Someeeeeetimes you see an ISDA (dsicussed below) but the confirms themselves (the individual swaps) are not filed. You can usually read about the hedging strategy in a 10-K, though. For what it's worth, most modern credit agreements ban speculative hedging. Top tip: This is occasionally something worth checking in credit agreements when you invest in businesses that are debt issuers - being able to do this increases the risk profile significantly and is particularly important in times of economic volatility (ctrl+f "non-speculative" in the credit agreement to be sure). (ii) Forwards A forward is a contract made today for the future delivery of an asset at a pre-agreed price. That's it. "But Fuzzy! That sounds just like a futures contract!". I know. Confusing, right? Just like a futures trade, forwards are generally used in commodity or forex land to protect against price fluctuations. The differences between forwards and futures are small but significant. I'm not going to go into super boring detail because I don't think many of you are commodities traders but it is still an important thing to understand even if you're just an RH jockey, so stick with me. Just like swaps, forwards are OTC contracts - they're not publicly traded. This is distinct from futures, which are traded on exchanges (see The Ballad Of Big Dick Vick for some more color on this). In a forward, no money changes hands until the maturity date of the contract when delivery and receipt are carried out; price and quantity are locked in from day 1. As you now know having read about BDV, futures are marked to market daily, and normally people close them out with synthetic settlement using an inverse position. They're also liquid, and that makes them easier to unwind or close out in case shit goes sideways. People use forwards when they absolutely have to get rid of the thing they made (or take delivery of the thing they need). If you're a miner, or a farmer, you use this shit to make sure that at the end of the production cycle, you can get rid of the shit you made (and you won't get fucked by someone taking cash settlement over delivery). If you're a buyer, you use them to guarantee that you'll get whatever the shit is that you'll need at a price agreed in advance. Because they're OTC, you can also exactly tailor them to the requirements of your particular circumstances. These contracts are incredibly byzantine (and there are even crazier synthetic forwards you can see in money markets for the true degenerate fund managers). In my experience, only Texan oilfield magnates, commodities traders, and the weirdo forex crowd fuck with them. I (i) do not own a 10 gallon hat or a novelty size belt buckle (ii) do not wake up in the middle of the night freaking out about the price of pork fat and (iii) love greenbacks too much to care about other countries' monopoly money, so I don't fuck with them. (iii) Collars No, not the kind your wife is encouraging you to wear try out to 'spice things up' in the bedroom during quarantine. Collars are actually the hedging strategy most applicable to WSB. Collars deal with options! Hooray! To execute a basic collar (also called a wrapper by tea-drinking Brits and people from the Antipodes), you buy an out of the money put while simultaneously writing a covered call on the same equity. The put protects your position against price drops and writing the call produces income that offsets the put premium. Doing this limits your tendies (you can only profit up to the strike price of the call) but also writes down your risk. If you screen large volume trades with a VOL/OI of more than 3 or 4x (and they're not bullshit biotech stocks), you can sometimes see these being constructed in real time as hedge funds protect themselves on their shorts. (3) All About ISDAs, CDS and Synthetic CDOs You may have heard about the mythical ISDA. Much like an indenture (discussed in my post on $F), it's a magic legal machine that lets you build swaps via trade confirms with a willing counterparty. They are very complicated legal documents and you need to be a true expert to fuck with them. Fortunately, I am, so I do. They're made of two parts; a Master (which is a form agreement that's always the same) and a Schedule (which amends the Master to include your specific terms). They are also the engine behind just about every major credit crunch of the last 10+ years. First - a brief explainer. An ISDA is a not in and of itself a hedge - it's an umbrella contract that governs the terms of your swaps, which you use to construct your hedge position. You can trade commodities, forex, rates, whatever, all under the same ISDA. Let me explain. Remember when we talked about swaps? Right. So. You can trade swaps on just about anything. In the late 90s and early 2000s, people had the smart idea of using other people's debt and or credit ratings as the variable leg of swap documentation. These are called credit default swaps. I was actually starting out at a bank during this time and, I gotta tell you, the only thing I can compare people's enthusiasm for this shit to was that moment in your early teens when you discover jerking off. Except, unlike your bathroom bound shame sessions to Mom's Sears catalogue, every single person you know felt that way too; and they're all doing it at once. It was a fiscal circlejerk of epic proportions, and the financial crisis was the inevitable bukkake finish. WSB autism is absolutely no comparison for the enthusiasm people had during this time for lighting each other's money on fire. Here's how it works. You pick a company. Any company. Maybe even your own! And then you write a swap. In the swap, you define "Credit Event" with respect to that company's debt as the