Delta Explained The Options & Futures Guide

No gods, no kings, only NOPE - or divining the future with options flows. [Part 2: A Random Walk and Price Decoherence]

tl;dr -
1) Stock prices move continuously because different market participants end up having different ideas of the future value of a stock.
2) This difference in valuations is part of the reason we have volatility.
3) IV crush happens as a consequence of future possibilities being extinguished at a binary catalyst like earnings very rapidly, as opposed to the normal slow way.
I promise I'm getting to the good parts, but I'm also writing these as a guidebook which I can use later so people never have to talk to me again.
In this part I'm going to start veering a bit into the speculation territory (e.g. ideas I believe or have investigated, but aren't necessary well known) but I'm going to make sure those sections are properly marked as speculative (and you can feel free to ignore/dismiss them). Marked as [Lily's Speculation].
As some commenters have pointed out in prior posts, I do not have formal training in mathematical finance/finance (my background is computer science, discrete math, and biology), so often times I may use terms that I've invented which have analogous/existing terms (e.g. the law of surprise is actually the first law of asset pricing applied to derivatives under risk neutral measure, but I didn't know that until I read the papers later). If I mention something wrong, please do feel free to either PM me (not chat) or post a comment, and we can discuss/I can correct it! As always, buyer beware.
This is the first section also where you do need to be familiar with the topics I've previously discussed, which I'll add links to shortly (my previous posts:
1) https://www.reddit.com/thecorporation/comments/jck2q6/no_gods_no_kings_only_nope_or_divining_the_future/
2) https://www.reddit.com/thecorporation/comments/jbzzq4/why_options_trading_sucks_or_the_law_of_surprise/
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A Random Walk Down Bankruptcy
A lot of us have probably seen the term random walk, maybe in the context of A Random Walk Down Wall Street, which seems like a great book I'll add to my list of things to read once I figure out how to control my ADD. It seems obvious, then, what a random walk means - when something is moving, it basically means that the next move is random. So if my stock price is $1 and I can move in $0.01 increments, if the stock price is truly randomly walking, there should be roughly a 50% chance it moves up in the next second (to $1.01) or down (to $0.99).
If you've traded for more than a hot minute, this concept should seem obvious, because especially on the intraday, it usually isn't clear why price moves the way it does (despite what chartists want to believe, and I'm sure a ton of people in the comments will tell me why fettucini lines and Batman doji tell them things). For a simple example, we can look at SPY's chart from Friday, Oct 16, 2020:

