Fiscal cliff trading strategy

[SBR_John]

Ironic they call it a "fiscal cliff" when in reality we are going over one anyway and this solution would only help. But its not going to happen. Both parties know it. It's just a political football.

What I think will happen is there will be some jawboning and positioning and both sides will announce the deadlock has broken around the 21st give or take a day. That gives us potentially 3 weeks of volatile markets.

Here is an idea:

Buy 100 SPY Dec 141 Calls .44 = 4,400
Buy 100 SPY Dec 139 Puts .35 = 3,500

The entire position costs 7,900 plus commission.

Sell the position for 16,000.

[Porterhouse]

It's my belief the country will go over the fiscal cliff as republicans refuse to use the raising of taxes to increase revenue. After America goes over the cliff they can then vote to lower taxes to a rate higher than what they are today.

[milwaukee mike]

i agree, if you include underfunded medicare/social security, the true debt is around $100 trillion. that's $1 million for every household in the us! no chance of ever having a surplus again, and if long-term interest rates even went to 4% the united states would be in default and essentially have to declare bankruptcy (not a good thing).

from the taxation side of things (since i'm a cpa), nobody is mentioning that even if the can gets kicked down the road again, social security payroll taxes are going up 2% for everyone so that's immediately $1000 less in your pocket each year if you make $50k. for people making over $250k the numbers are going to be staggering, in addition to the income tax increases, there will be a new medicare tax of 3.8% on rents/interest/dividends.

so many of the wealthier people in this country will probably see their federal income taxes double in the near future. not good for the economy, and still won't fix anything, just the increased spending from obamacare will more than offset any tax increases.

[Porterhouse]

Hey another accountant! Nice! I feel that the affordable care act is a good thing however and revenues should be more broad. Spending cuts however are very necessary.

[EmpireMaker]

Expect the Republicans not to compromise and act accordingly.....because they won't compromise

[EmpireMaker]

"but Republicans have complained that negotiations are at an impasse. One of the major roadblocks is the fight over whether to let tax rates on higher incomes revert to Clinton-era levels."

[Emily_Haines]

How about not spending 1 trillion a year on the military?

Why is that never the answer?

[nosniboR11]

How about not spending 1 trillion a year on the military?

Why is that never the answer?

jump off the nearest bridge , you fatas@

[Emily_Haines]

jump off the nearest bridge , you fatas@

Texan piece of shit

Can't wait until Obama takes your guns

[Monitor-Tan]

they will compromise, with the house seat up for grabs next, if this fails, and they have to explain, democrats will say the house did it on purpose since it's controlled by the republics.. They will compromise, it's all bs politics and drama queen newspapers.

[SBR_John]

"but Republicans have complained that negotiations are at an impasse. One of the major roadblocks is the fight over whether to let tax rates on higher incomes revert to Clinton-era levels."

If you think about it the Republicans were elected to keep taxes down and reign in government spending. They were not elected to be a part of Obama's fiscal destruction of the country. Obama says 'we won!', Republicans should say STFU and give us a budget that contains no tax increases and reduces the budget. Obama says shared sacrifice I say cool, allow ALL tax cuts to expire and enact ALL the sweeping spending cuts including military Emily, we will all share equally...yea, you won now go smoke a bowl and let the adults get some work done.

[No coincidences]

If you think about it the Republicans were elected to keep taxes down and reign in government spending.

Do you honestly believe this John? And if so, even theoretically, do you believe it from a realistic standpoint?

[nosniboR11]

Texan piece of shit

Can't wait until Obama takes your guns

that day will never happen, and if it does, I am a real man, will go down fighting with my guns

and trust me emily you would not last a day here in Texas, you would get your liberal gay ass kicked up and down the street.

[Rookie-Capper]

collapsing our economy has been planned for a long time. you must create a crisis so that america will be desperate for their solution- moving toward a one world government.

[Conan]

How about not spending 1 trillion a year on the military?

Why is that never the answer?

While i do agree there needs to be some cuts here as well our military budget while high in the dollar amount is relatively middle of the road as a % of our budget compared to other countries. The issue is not revenue the issue is spending the government is completely out of control with spending tax revenues adjusted for inflation and population is three times what it was 50 years ago. The government needs to rein itself in and not try to take care of everybody.

[Monitor-Tan]

To say Revenue is not our problem passed a few years ago. We now both have revenue and spending problem.. You can budget all you want but when your in a debt with the amount we are at now, all the cutting of our spending won't help.. We've dug ourself too deep to fool ourselves into thinking that just by cutting spending we will get out of this debt. Not happening. They need to cut drastically AND raise revenue, there's no way around it. Any political candidate that says they can get us out of debt without raising taxes or finding a way to raise some kind of revenue is a douche bag, and you should feel insulted that they think you would be stupid enough to believe that.. Yes at one point cutting spending would've helped, but not now we've dug too deep. It's like owing a million dollar on a CC when you'r eonly making a thousand a week.. You can budget all you want but you won't cut that down in your lifetime unless you generate more cash...