variable leg . And you write in... whatever you want. A ratings downgrade, default under the docs, failure to meet a leverage ratio or FCCR for a certain testing period... whatever. Now, this started out as a hedge position, just like we discussed above. The purest of intentions, of course. But then people realized - if bad shit happens, you make money. And banks... don't like calling in loans or forcing bankruptcies. Can you smell what the moral hazard is cooking? Enter synthetic CDOs. CDOs are basically pools of asset backed securities that invest in debt (loans or bonds). They've been around for a minute but they got famous in the 2000s because a shitload of them containing subprime mortgage debt went belly up in 2008. This got a lot of publicity because a lot of sad looking rednecks got foreclosed on and were interviewed on CNBC. "OH!", the people cried. "Look at those big bad bankers buying up subprime loans! They caused this!". Wrong answer, America. The debt wasn't the problem. What a lot of people don't realize is that the real meat of the problem was not in regular way CDOs investing in bundles of shit mortgage debts in synthetic CDOs investing in CDS predicated on that debt. They're synthetic because they don't have a stake in the actual underlying debt; just the instruments riding on the coattails. The reason these are so popular (and remain so) is that smart structured attorneys and bankers like your faithful correspondent realized that an even more profitable and efficient way of building high yield products with limited downside was investing in instruments that profit from failure of debt and in instruments that rely on that debt and then hedging that exposure with other CDS instruments in paired trades, and on and on up the chain. The problem with doing this was that everyone wound up exposed to everybody else's books as a result, and when one went tits up, everybody did. Hence, recession, Basel III, etc. Thanks, Obama. Heavy investment in CDS can also have a warping effect on the price of debt (something else that happened during the pre-financial crisis years and is starting to happen again now). This happens in three different ways. (1) Investors who previously were long on the debt hedge their position by selling CDS protection on the underlying, putting downward pressure on the debt price. (2) Investors who previously shorted the debt switch to buying CDS protection because the relatively illiquid debt (partic. when its a bond) trades at a discount below par compared to the CDS. The resulting reduction in short selling puts upward pressure on the bond price. (3) The delta in price and actual value of the debt tempts some investors to become NBTs (neg basis traders) who long the debt and purchase CDS protection. If traders can't take leverage, nothing happens to the price of the debt. If basis traders can take leverage (which is nearly always the case because they're holding a hedged position), they can push up or depress the debt price, goosing swap premiums etc. Anyway. Enough technical details. I could keep going. This is a fascinating topic that is very poorly understood and explained, mainly because the people that caused it all still work on the street and use the same tactics today (it's also terribly taught at business schools because none of the teachers were actually around to see how this played out live). But it relates to the topic of today's lesson, so I thought I'd include it here. Work depending, I'll be back next week with a covenant breakdown. Most upvoted ticker gets the post. *EDIT 1\* In a total blowout, $PLAY won. So it's D&B time next week. Post will drop Monday at market open.
Our fourth release of the year, MAME 0.221, is now ready. There are lots of interesting changes this time. We’ll start with some of the additions. There’s another load of TV games from JAKKS Pacific, Senario, Tech2Go and others. We’ve added another Panorama Screen Game & Watch title: this one features the lovable comic strip canine Snoopy. On the arcade side, we’ve got Great Bishi Bashi Champ and Anime Champ (both from Konami), Goori Goori (Unico), the prototype Galun.Pa! (Capcom CPS), a censored German version of Gun.Smoke, a Japanese location test version of DoDonPachi Dai-Ou-Jou, and more bootlegs of Cadillacs and Dinosaurs, Final Fight, Galaxian, Pang! 3 and Warriors of Fate. In computer emulation, we’re proud to present another working UNIX workstation: the MIPS R3000 version of Sony’s NEWS family. NEWS was never widespread outside Japan, so it’s very exciting to see this running. F.Ulivi has added support for the Swedish/Finnish and German versions of the HP 86B, and added two service ROMs to the software list. ICEknight contributed a cassette software list for the Timex NTSC variants of the Sinclair home computers. There are some nice emulation improvements for the Luxor ABC family of computers, with the ABC 802 now considered working. Other additions include discrete audio emulation for Midway’s Gun Fight, voice output for Filetto, support for configurable Toshiba Pasopia PAC2 slot devices, more vgmplay features, and lots more Capcom CPS mappers implemented according to equations from dumped PALs. This release also cleans up and simplifies ROM loading. For the most part things should work as well as or better than they did before, but MAME will no longer find loose CHD files in top-level media directories. This is intentional – it’s unwieldy with the number of supported systems. As usual, you can get the source and 64-bit Windows binary packages from the download page. This will be the last month where we use this format for the release notes – with the increase in monthly development activity, it’s becoming impractical to keep up.