https://preview.redd.it/jgg3kup9dpt51.png?width=1368&format=png&auto=webp&s=bf8e08402ccef20832c96203126b60c23277ccc2
I'm sure again 7 different people can tell me 7 different things about why the chart shape looks the way it does, or how if I delve deeply enough into it I can find out which man I'm going to marry in 2024, but to a rationalist it isn't exactly apparent at why SPY's price declined from 349 to ~348.5 at around 12:30 PM, or why it picked up until about 3 PM and then went into precipitous decline (although I do have theories why it declined EOD, but that's for another post).
An extremely clever or bored reader from my previous posts could say, "Is this the price formation you mentioned in the law of surprise post?" and the answer is yes. If we relate it back to the individual buyer or seller, we can explain the concept of a stock price's random walk as such:
Most market participants have an idea of an asset's true value (an idealized concept of what an asset is actually worth), which they can derive using models or possibly enough brain damage. However, an asset's value at any given time is not worth one value (usually*), but a spectrum of possible values, usually representing what the asset should be worth in the future. A naive way we can represent this without delving into to much math (because let's face it, most of us fucking hate math) is:
Current value of an asset = sum over all (future possible value multiplied by the likelihood of that value)
In actuality, most models aren't that simple, but it does generalize to a ton of more complicated models which you need more than 7th grade math to understand (Black-Scholes, DCF, blah blah blah).
While in many cases the first term - future possible value - is well defined (Tesla is worth exactly $420.69 billion in 2021, and maybe we all can agree on that by looking at car sales and Musk tweets), where it gets more interesting is the second term - the likelihood of that value occurring. [In actuality, the price of a stock for instance is way more complicated, because a stock can be sold at any point in the future (versus in my example, just the value in 2021), and needs to account for all values of Tesla at any given point in the future.]
How do we estimate the second term - the likelihood of that value occurring? For this class, it actually doesn't matter, because the key concept is this idea: even with all market participants having the same information, we do anticipate that every participant will have a slightly different view of future likelihoods. Why is that? There's many reasons. Some participants may undervalue risk (aka WSB FD/yolos) and therefore weight probabilities of gaining lots of money much more heavily than going bankrupt. Some participants may have alternative data which improves their understanding of what the future values should be, therefore letting them see opportunity. Some participants might overvalue liquidity, and just want to GTFO and thereby accept a haircut on their asset's value to quickly unload it (especially in markets with low liquidity). Some participants may just be yoloing and not even know what Fastly does before putting their account all in weekly puts (god bless you).
In the end, it doesn't matter either the why, but the what: because of these diverging interpretations, over time, we can expect the price of an asset to drift from the current value even with no new information added. In most cases, the calculations that market participants use (which I will, as a Lily-ism, call the future expected payoff function, or FEPF) ends up being quite similar in aggregate, and this is why asset prices likely tend to move slightly up and down for no reason (or rather, this is one interpretation of why).
At this point, I expect the 20% of you who know what I'm talking about or have a finance background to say, "Oh but blah blah efficient market hypothesis contradicts random walk blah blah blah" and you're correct, but it also legitimately doesn't matter here. In the long run, stock prices are clearly not a random walk, because a stock's value is obviously tied to the company's fundamentals (knock on wood I don't regret saying this in the 2020s). However, intraday, in the absence of new, public information, it becomes a close enough approximation.
Also, some of you might wonder what happens when the future expected payoff function (FEPF) I mentioned before ends up wildly diverging for a stock between participants. This could happen because all of us try to short Nikola because it's quite obviously a joke (so our FEPF for Nikola could, let's say, be 0), while the 20 or so remaining bagholders at NikolaCorporation decide that their FEPF of Nikola is $10,000,000 a share). One of the interesting things which intuitively makes sense, is for nearly all stocks, the amount of divergence among market participants in their FEPF increases substantially as you get farther into the future.
This intuitively makes sense, even if you've already quit trying to understand what I'm saying. It's quite easy to say, if at 12:51 PM SPY is worth 350.21 that likely at 12:52 PM SPY will be worth 350.10 or 350.30 in all likelihood. Obviously there are cases this doesn't hold, but more likely than not, prices tend to follow each other, and don't gap up/down hard intraday. However, what if I asked you - given SPY is worth 350.21 at 12:51 PM today, what will it be worth in 2022?
Many people will then try to half ass some DD about interest rates and Trump fleeing to Ecuador to value SPY at 150, while others will assume bull markets will continue indefinitely and SPY will obviously be 7000 by then. The truth is -- no one actually knows, because if you did, you wouldn't be reading a reddit post on this at 2 AM in your jammies.