[d2bets]

They will come to an agreement during the week of the 17th and it will include an increase from the current top marginal tax rates. Beyond that I won't predict.

[BrickJames]

Buy gold and silver, NOT ETFs , hard assets. You will thank me later.

[Porterhouse]

Buy gold and silver, NOT ETFs , hard assets. You will thank me later.

Fade this strategy if you know what's good for you.

[SBR_John]

Do you honestly believe this John? And if so, even theoretically, do you believe it from a realistic standpoint?

I don't think its a matter of what I think but more so a statement of fact that they were elected on the promise of low taxes and reining in out of control spending. Is it realistic? Sadly, no. There will be a compromise that will raise taxes and add back most of the bi-partisian agreed spending cuts. And we will be another step closer to Greece.

[SBR_John]

Buy 100 SPY Dec 141 Calls .44 = 4,400
Buy 100 SPY Dec 139 Puts .35 = 3,500

Market moving sideways, prices as of noon;
100 SPY Dec 141 Calls .70 = 7,000
100 SPY Dec 139 Puts .17 = 1,700

Trade is up a little.

[ACoochy]

collapsing our economy has been planned for a long time. you must create a crisis so that america will be desperate for their solution- moving toward a one world government.

Man, wtf happened to ur once proud country for this to even be on the table??

[Cheme82]

Instead of worrying and bitching about stuff I have no control over I just work hard, study, and hit up my bookie for some cash most weeks. Works great for me and keeps my stress level low.

[ACoochy]

I don't think its a matter of what I think but more so a statement of fact that they were elected on the promise of low taxes and reining in out of control spending. Is it realistic? Sadly, no. There will be a compromise that will raise taxes and add back most of the bi-partisian agreed spending cuts. And we will be another step closer to Greece.

The ppl re-elected Obama on a mandate and yet precious repubs still believe they know best. Just let the guy do what he was a mandate to do and leave the Ego's outside of congress.

Y the fukk waste everybodys time with the election to begin with then??

Ah that's right, because even a deluded sense of hope is better than no hope at all.

[The Kraken]

Buy F and dump around 15 or so. The PPT won't let this great American company not get to 15

[Chi_archie]

Buy F and dump around 15 or so. The PPT won't let this great American company not get to 15 Easy 5-10k

[The Kraken]

Bwhahahahaha....

Archie I feel like we're always thinking the same thing

[Sam Odom]

Fiscal Cliff

[The Kraken]

There's no fukking cliff. We've been inching towards rock bottom for some time now.

[Sam Odom]

Not 'inching'

Been giant leaps in the past 12yrs

[The Kraken]

Inching, giant leaps, it's all semantics Sammy

One things for sure, there's nothing in our imminent future that's going to push us over the edge for good. Fearmongerers would have some believe this but as John stated, they'll just punt this issue and let someone else deal with it later down the road.

Some in the higher tax brackets will feel the squeeze sooner than later, thats for sure.

[SBR_John]

The ppl re-elected Obama on a mandate and yet precious repubs still believe they know best. Just let the guy do what he was a mandate to do and leave the Ego's outside of congress.

Y the fukk waste everybodys time with the election to begin with then??

Ah that's right, because even a deluded sense of hope is better than no hope at all.

What about the Republicans that were elected?

Obama can mandate all he wants but he's not a dictator. He is not a king. He was elected President and the The United States House of Representatives was just as duly elected. Their mandate is lower taxes and deficit reduction. When he controls all three branches or is anointed King he can do what he pleases, until then he has no choice but to negotiate.

[milwaukee mike]

john mentions "duly elected" as if this congress and every other government in the free world wasn't entirely owned by the banks...

if we have leaders that actually represented our interests then why would all of these countries that have been around for hundreds, or even thousands of years, have crippling debts? go back in time before the federal reserve act and the united states was the healthiest, strongest country in the world without federal taxes. and we were building more roads, bridges, railroads, etc.

[No coincidences]

john mentions "duly elected" as if this congress and every other government in the free world wasn't entirely owned by the banks...

if we have leaders that actually represented our interests then why would all of these countries that have been around for hundreds, or even thousands of years, have crippling debts? go back in time before the federal reserve act and the united states was the healthiest, strongest country in the world without federal taxes. and we were building more roads, bridges, railroads, etc.

Thank you, MM.

Thank you.

The idea that this is an Obama problem or a Democrat problem is laughable. This is a "big business in bed with our government" problem. No red or blue is fixing that anytime soon. No sense in pointing fingers at this point. You're just distracting the real issue here and doing exactly what your adopted party is hoping you'll do.

[Emily_Haines]

that day will never happen, and if it does, I am a real man, will go down fighting with my guns

and trust me emily you would not last a day here in Texas, you would get your liberal gay ass kicked up and down the street.

Would never even think of stepping a foot inside that shit hole.