MAME Testers Bugs Fixed
07560: [Crash/Freeze] (cave.cpp) hotdogst: Using debugger memdump command causes MAME to crash. (O. Galibert)
07603: [Documentation] (snes.cpp) snes [asterix]: Release year does not match title screen. (ArcadeShadow)
07615: [Documentation] (cninja.cpp) mutantf, mutantf2, mutantf3, mutantf4, deathbrd: Release years are incorrect. (jkburks)
Crazy Bonus 2002 (Ver. 1, set 3) [Ioannis Bampoulas]
Frantic Fred (Release 2) [Brian Troha, The Dumping Union]
Mario Kart Arcade GP (Japan, MKA1 Ver.C, update) [xuserv]
NCR Class 3433 [rfka01]
Olivetti Prodest PC 1 [Carl, rfka01]
Roland MKS-100 Digital Sampler [DBWBP]
Roland S-550 Digital Sampler [DBWBP]
Saitek Kasparov Renaissance (set 2) [hap, Berger]
Samsung Deskmaster 286-12 [rfka01]
Schneider Rundfunkwerke AG Euro AT [rfka01]
SciSys Kasparov Leonardo (set 2) [hap, Berger]
Siemens PG 750 [rfka01]
Siemens PG-750 486 EISA [rfka01]
Striker Xtreme (1.00) [PinMAME]
Zenith Data Systems Z-248 [rfka01]
New working software list additions
The Latin Hangman (Revision 1004) (cleanly cracked), The Sea Voyagers (cleanly cracked), The Wreck of the BSM Pandora (cleanly cracked) [4am, Firehawke]
Minerals of North Dakota (Version 1.0) (cleanly cracked), North Dakota Cities With Population 500 and Above (Version 1.0) (cleanly cracked), North Dakota Cities with Population Under 500 (Version 1.0) (cleanly cracked), North Dakota Counties (Version 1.0) (cleanly cracked), North Dakota Explorers (Version 1.0) (cleanly cracked), North Dakota Indian Tribes (Version 1.0) (cleanly cracked), North Dakota Parks and Historical Sites (Version 1.0) (cleanly cracked), North Dakota Plants (Version 1.0) (cleanly cracked), North Dakota Pride (Version 1.0) (cleanly cracked), North Dakota Symbols (Version 1.0) (cleanly cracked), North Dakota U.S. Senators and Representatives (Version 1.0) (cleanly cracked), North Dakota Wildlife (Version 1.0) (cleanly cracked), Notable People of North Dakota (Version 1.0) (cleanly cracked) [Frank Cifaldi, 4am, Firehawke]
apple2_flop_orig: 816/Paint (Version 3.1), ABM, Alien Munchies, Aliens, The Bard's Tale III: The Thief of Fate, Crosscountry California, Hobgoblin's Revenge, John Madden Football, Kampfgruppe (Version 1.0), Lady Tut, The Latin Hangman (Revision 1004), Merlin's Castle, Meteoroids in Space, Microbe, Mines of Titan, Super Huey, Terrapin Logo Plus (Version 1.1), Tink!Tonk! Tonk in the Land of the Buddy-Bots, Typhoon of Steel (Version 1.0), Who Stole Cinderella's Slipper? (Version 2.0), Wild West Math Level 4, Will O The Wisp [4am, Firehawke]
c64_cass: Alice in Videoland, Boulder Dash 4, Collapse, Gemini Wing, Grandmaster Chess, The Greed Monster, Hacker II, Head Over Heels, James Pond 2: RoboCod, Kettle, Master Chess, Micro Rhythm, Midnight Resistance, Pulse Warrior, Realm, Summer Camp, Tetris [c64tapes.org, Zoë Blade]
cgenie_cass: BängBäng - 2 player gun fight, Colour-Assembler NE555 timer chip information and calculator [Jürgen Buchmüller]
dai_cass: De Acrobaten (NL) [Robbbert]
Baseball 4, Pinball [hap]
Football 4 [hap, Sean Riddle]
Space Invader 2 [hap, Kevin Horton]
fmtowns_cd: The 4th Unit 5 - D-Again (Demo), Air Warrior V2.1L10, Ed Bogas' Music Machine, Ehon Writer - Denshi Ehon - Aesop World Dai-1-shuu, Gadget - Invention, Travel, & Adventure, GEdit Towns, HomeStudio V1.2L10, Hyper Address (HMB-106), Kanji Land 3-nen, Kid Pix Jr., Kotoba Asobi - CDView HiP Catch, Lord of the Rings, Vol. I, Master CD - Install Model-you, My Fair Lady CAN III. Intermediate, New Horizon CD Learning System II - English Course 1 (FM Towns Marty version), Niko², Oto to E no Deru Eigo Jisho No. 1 - Start with Words, The Queen of Duellist (HME-166A), Sargon V - World Class Chess, Software Contest Nyuusen Sakuhinshuu 1 (HMC-139), Software Contest Nyuusen Sakuhinshuu 1 (HMC-139B), Software Contest Nyuusen Sakuhinshuu 3, Virtuacall 2 [redump.org, r09]
fmtowns_flop: Ai Shimai - Futari no Kajitsu, Doukyuusei 2 Special Disk, Music Pro-Towns (1990-05-23), S. A. 2, Shangrlia 2 Special Disk, Super Ultra Mucchin Puripuri Cyborg Maririn DX [r09]
hp86_rom: HPIB service ROM, Service ROM [F.Ulivi]
Indiana Jones and the Last Crusade - The Action Game (5.25"), SimLife [ArcadeShadow]
Conflict Europe, Conquest of Camelot - The Search for the Grail, Harpoon, Harpoon Battleset 2 - North Atlantic Convoys, The Software Toolworks Game Pack 3 [Flyers80, FakeShemp]
Leisure Suit Larry Goes Looking for Love (In Several Wrong Places) [Gypsy Dave, FakeShemp]
3-D FloorPlan Designer V2.0, Ad Lib Instrument Maker V1.51, Ad Lib Juke Box Registration Bonus Disk V1.51, Ad Lib Juke Box Registration Bonus Disk V1.62, Ad Lib Juke Box V1.5, Ad Lib Juke Box V1.6, Ad Lib Juke Box V1.64, Ad Lib Visual Composer V1.51, SYSGRATION Mouse Driver 7.03 (5.25"), SYSGRATION Mouse Driver 8.00 (3.5"), SYSGRATION Mouse Driver 8.00 (5.25") [Justin Kerk]
Rex Nebular and the Cosmic Gender-Bender, Space Quest I: Roger Wilco in the Sarien Encounter (VGA release) [ArcadeShadow]
Jurassic Park [Flyers80, FakeShemp]
Pepper's Adventures in Time [Gypsy Dave, FakeShemp]
itt3030: Master boot disk, System boot disk [Robbbert]