In fact, if you could somehow figure out the FEPF of all market participants at any given time, assuming no new information occurs, you should be able to roughly predict the true value of an asset infinitely far into the future (hint: this doesn't exactly hold, but again don't @ me).
Now if you do have a finance background, I expect gears will have clicked for some of you, and you may see strong analogies between the FEPF divergence I mentioned, and a concept we're all at least partially familiar with - volatility.
Volatility and Price Decoherence ("IV Crush")
Volatility, just like the Greeks, isn't exactly a real thing. Most of us have some familiarity with implied volatility on options, mostly when we get IV crushed the first time and realize we just lost $3000 on Tesla calls.
If we assume that the current price should represent the weighted likelihoods of all future prices (the random walk), volatility implies the following two things:
  1. Volatility reflects the uncertainty of the current price
  2. Volatility reflects the uncertainty of the future price for every point in the future where the asset has value (up to expiry for options)
[Ignore this section if you aren't pedantic] There's obviously more complex mathematics, because I'm sure some of you will argue in the comments that IV doesn't go up monotonically as option expiry date goes longer and longer into the future, and you're correct (this is because asset pricing reflects drift rate and other factors, as well as certain assets like the VIX end up having cost of carry).
Volatility in options is interesting as well, because in actuality, it isn't something that can be exactly computed -- it arises as a plug between the idealized value of an option (the modeled price) and the real, market value of an option (the spot price). Additionally, because the makeup of market participants in an asset's market changes over time, and new information also comes in (thereby increasing likelihood of some possibilities and reducing it for others), volatility does not remain constant over time, either.
Conceptually, volatility also is pretty easy to understand. But what about our friend, IV crush? I'm sure some of you have bought options to play events, the most common one being earnings reports, which happen quarterly for every company due to regulations. For the more savvy, you might know of expected move, which is a calculation that uses the volatility (and therefore price) increase of at-the-money options about a month out to calculate how much the options market forecasts the underlying stock price to move as a response to ER.
Binary Catalyst Events and Price Decoherence
Remember what I said about price formation being a gradual, continuous process? In the face of special circumstances, in particularly binary catalyst events - events where the outcome is one of two choices, good (1) or bad (0) - the gradual part gets thrown out the window. Earnings in particular is a common and notable case of a binary event, because the price will go down (assuming the company did not meet the market's expectations) or up (assuming the company exceeded the market's expectations) (it will rarely stay flat, so I'm not going to address that case).
Earnings especially is interesting, because unlike other catalytic events, they're pre-scheduled (so the whole market expects them at a certain date/time) and usually have publicly released pre-estimations (guidance, analyst predictions). This separates them from other binary catalysts (e.g. FSLY dipping 30% on guidance update) because the market has ample time to anticipate the event, and participants therefore have time to speculate and hedge on the event.
In most binary catalyst events, we see rapid fluctuations in price, usually called a gap up or gap down, which is caused by participants rapidly intaking new information and changing their FEPF accordingly. This is for the most part an anticipated adjustment to the FEPF based on the expectation that earnings is a Very Big Deal (TM), and is the reason why volatility and therefore option premiums increase so dramatically before earnings.
What makes earnings so interesting in particular is the dramatic effect it can have on all market participants FEPF, as opposed to let's say a Trump tweet, or more people dying of coronavirus. In lots of cases, especially the FEPF of the short term (3-6 months) rapidly changes in response to updated guidance about a company, causing large portions of the future possibility spectrum to rapidly and spectacularly go to zero. In an instant, your Tesla 10/30 800Cs go from "some value" to "not worth the electrons they're printed on".
[Lily's Speculation] This phenomena, I like to call price decoherence, mostly as an analogy to quantum mechanical processes which produce similar results (the collapse of a wavefunction on observation). Price decoherence occurs at a widespread but minor scale continuously, which we normally call price formation (and explains portions of the random walk derivation explained above), but hits a special limit in the face of binary catalyst events, as in an instant rapid portions of the future expected payoff function are extinguished, versus a more gradual process which occurs over time (as an option nears expiration).
Price decoherence, mathematically, ends up being a more generalizable case of the phenomenon we all love to hate - IV crush. Price decoherence during earnings collapses the future expected payoff function of a ticker, leading large portions of the option chain to be effectively worthless (IV crush). It has interesting implications, especially in the case of hedged option sellers, our dear Market Makers. This is because given the expectation that they maintain delta-gamma neutral, and now many of the options they have written are now worthless and have 0 delta, what do they now have to do?
They have to unwind.
[/Lily's Speculation]
- Lily
submitted by the_lilypad to thecorporation [link] [comments]

