This isn't over, not by a long shot... this is the calm before the storm frens

So a few of you retards got your first experience watching level 1 circuit breakers get hit, congrats... guess that makes me old...

I previously posted this DD: https://www.reddit.com/r/wallstreetbets/comments/ffdrz0/covid_dd/

It had some good stuff in it, and was well received, but sadly by the time anybody got around to making a trade, the sToNk market took the biggest beating since '08, and IV spiked so you can't even get in at an affordable price right now.

We all know (or you should fucking know) that in the trading game the rule is "buy the rumor, sell the news". I mean that's bloody obvious, this is why people insider trade FFS... So anyways, the game becomes "predict the future". Literally.

Anyways, as it stands our goal is to predict the headlines on CNN, MSNPC, FOX, BBC, etc. We know the reason for the crash on Monday was partially because of the quarantine in Italy and partially due to the oil war. I mean honestly, the oil war is not that big of a factor compared to the quarantine but you got a glimpse of the absolute state of panic that people go through when they realize "holy shit this is real". That's what bear gang thrives on, pure human emotion, and in particular the most powerful emotion there is -- fear.

So let's talk about what the headlines will be in 2 weeks from now. As it stands right now we're playing a game of denial and acceptance. I seen a chart on here, somebody link it below (was a top post I think like 2 weeks ago-ish) and it showed the 4 stages of the market under the beer virus. It was something to the effect of: Stage 1 small fears, media says it's all going to be okay stage 2 media starts talking about beer virus and something bad stage 3, media explodes people freak out, market crashes, stage 4 people accept and start to forget.

Anyways, so what will the headlines be in a few weeks? Well thank god we can do some maths... if you go to this website [1] it lists the beer virus by day. But in particular you can choose countries by day which.. is very helpful.

But first and foremost, Wuhan was quarantined around January 23rd [2] when approximately 830 were sick with the virus. The quarantine was extended to 50m people on January 28th [3] when ~5,974 were sick.

Italy pulled the quarantine measure on 15m people on the 8th when 7,375 were sick [4], this was extended to the entire country the next day [5] when 9,172 were sick.

So we can see that the panic starts to set in once a country manages to get shy of 10,000 infected. So what country is next? Now this is predicated on similar steps being taken... and it's a hard play for western countries to borderline shutdown their economies, but the precedent is set.

So how does this puppy evolve through time? Well, we can take a look at the natural log growth of it daily and we get this in Italy [6] (the only country with high numbers that I trust to give accurate data aside from second best Korea). So I decided well... how can you model exponential growth? Well there's a few models we can use... basic exponential growth N^((1+g)) or Ne^(rt) however those models don't fit so well to Italian infection rate growth [7]. However, the ert model fits a bit nicer... however what if r could evolve through time? Well that's easy to do with a CIR process [8]. All you need to do is match the historical growth rate of the disease and set a steady state. Now... the problem is picking a steady state which I'll expand on more later on. Anyways I minimized the variance of the Model to the actual data and got this [9].

It's really not complex. Basically the growth of the virus can be expressed as ~Ne^(rt) where r is the growth rate and t is the days and N is the cumulative number of sick persons. To really get autistic you could remove those who recover and all that but I'm lazy and my math fits somewhat nicely and the CIR kind of accounts for that so fuck off. Anyways we get this [10]. Which basically means we've got a model that can somewhat predict the future growth of this in other countries like France, Germany and the United States (you know, the places that actually affect the stock market).

Conclusion:

Again I know half you retards skipped to here...

TLDR: If you're from r/all buy calls on $WYNN March 13th $165 strike, cannot go tits up.

Here's what we're looking at for Italy over the next month for beer virus cases: [11]

France I back-tested the Italy growth and we got a pretty damn close fit [12]. So I extrapolated the Italian numbers and super-imposed it onto France then forecasted using the model and got this [13]. You'll notice the range is massive, this is because France is basically a week and a bit before Italy in its outbreak. the long-run growth of the virus depends on a lot of factors, if France acts quickly then it'll be a lower theta value and it'll slow the spread. Regardless if it spreads fast (0.2, 0.15 and 0.1 theta) we'll see the number surpass 10,000 by March 18th. Else March 19th 0.05 theta or March 20th 0 theta. I would expect quarantines to ensue around those times if they correlate whatsoever with the actions of Italy and China, but we'll see...

Spain and Germany should behave the same-ish with a few days of lag...

Lastly, the USA I start the model from the starting data from n=~70 like with France and Italy and build the model out, I get this interpolating the data over which matches pretty closely but I have to lagg it slightly (makes sense because other countries start to take precautions) [14].

The forecast for USA looks like this [15]. So I'd be willing to bet this thing stays more around the 0.2 theta spread but we'll see... quarantine measures will crank this down. Anyways, if this continues on track in the USA under current conditions with 0.2theta we'll surpass 10,000 cases by March 21st, if it has a lower theta drift of 0.15 then well see 10,000 cases by the 24th if 0.1 theta drift then ~march 28th/29th else with 0.05 we'll see ~April 5th for the 10,000th case.

In closing, I would bet on there being more quarantines of cities around the corner. Expect schools to shut down and don't forget puts on old folks homes/care taking facilities. Personally my bet. The markets will probably trade in circles until next week and then expect another big drop after the next country announces a quarantine of some major city. This is all predicated on whether or not the other G8 countries start following suit. If they do, bear gang wins.

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EDIT: A few of you wanted a tickers and strikes, here's my thoughts:

$WELL looks well factored in... IV is stupid so you know what that means... down 30.6% from 52wk high

$VTR is the same.... well factored in; down 41.7% from 52wk high

$OHI looks somewhat factored in... -22.5% from 52 week high but IV on the long dated ATM puts are like .49 so yeah fuck that...

In Canada I found these piles of shit which are not factored in IMO:

$CSH.UN [Canada] (Chartwell Retirement Residence); it's only down 15% from 52 week high and all it takes is ONE person in one of their residence to get sick with bat soup fever and once it hits the media the fucking stock will CRATER. Moreover, the order book is highly imbalanced way more sellers than buyers if you take out the one guy with a massive buy-limit @ $11 per share out of from CIBC world markets... I like the oct. 20 14p's... IV is like .355 historic vol is something like .136ish over last year so... you know what that means... but who cares when this thing gets hit, right? EDIT 2: This autistic genius also gave some good insight

$SIA [Canada] (Sienna Senior Living Inc.); down 21% from 52wk high. Same idea. historic vol ~ 0.189. Level 2 is also imbalanced. The IV for the oct. 20 16ps is like 46% at the ask so... really expensive... but again, if beer virus hits on of their places it's game.