timex_cass: 4K Race Refueled+, ACZ General Ledger 2000, AERCO 2068 Printer Driver V12, AERCO CP68 Printer Driver, Androids, Aritmetica, Artworx, Assalto A Embaixada, Astro Blaster (bootleg?), Auto Analyzer, Basic 64 Demo - TC 2048, Basic 64 Demo - TC 2068, Blam, Blind Alley, Britain Invaded, Budgeter, Capitalization Master, Checkbook Manager, Chess, Circuit Board Scramble, ColorPRINT, ColorTILE, Copy, Cozinheiro, Crazy Bugs, Crossfire, Cyber Zone, Demo (Keyboard Tutorial, Turtle Graphics, Home Accounting), Demonstração TC 2048, Desktop Publisher, Disassembler, Dragmaster, Financial Record Keeper, Flight Simulation, Frogger, Fun Golf, Fórmula 1, Guardian, Guerra estelar, Gulpman, Herói, Home Improvement Planner, Horace & the Spiders, Horace Goes Skiing, Horácio e as Aranhas, Hot Z Disassembler v1.43, Hot Z Disassembler v1.84, Hot Z Disassembler v1.95, Hungry Horace, Interface RS232, Invasores Lunares, JRC Catalog 3, JazzoFire, Keyword v1, Keyword v5.0, Language Usage, Math Wizardry I, Math Wizardry II, Minesweeper, Motociclismo, Mscript, Mscript (rerelease), Multi-Draw 2068, Musicola, Omnicalc 2, Orçamento Doméstico, Penetrator, Perigos Na Selva, Personal Home Finance, Personal Portfolio Manager, Pro Pinball, Pro-File 2068, Programa de a presentaçao, Quadra-Chart, Relocatable AERCO Centronics Print Driver, Simple Roulette, Smart Terminal 1, Space Raiders, Speech Synthesizer, Spelling I, Spelling II, States & Capitals, Stock Market Simulation, Super Hot Z Disassembler v2.51, Tape Corrector, Tasword Two, TC 2048 Demonstraçao, TC2048 Hi-Res Colour Demo, TechDraw Jr., Timachine, Time Teacher I, Time-Gate, Timex TC2048 Hi-Colour Demo, Toolkit, The Trader Trilogy, Travel with Trashman, TS-2068 DEMO, Upload-2000, VU-3D, VU-Calc, VU-File, War in the East, Window Print 32, Window Print 64, Word Play I, Word Play II, Wordcross, The Worx, Zeal Disassembler, Zeus Assembler [World of Spectrum, Spectrum Computing, ICEknight]
vgmplay: The Berenstain Bears' Camping Adventure (GEN/MD), Loadstar (GEN/MD), Medal City (GEN/MD), MegaMind (GEN/MD), MegaRace (GEN/MD), Paddle Fighter (GEN/MD), Phantasy Star II Text Adventures (GEN/MD), Riddle Wired (GEN/MD), Robot Battler (GEN/MD), Slam City with Scottie Pippen (Sega CD) (GEN/MD), The Smurfs (GEN/MD), Space Harrier 32X (GEN/MD), Spirou (GEN/MD), Tintin in Tibet (GEN/MD), Waterworld (GEN/MD), X-Men - Mind Games (Beta) (32X) (GEN/MD), Yogi Bear's Cartoon Capers (GEN/MD), Zany Golf (GEN/MD) [Project2612, Tafoid]
vsmile_cart: Avventura nel Parco Alfabeto (Italy), Disney/Pixar Toy Story 2 - Operazione: Salvataggio di Woody! (Italy), Nickelodeon Spongebob - Un giorno da Spugna (Italy), Spider-Man & Friends - La Sfida del Dottor Ock (Italy), V.Smile Football Club (Italy) [tag2015]
pi_storyreader_cart: 101 Dalmatiner (Germany), Arielle - Die Meerjungfrau (Germany), Bambi (Germany), Cinderella (Germany), Pinocchio (Germany), Schneewittchen und die Sieben Zwerge (Germany), Die Schöne und das Biest (Germany), Susi und STROLCH (Germany) [TeamEurope]
picno: Nontan to Issho Anime Stamp [TeamEurope]
4-in-1 (Flashcard Fishing, Break a Brick, Balloon Juggling, Penguin Maze) (US) [Sean Riddle, David Haywood, anonymous]
Dodgeball (US) [Sean Riddle, David Haywood, Peter Wilhelmsen, anonymous]
vsmile_cart: Disney Cenerentola - I desideri magici di Cenerentola (Italy, rev. 1), Disney/Pixar Toy Story 3 (Italy), Disney/Pixar Wall-E (Italy) [tag2015]
vsmilem_cart: Disney La Maison de Mickey (France, Rev. 005), Marvel Spider-Man & ses amis - Missions Secrètes (France), Mon Youtou tout fou! (France) [DisizDream]
cpu/z180: Moved some internal registers out of the base class, and implemented software-selectable clock divider. [AJR]
cpu/mcs96: Added N8097BH and P8798 variants, and changed some variants to use 16-bit buses. [AJR]
cpu/upd78k updates: [AJR]
Fixed disassembly of DBNZ and MOV A,!addr16 instructions for µPD78K/III.
Fixed disassembly of SFR-mode read/modify/write instructions for µPD78K/I and µPD78K/II.
atarist.cpp: Fixed the 68K side of ACIA serial communications (keyboard microcontroller is not fully cooperating yet). [AJR]
acia6850: Fixed transmission of a spurious character following master reset. [AJR]
machine/upd7001.cpp: Added NEC µPD7001 analog-to-digital converter device. [AJR]
dgnalpha.cpp: Removed old hack to ignore first floppy drive controller interrupt (now prevents disk boot). [AJR]
mpu4dealem.cpp: Adjusted v4dealem CRT controller clock to make refresh rate more reasonable. [AJR]
cpu/h8500: Added Hitachi H8/500 disassembler and skeleton CPU device family. [AJR]
pasopia7.cpp: Use CRT controller to help draw screen [AJR]
pasopia.cpp: Added RS-232 serial interface. [AJR]
bus/pasopia: Added Toshiba Pasopia PAC2 slot, with RAM, Kanji ROM and expander options. [AJR]
pasopia.cpp, pasopia.cpp: Replaced fixed expansions with PAC2 slots.