No gods, no kings, only NOPE - or divining the future with options flows. [Part 3: Hedge Winding, Unwinding, and the NOPE]

Hello friends!
We're on the last post of this series ("A Gentle Introduction to NOPE"), where we get to use all the Big Boy Concepts (TM) we've discussed in the prior posts and put them all together. Some words before we begin:
  1. This post will be massively theoretical, in the sense that my own speculation and inferences will be largely peppered throughout the post. Are those speculations right? I think so, or I wouldn't be posting it, but they could also be incorrect.
  2. I will briefly touch on using the NOPE this slide, but I will make a secondary post with much more interesting data and trends I've observed. This is primarily for explaining what NOPE is and why it potentially works, and what it potentially measures.
My advice before reading this is to glance at my prior posts, and either read those fully or at least make sure you understand the tl;drs:
https://www.reddit.com/thecorporation/collection/27dc72ad-4e78-44cd-a788-811cd666e32a
Depending on popular demand, I will also make a last-last post called FAQ, where I'll tabulate interesting questions you guys ask me in the comments!
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So a brief recap before we begin.
Market Maker ("Mr. MM"): An individual or firm who makes money off the exchange fees and bid-ask spread for an asset, while usually trying to stay neutral about the direction the asset moves.
Delta-gamma hedging: The process Mr. MM uses to stay neutral when selling you shitty OTM options, by buying/selling shares (usually) of the underlying as the price moves.
Law of Surprise [Lily-ism]: Effectively, the expected profit of an options trade is zero for both the seller and the buyer.
Random Walk: A special case of a deeper probability probability called a martingale, which basically models stocks or similar phenomena randomly moving every step they take (for stocks, roughly every millisecond). This is one of the most popular views of how stock prices move, especially on short timescales.
Future Expected Payoff Function [Lily-ism]: This is some hidden function that every market participant has about an asset, which more or less models all the possible future probabilities/values of the assets to arrive at a "fair market price". This is a more generalized case of a pricing model like Black-Scholes, or DCF.
Counter-party: The opposite side of your trade (if you sell an option, they buy it; if you buy an option, they sell it).
Price decoherence ]Lily-ism]: A more generalized notion of IV Crush, price decoherence happens when instead of the FEPF changing gradually over time (price formation), the FEPF rapidly changes, due usually to new information being added to the system (e.g. Vermin Supreme winning the 2020 election).
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One of the most popular gambling events for option traders to play is earnings announcements, and I do owe the concept of NOPE to hypothesizing specifically about the behavior of stock prices at earnings. Much like a black hole in quantum mechanics, most conventional theories about how price should work rapidly break down briefly before, during, and after ER, and generally experienced traders tend to shy away from playing earnings, given their similar unpredictability.
Before we start: what is NOPE? NOPE is a funny backronym from Net Options Pricing Effect, which in its most basic sense, measures the impact option delta has on the underlying price, as compared to share price. When I first started investigating NOPE, I called it OPE (options pricing effect), but NOPE sounds funnier.
The formula for it is dead simple, but I also have no idea how to do LaTeX on reddit, so this is the best I have:

https://preview.redd.it/ais37icfkwt51.png?width=826&format=png&auto=webp&s=3feb6960f15a336fa678e945d93b399a8e59bb49
Since I've already encountered this, put delta in this case is the absolute value (50 delta) to represent a put. If you represent put delta as a negative (the conventional way), do not subtract it; add it.
To keep this simple for the non-mathematically minded: the NOPE today is equal to the weighted sum (weighted by volume) of the delta of every call minus the delta of every put for all options chains extending from today to infinity. Finally, we then divide that number by the # of shares traded today in the market session (ignoring pre-market and post-market, since options cannot trade during those times).
Effectively, NOPE is a rough and dirty way to approximate the impact of delta-gamma hedging as a function of share volume, with us hand-waving the following factors:
  1. To keep calculations simple, we assume that all counter-parties are hedged. This is obviously not true, especially for idiots who believe theta ganging is safe, but holds largely true especially for highly liquid tickers, or tickers will designated market makers (e.g. any ticker in the NASDAQ, for instance).
  2. We assume that all hedging takes place via shares. For SPY and other products tracking the S&P, for instance, market makers can actually hedge via futures or other options. This has the benefit for large positions of not moving the underlying price, but still makes up a fairly small amount of hedges compared to shares.

Winding and Unwinding

I briefly touched on this in a past post, but two properties of NOPE seem to apply well to EER-like behavior (aka any binary catalyst event):
  1. NOPE measures sentiment - In general, the options market is seen as better informed than share traders (e.g. insiders trade via options, because of leverage + easier to mask positions). Therefore, a heavy call/put skew is usually seen as a bullish sign, while the reverse is also true.
  2. NOPE measures system stability
I'm not going to one-sentence explain #2, because why say in one sentence what I can write 1000 words on. In short, NOPE intends to measure sensitivity of the system (the ticker) to disruption. This makes sense, when you view it in the context of delta-gamma hedging. When we assume all counter-parties are hedged, this means an absolutely massive amount of shares get sold/purchased when the underlying price moves. This is because of the following:
a) Assume I, Mr. MM sell 1000 call options for NKLA 25C 10/23 and 300 put options for NKLA 15p 10/23. I'm just going to make up deltas because it's too much effort to calculate them - 30 delta call, 20 delta put.
This implies Mr. MM needs the following to delta hedge: (1000 call options * 30 shares to buy for each) [to balance out writing calls) - (300 put options * 20 shares to sell for each) = 24,000 net shares Mr. MM needs to acquire to balance out his deltas/be fully neutral.
b) This works well when NKLA is at $20. But what about when it hits $19 (because it only can go down, just like their trucks). Thanks to gamma, now we have to recompute the deltas, because they've changed for both the calls (they went down) and for the puts (they went up).
Let's say to keep it simple that now my calls are 20 delta, and my puts are 30 delta. From the 24,000 net shares, Mr. MM has to now have:
(1000 call options * 20 shares to have for each) - (300 put options * 30 shares to sell for each) = 11,000 shares.
Therefore, with a $1 shift in price, now to hedge and be indifferent to direction, Mr. MM has to go from 24,000 shares to 11,000 shares, meaning he has to sell 13,000 shares ASAP, or take on increased risk. Now, you might be saying, "13,000 shares seems small. How would this disrupt the system?"
(This process, by the way, is called hedge unwinding)
It won't, in this example. But across thousands of MMs and millions of contracts, this can - especially in highly optioned tickers - make up a substantial fraction of the net flow of shares per day. And as we know from our desk example, the buying or selling of shares directly changes the price of the stock itself.
This, by the way, is why the NOPE formula takes the shape it does. Some astute readers might notice it looks similar to GEX, which is not a coincidence. GEX however replaces daily volume with open interest, and measures gamma over delta, which I did not find good statistical evidence to support, especially for earnings.
So, with our example above, why does NOPE measure system stability? We can assume for argument's sake that if someone buys a share of NKLA, they're fine with moderate price swings (+- $20 since it's NKLA, obviously), and in it for the long/medium haul. And in most cases this is fine - we can own stock and not worry about minor swings in price. But market makers can't* (they can, but it exposes them to risk), because of how delta works. In fact, for most institutional market makers, they have clearly defined delta limits by end of day, and even small price changes require them to rebalance their hedges.
This over the whole market adds up to a lot shares moving, just to balance out your stupid Robinhood YOLOs. While there are some tricks (dark pools, block trades) to not impact the price of the underlying, the reality is that the more options contracts there are on a ticker, the more outsized influence it will have on the ticker's price. This can technically be exactly balanced, if option put delta is equal to option call delta, but never actually ends up being the case. And unlike shares traded, the shares representing the options are more unstable, meaning they will be sold/bought in response to small price shifts. And will end up magnifying those price shifts, accordingly.