PreviousNext The next morning Mox was in what she referred to as her office but was more of a fully functional light industrial workshop. She chose this building partly because of the great sound deadening and large rooms. She was enjoying a cup of tea and working on a tablet when she got a notification from her bank about a deposit. When she saw the number she had to double check and then check where it came from. It was from her department in the Ministry, same account as her normal pay. She checked the memo, on the job injury compensation. She tried to flutter her flush to 'laugh' but nothing. A a year ago this would have had her so amused she would have already messaged Jorin to share the joke. She was definitely showing him when he woke up so he could have something to put him in a good mood. She had peeked in on him and as rough as the bedding looked she guessed his night had been pretty bad. She had decided to let him sleep and just order some clothes so he didn't have to bother going home before his lunch meeting. It was the least she could do for the brave act he was putting on for her, she did appreciate not seeing him fall to pieces the way he was when she came out of the coma. This gave her an idea for how to get around the spooks and get to the Last Cup. No one would be surprised about the poor little rich girl going on a poor little rich girl spending spree after having a chunk of change like this dropped in her account. Realestate is where her family had made their money long before post scarcity and she did own a few properties already. Shortly she was looking at listings in Old Town on a great site that had this really nice local business profile section. Damn it, how lucky would it have been for the Last Cup to be on the market. She had pictured it being in some less than ideal neighborhood but it was actually a fairly upscale area. Yes, yes this would do, office space for sale in the building right across the street. Meats and sud for lunch! Buy now or set up viewing, well she couldn't dishonor the Korig name buying sight unseen. She set up viewings for a few properties in different parts of the city, "just looking today thanks' perfect. She signed a year lease on a coach that would be here in plenty of time, closed up the finished work on the tablet and went to make some breakfast with a lot more zip in her step. *** Both her and Jorin had gotten dressed for their days business a bit early so were enjoying the mid morning air on the balcony. He had only slightly protested her choice of his new clothes with a remark about it definitely being something a retired academic would wear. She thought he looked nice but not over done and was just trying to get a flush out of her. Normally it would have, but she had an internal conflict going, she didn't want to be dead inside and was using sheer will power to offset make them pay. Then the Universe decided it was bored. Jorin had been watching the news on his tablet while she watched ships coming and going from the spaceport. The unobstructed view of the ships was another perk of this apartment. Jorin set the tablet down as he jumped up. "Mox you've got to see this." he said as he rushed inside and waved on the main holoscreen. they both just stood there in shock. The Stolm home system had experienced an extinction level event with a large asteroid striking their star. The reporter was interviewing some expert about the history of the system. The Stolm home world, Prax, had been plunged into an ice age a few centuries ago by a mega volcano and the survivors had moved to the mirror swarm around the main star, Praxnia Majora, that was already under construction at the time. Jorin flipped the channels looking for something on the current situation and they watched an asteroid the size of a decent moon smash through the mirror swarm and hit Praxnia Majora so hard that the flare wiped out the entire mirror swarm and almost all of the cylinder stations around it. The estimated death toll was staggering, experts were claiming that on a normal day that they just watched the deaths of 22 billion Stolm, roughly 70% of their population. The reporters were discussing the time it was going to take for them to send aid and the possibility this death toll could rise in that time, even with a hyperspace link it had taken 22 days for the first reports to reach the capital and the nearest navy vessels that could offer any real aid were more than 60 days out. "Mox this makes no sense, something is off about this." Mox wished she could laugh like a human. She sat down and waved up the keyboard and went to work. She linked into the main workstation in her office, rewound the broadcast to the footage of the impact and had the computer start estimating the speed of the asteroid and overlaying the data. She then started hunting through the galactic catalog for something matching that rock, when that came up empty she substituted something close. "Jorin, hey, will you make me a cup of tea please." she needed to get him doing something other than standing over her with his mouth hanging open staring at the holoscreen. It took awhile for the computer to run the numbers, she had limited it to the local machine because she didn't want anyone seeing her crunch the numbers on this with network resources. "That can't be right can it?" Jorin said shrinking back in his chair."94% light speed at impact, is that even possible?" First time since that day Mox had flushed and she was having to do everything in her power not to because all she felt was pure joy. "Not naturally no, you reap what you sow." Jorin looked at her for a moment, she wasn't sure if he had seen the bit of flush she couldn't help and then asked. "How? What do you mean?" "Someone strapped FTL drives on that rock and dropped it to sublight outside of the system." She pulled up some data from the processing stream at the bottom. "It's a binary system and the footage is from an observatory in orbit around Praxnia Minor. We could see it long enough to judge decel, yeah