NOPE and Earnings

So we have a new shiny indicator, NOPE. What does it actually mean and do?
There's much literature going back to the 1980s that options markets do have some level of predictiveness towards earnings, which makes sense intuitively. Unlike shares markets, where you can continue to hold your share even if it dips 5%, in options you get access to expanded opportunity to make riches... and losses. An options trader betting on earnings is making a risky and therefore informed bet that he or she knows the outcome, versus a share trader who might be comfortable bagholding in the worst case scenario.
As I've mentioned largely in comments on my prior posts, earnings is a special case because, unlike popular misconceptions, stocks do not go up and down solely due to analyst expectations being meet, beat, or missed. In fact, stock prices move according to the consensus market expectation, which is a function of all the participants' FEPF on that ticker. This is why the price moves so dramatically - even if a stock beats, it might not beat enough to justify the high price tag (FSLY); even if a stock misses, it might have spectacular guidance or maybe the market just was assuming it would go bankrupt instead.
To look at the impact of NOPE and why it may play a role in post-earnings-announcement immediate price moves, let's review the following cases:
  1. Stock Meets/Exceeds Market Expectations (aka price goes up) - In the general case, we would anticipate post-ER market participants value the stock at a higher price, pushing it up rapidly. If there's a high absolute value of NOPE on said ticker, this should end up magnifying the positive move since:
a) If NOPE is high negative - This means a ton of put buying, which means a lot of those puts are now worthless (due to price decoherence). This means that to stay delta neutral, market makers need to close out their sold/shorted shares, buying them, and pushing the stock price up.
b) If NOPE is high positive - This means a ton of call buying, which means a lot of puts are now worthless (see a) but also a lot of calls are now worth more. This means that to stay delta neutral, market makers need to close out their sold/shorted shares AND also buy more shares to cover their calls, pushing the stock price up.
2) Stock Meets/Misses Market Expectations (aka price goes down) - Inversely to what I mentioned above, this should push to the stock price down, fairly immediately. If there's a high absolute value of NOPE on said ticker, this should end up magnifying the negative move since:
a) If NOPE is high negative - This means a ton of put buying, which means a lot of those puts are now worth more, and a lot of calls are now worth less/worth less (due to price decoherence). This means that to stay delta neutral, market makers need to sell/short more shares, pushing the stock price down.
b) If NOPE is high positive - This means a ton of call buying, which means a lot of calls are now worthless (see a) but also a lot of puts are now worth more. This means that to stay delta neutral, market makers need to sell even more shares to keep their calls and puts neutral, pushing the stock price down.
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Based on the above two cases, it should be a bit more clear why NOPE is a measure of sensitivity to system perturbation. While we previously discussed it in the context of magnifying directional move, the truth is it also provides a directional bias to our "random" walk. This is because given a price move in the direction predicted by NOPE, we expect it to be magnified, especially in situations of price decoherence. If a stock price goes up right after an ER report drops, even based on one participant deciding to value the stock higher, this provides a runaway reaction which boosts the stock price (due to hedging factors as well as other participants' behavior) and inures it to drops.

NOPE and NOPE_MAD

I'm going to gloss over this section because this is more statistical methods than anything interesting. In general, if you have enough data, I recommend using NOPE_MAD over NOPE. While NOPE in theory represents a "real" quantity (net option delta over net share delta), NOPE_MAD (the median absolute deviation of NOPE) does not. NOPE_MAD simply answecompare the following:
  1. How exceptional is today's NOPE versus historic baseline (30 days prior)?
  2. How do I compare two tickers' NOPEs effectively (since some tickers, like TSLA, have a baseline positive NOPE, because Elon memes)? In the initial stages, we used just a straight numerical threshold (let's say NOPE >= 20), but that quickly broke down. NOPE_MAD aims to detect anomalies, because anomalies in general give you tendies.
I might add the formula later in Mathenese, but simply put, to find NOPE_MAD you do the following:
  1. Calculate today's NOPE score (this can be done end of day or intraday, with the true value being EOD of course)
  2. Calculate the end of day NOPE scores on the ticker for the previous 30 trading days
  3. Compute the median of the previous 30 trading days' NOPEs
  4. From the median, find the 30 days' median absolute deviation (https://en.wikipedia.org/wiki/Median_absolute_deviation)
  5. Find today's deviation as compared to the MAD calculated by: [(today's NOPE) - (median NOPE of last 30 days)] / (median absolute deviation of last 30 days)
This is usually reported as sigma (σ), and has a few interesting properties:
  1. The mean of NOPE_MAD for any ticker is almost exactly 0.
  2. [Lily's Speculation's Speculation] NOPE_MAD acts like a spring, and has a tendency to reverse direction as a function of its magnitude. No proof on this yet, but exploring it!