it had been FTL 110 million miles out. If we could get footage from that point I'm guessing the engines were dropped after entering real space and were diverted off into the void or jumped back into FTL." "So many innocent lives... who would... who could even do this?" "Jorin, we could do this, we don't because of the conventions on ethical war. Weaponizing FTL is a war crime." She didn't want to tell him. "The Stolm have a lot of enemies, you know that, well someone had enough of them by the looks of this." She decided she wasn't going to tell him, she had kept this between her, Krelin and the just as dead AI in the pod. If Krelin had told someone in Navy intel well so be it but she wasn't. Make them pay indeed. He jumped up remembering his lunch plans. "I'm late, I have to go Mox, do you want me to come by later." She had told him about her good fortune and planned spending spree and he had been pleased she was looking to do something, anything, to go on with life. "Yes that would be nice, I'll message you when I get home. Dinner is on me tonight." Even if she couldn't tell him why she definitely wanted someone to celebrate with. *** Mox had went and looked at the properties the day before and had lunch at the Last Cup, it was a nice place, definitely the kind of place you expect criminals to hang out but the type of criminals that wore suits and ties and had corner offices. She had gotten lucky and found a parking garage off of the service alley behind the building so using the rear entrance next to the kitchen wasn't even odd. Krelin was a details guy indeed, this was going to be far easier than expected. The garage was to the right so she saw the door she was looking for but didn't walk past it so only dared a glance at the locks. Standard biolocks, all she would have to do is grab the handle and open it. Well if it hadn't been reset, had Krelin planned for it to take this long? She pushed that terror inducing thought down, she didn't need to risk a public records search to guess this was not a rental. She purchased the office space and had hammered out a deal with the broker to act as her leasing and management agent. She called the coach to come around to pick her up made a big display of checking her schedule on her tablet. When it pulled up she put her bag inside and looked across at the shops on the other side of the street. She waived her tablet across the meter to pay for the curbside parking and walked across to a clothing boutique and spent some time looking through the designer dresses. She bought a few things and walked back to the coach placed them inside, checked the time, yes, she had time for lunch. She walked over to the Last Cup sat in the front window booth and put her coat on the seat across from her where it was visible from outside and ordered. She waited a few moments looking at the other patrons, the guy who followed her in was seated at the bar and couldn't see down the hall past the restrooms to the kitchen. She knew there would be a camera, there are cameras everywhere but she was sure this was off the books which is why they were doing it eyes on. She waved the server over and asked if she would watch over her stuff while she used the restroom. He looked over and Mox was careful to not make eye contact, he saw her stuff in the booth as she walked toward the restroom and stayed in his seat. She made the turn opposite the restrooms and went out past the pick up counter at the kitchen entrance telling the cashier she would be right back she needed to fetch something from her coach. Quick left turn, grab the door handle it opened and she was in. She hurried up the stairs and into the apartment and saw the one bedroom and hurried to it almost at a run. She pulled out the small knife she had brought and flipped the mattress over onto the floor and cut open the spot a repair had been made. The data card was there, she slipped it in a hidden pocket in her boot, put the knife away as she was heading for the door and was back down and walking back into the restaurant in less than 3 minutes. She walked back out into the dining area adjusting her belt, he was still at the bar. She sat back down and enjoyed her meal, and left in plenty of time to make her next appointment. She was also buying a small tenement building near the spaceport. *** She had left the tablet at home to remove temptation to access the card in the coach which she was sure was bugged. She had told Jorin she needed to get over being alone at night so she would have all the time she needed with whatever was on the card. She put it in the tablet and waited for it to mount and typed in Monster. Cooperate. Check! Get out. Check! Last Cup. Check! #3. Check! In the mattress. Check! Tablet with no connectivity. Check! Monster. Check! Make them pay... oh yes, yes we are going to make them pay. The card obviously wasn't all of the data from the AI, it would have taken thousands of these cards. It was everything she needed. A decent amount evidence from the pod, with archive footage of Hannah, she couldn't watch that. A network spyder with thousands of network addresses all over the galaxy for news and conspiracy sites. A message from everyone's favorite fallen hero Major Agnar Krelin. Thousands of files of evidence naming names, a few who had been on the