Using the NOPE to predict ER

So the last section was a lot of words and theory, and a lot of what I'm mentioning here is empirically derived (aka I've tested it out, versus just blabbered).
In general, the following holds true:
  1. 3 sigma NOPE_MAD tends to be "the threshold": For very low NOPE_MAD magnitudes (+- 1 sigma), it's effectively just noise, and directionality prediction is low, if not non-existent. It's not exactly like 3 sigma is a play and 2.9 sigma is not a play; NOPE_MAD accuracy increases as NOPE_MAD magnitude (either positive or negative) increases.
  2. NOPE_MAD is only useful on highly optioned tickers: In general, I introduce another parameter for sifting through "candidate" ERs to play: option volume * 100/share volume. When this ends up over let's say 0.4, NOPE_MAD provides a fairly good window into predicting earnings behavior.
  3. NOPE_MAD only predicts during the after-market/pre-market session: I also have no idea if this is true, but my hunch is that next day behavior is mostly random and driven by market movement versus earnings behavior. NOPE_MAD for now only predicts direction of price movements right between the release of the ER report (AH or PM) and the ending of that market session. This is why in general I recommend playing shares, not options for ER (since you can sell during the AH/PM).
  4. NOPE_MAD only predicts direction of price movement: This isn't exactly true, but it's all I feel comfortable stating given the data I have. On observation of ~2700 data points of ER-ticker events since Mar 2019 (SPY 500), I only so far feel comfortable predicting whether stock price goes up (>0 percent difference) or down (<0 price difference). This is +1 for why I usually play with shares.
Some statistics:
#0) As a baseline/null hypothesis, after ER on the SPY500 since Mar 2019, 50-51% price movements in the AH/PM are positive (>0) and ~46-47% are negative (<0).
#1) For NOPE_MAD >= +3 sigma, roughly 68% of price movements are positive after earnings.
#2) For NOPE_MAD <= -3 sigma, roughly 29% of price movements are positive after earnings.
#3) When using a logistic model of only data including NOPE_MAD >= +3 sigma or NOPE_MAD <= -3 sigma, and option/share vol >= 0.4 (around 25% of all ERs observed), I was able to achieve 78% predictive accuracy on direction.

Caveats/Read This

Like all models, NOPE is wrong, but perhaps useful. It's also fairly new (I started working on it around early August 2020), and in fact, my initial hypothesis was exactly incorrect (I thought the opposite would happen, actually). Similarly, as commenters have pointed out, the timeline of data I'm using is fairly compressed (since Mar 2019), and trends and models do change. In fact, I've noticed significantly lower accuracy since the coronavirus recession (when I measured it in early September), but I attribute this mostly to a smaller date range, more market volatility, and honestly, dumber option traders (~65% accuracy versus nearly 80%).
My advice so far if you do play ER with the NOPE method is to use it as following:
  1. Buy/short shares approximately right when the market closes before ER. Ideally even buying it right before the earnings report drops in the AH session is not a bad idea if you can.
  2. Sell/buy to close said shares at the first sign of major weakness (e.g. if the NOPE predicted outcome is incorrect).
  3. Sell/buy to close shares even if it is correct ideally before conference call, or by the end of the after-market/pre-market session.
  4. Only play tickers with high NOPE as well as high option/share vol.
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In my next post, which may be in a few days, I'll talk about potential use cases for SPY and intraday trends, but I wanted to make sure this wasn't like 7000 words by itself.
Cheers.
- Lily
submitted by the_lilypad to thecorporation [link] [comments]