holo praising Krelin's heroism, the coup hadn't failed. All she had to do was enter the password to activate the spyder and plug this card into any mainlink terminal anywhere and walk away. Oh we are going to make them pay. The last folder contained a partition menu, the trash for the spooks that would trigger the nuclear option for everything else, the main data and one named I am sorry. She accessed it, a compressed file titled For Mox. She transferred it to the tablet, closed and unmounted the card. Did she really want to talk to the dead? She stared at the file for a long time before unpacking it. The first folder contained bank accounts, spyders that would change her identity, yeah she might have to run now that she knew the coup hadn't failed. The next folder had some pulsar coordinates for off planet locations, safe houses? Ship and captain names and schedules. Yeah he had looked out for her. Next folder was a video message from Krelin, she turned that off before he got past I'm sorry, she was comfortable with her level of hate for the man at the moment. The next folder was a gut punch, it was chat messages between Krelin and... Hannah? How, when? What the frack was this? Seriously what the frack was this? The glitch with her tablet. Well frack managing that hate level. Nope, this she couldn't handle. I can't do this, I can't. One folder left, frack you Krelin. She opened it and there was some text, 'I know these mean more to you than any of this' and an audio play list of all of Hannah's songs. She pushed play and got up to pace the room as she heard her own voice talking to Hannah a million years ago and as soon as she heard that voice the whole universe collapsed into a singularity in the middle of her being and she fell to the floor. He had completely destroyed her again and she lay there a broken husk until long after the music stopped.
Conflicted - Where to Place Mega Shipyard and Interstellar Assembly [Help Me Choose]
I'm playing the UNE. I want to eventually build a Mega Shipyard [actually my 2nd, as I had a ruined one that I repaired] and an Interstellar Assembly. (Yes, I don't really need a 2nd one, but its a vanity project in a sense.) In principle, I would love to place both of them at Earth, but that's not possible [as there is a one non-Gateway , non-Habitat Megastructure per system, except with ruined megastructure systems which allows the regular one plus the replied one]. Earth is the capital of my empire and also hosts the galactic market, and we're also on the galactic council with the most votes. The ruined megashipyard is 4 jumps away from Earth, to the galactic southeast, in a nebula. I have an alternate site candidate for the location of whatever I don't build at Earth, at a sector capital in the next sector over from Earth. One such capital in particular, in the Voldox system, has a size 23 Gaia world [formerly the Phased Planet anomaly] and an ocean world with the sentinels, and happens to be one of the innermost systems in the galaxy as allowed for in the standard 4-arm spiral map type, right on the inner side of the innermost part of an arm]. I'm conflicted on a combination of RP and convenience considerations. As I'd said, I'd love to have both at Earth but can't. Given Earth's prominent role on the council and with the galactic market, having the Interstellar Assembly there makes since. But as we have a big fleet and having a key shipyard in our capital system would be convenient, highly defensible, and also be an appropriately central location, having the 2nd Mega Shipyard there also feels tempting. Help me break my deadlock with your advice! EDIT: It just occurs to me that I've entirely overlooked Deneb as an alternate option for the sites. I've conquered it almost 60 years ago. But RP-wise I wonder whether it would be "prudent" from an in-universe perspective to place such a major shipbuilding installation (if I did Megashipyard) at the old Commonwealth capital. Whereas Voldox has always been UNE territory and has been under out control for much long. Voldox is near the galactic center while Deneb is in the middle of an outer arm, near the edge of the galaxy. But it creates a 3rd option there. Voldox [with the powerful sentinel army] near the center, or Deneb [lots of habitats + Unity] near the outer edge. EDIT: Of course, you could suggest other sites if you wanted [some have proposed Alpha Cent in this topic, for instance]. NEW EDIT: Ah, I just looked at a map of my game I took in a screenshot, and realized that I had totally forgotten about the fact that Voldox is a binary system and thus can't have a binary system. Oops! My apologies. UPDATE: After realizing the Voldox was not actually eligible after all, I ended up taking the advice to put the Interstellar Assembly in Sol [around Jupiter, as you can't actually put it around a habitable world like Earth itself] and the Mega Shipyard in Deneb. For extra symbolism, I ordered the construction of both structures to begin on the same date, to represent the unity [pun intended] established between Sol/Earth and Deneb/Unity. Jupiter in particular was chosen to be the site of the assembly as its named after the king of the gods from the Roman pantheon from ancient mythology and its the largest planet in the system and thus looks particularly impressive.
(Note: if you were following my earlier posts, I wrote a note at the end of this post explaining why I deleted old posts and what changed) Edit: Can't reply to comments since my account is still flagged as new :\. Thank you everyone for your comments. Edit: Made another post answering questions here.
Test data is untouched during training 10:1:1 train:val:test.
Yes, I consider it "deep" learning from what I learned at my institution. I use LSTMs at one point in my pipeline, feel free to consider that deep or not.
I'll be making daily posts so that people can follow along.
Someone mentioned RL, yes I plan on trying that in the future :). This would require a really clever way to encode the current state parameters. Haven't thought about it too much yet.
Someone mentioned how companies beat earnings 61% anyway, so my model must be useless right? Well if you look at the confusion matrix you can see I balanced classes before training (with some noise). This means that the data had roughly 50/50 beat/miss and had a 58% test accuracy.
TLDR: Not financial advice.
I created a deep learning algorithm trained on 2015-2019 data to predict whether a company will beat earning estimates.
Algorithm has an accuracy of 58%.
I need data and suggestions.
I’ll be making daily posts for upcoming earnings.
Greetings everyone, I’m Bunga, an engineering PhD student at well known university. Like many of you, I developed an interest in trading because of the coronavirus. I lost a lot of money by being greedy and uninformed about how to actually trade options. With all the free time I have with my research slowing down because of the virus, I’ve decided to use what I’m good at (being a nerd, data analytics, and machine learning) to help me make trades. One thing that stuck out to me was how people make bets on earnings reports. As a practitioner of machine learning, we LOVE binary events since the problem can be reduced to a simple binary classification problem. With that being said, I sought out to develop a machine learning algorithm to predict whether a company will beat earnings estimates. I strongly suggest TO NOT USE THIS AS FINANCIAL ADVICE. Please, I could just be a random guy on the internet making things up, and I could have bugs in my code. Just follow along for some fun and don’t make any trades based off of this information 😊 Things other people have tried: A few other projects have tried to do this to some extent [1,2,3], but some are not directly predicting the outcome of the earnings report or have a very small sample size of a few companies. The data This has been the most challenging part of the project. I’m using data for 4,000 common stocks. Open, high, low, close, volume stock data is often free and easy to come by. I use stock data during the quarter (Jan 1 – Mar 31 stock data for Q1 for example) in a time series classifier. I also incorporate “background” data from several ETFs to give the algorithm a feel for how the market is doing overall (hopefully this accounts for bull/bear markets when making predictions). I use sentiment analyses extracted from 10K/10Q documents from the previous quarter as described in . This gets passed to a multilayer perceptron neural network. Data that I’ve tried and doesn’t work to well: Scraping 10K/10Q manually for US GAAP fields like Assets, Cash, StockholdersEquity, etc. Either I’m not very good at processing the data or most of the tables are incomplete, this doesn’t work well. However, I recently came across this amazing API  which will ameliorate most of these problems, and I plan on incorporating this data sometime this week. Results After training on about 34,000 data points, the model achieves a 58% accuracy on the test data. Class 1 is beat earnings, Class 2 is miss earnings.. Scroll to the bottom for the predictions for today’s AMC estimates. https://preview.redd.it/fqapvx2z1tv41.png?width=875&format=png&auto=webp&s=05ea5cae25ee5689edea334f2814e1fa73aa195d Future Directions Things I’m going to try:
Financial twitter sentiment data (need data for this)
Data on options (ToS apparently has stuff that you can use)
Using data closer to the earnings report itself rather than just the data within the quarterly date
A note to the dozen people who were following me before Thank you so much for the early feedback and following. I had a bug in my code which was replicating datapoints, causing my accuracy to be way higher in reality. I’ve modified some things to make the network only output a single value, and I’ve done a lot of bug fixing. Predictions for 4/30/20 AMC: A value closer to 1 means that the company will be more likely to beat earnings estimates. Closer to 0 means the company will be more likely to miss earnings estimates. (People familiar with machine learning will note that neural networks don’t actually output a probability distribution so the values don’t actually represent a confidence).
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