Some Game Balance Thoughts from an Eve Veteran

Hi everyone,
I've been passionate about sandbox games and how they are designed into a functioning coherent environment. I developed most of this passion in Eve and served as a CSM last year. I'm hopeful that DU will be the future of sandbox sci-fi games. I wanted to note down how I think NQ can better some of the game's most important aspects. Some of their staff probably read here too. The forums have this "one idea per thread" rule, so I decided to put them here. Here are some problems, and how I would solve them.
PvP
1) Cube Meta: Need viability for non-cubes.
2) Small vs Big Ships: Need drastic balance.
3) Non-Consensual PvP:
The current non-consensual PvP is very binary and unsustainable. If you can find some people careless enough to go in a direct path between two planets with no radars, you kill them. People will wake up (or they already did) to this very fast, plus warp drives will become abundant, and pretty soon no such PvP will be possible. Meanwhile, if you are a new player with no knowledge and you get caught to pirates like this, you basically have zero options to protect yourself.
Economy
1) There is no need to trade.
2) Resource Hexes are too disposable.
3) No mining robots please.
Overall I have great hopes but also concerns about the game. One major concern/test was whether the server tech will hold. It has improved a lot and that's great news for NQ. The next concern is whether NQ is spread too thin. The game's development was probably too early to commit to a non-wipe environment, and NQ might be underestimating how much it lacks vs an actually functioning ecosystem. Not to mention customer support is pretty nonexistent (god forbid you have a problem that's beyond the Discord staff's abilities). People will get bored of cool looking handcrafted ships pretty fast unless they have meaningful stuff to do in them very soon.
Let's see how things develop.
o7
submitted by Olmeca_Gold to DualUniverse [link] [comments]

[Serial][UWDFF Alcubierre] Part 54

Beginning | Previous
Premier Valast felt a tingle. It began at the base of his spine and traveled moved upward, sending warm fuzzy feelings all throughout his body as it made its way to his brain and inserted itself in his conscious thoughts. After all of the misery. After all of the failures. For once, something had gone right.
How delightful. How extravagant. How deserved.
The Humans had made a mistake. Clearly, they had thought to expand upon their treachery, believing themselves to be invincible. Their monstrosity of a vessel had appeared just as their last one had, within Halcyon's inner perimeter. After their ruse of parlay, their beast had commenced belching out weapons of mass destruction, clearly in an attempt to retrieve the encryption key and the elite assassin-thief they had dispatched under the guise of a Witness.
They thought Halcyon weak. Defenseless.
Not true! Not true at all!
Kinetics. Valast laughed aloud, his rib cage heaving out great guffaws. Accelerated mass! More laughter. The savages thought to bring such inelegance against the might of the Combine? They mistook their prior fortune for competence. Their one-time success for future capability. Alas, poor Humans, the truth of your inadequacies is made manifest! The brief gap in the defenses brought on by the improbable chain of events that had resulted in their arrival had been filled. For all of their destructive potential, their weapons were useless.
Valast continued to cackle, his hindclaws scrunching up the soft material of his pillow, as he watched the Humans receive their punishment for their insolence. The Humans had made assumptions. Perhaps assumptions were fine in their backwater corner of the galaxy, but here, among civilization, assumptions could be quite dangerous indeed. It was quite unwise to assume Halcyon would leave the inner perimeter exposed. They must have thought their Evangi co-conspirators would leave the gates open for them, as the traitor Neeria had done when she had given them access to a Combine wormkey in the first place. Sadly for the Humans, their four-armed friends had been exposed for what they were. A great many of the Evangi now lay motionless on the floor of a Halcyon mainway, a fitting end to their perfidy.
Halcyon had stood since the beginning, and it would continue to stand long after the Human infestation had been expunged from the Combine Space. Perhaps the Humans should have spent more time pondering the nature of the place before they had meddled with forces they clearly did not understand. Halcyon existed in defiance of the chaotic nature of the neutron star it orbited. Its survival required an solution to the objects such a gravity well attracted. Halcyon had many such solutions, weaved together to maintain a delicate balance. Among them were the inertial dampeners.
The screen in Valast's paws bloomed with colors, indicating firings of Halcyon's inertial dampeners. Each blossom of color was an attempt by the Humans to deploy weapons in clear violation War Accords, cementing Humanity's position as a menace to decent civilization. Had Valast not commanded Bo'Bakka'Gah to take the necessary precautions, the devastation would have been significant.
Lines of crimson sailed through the blooms of color.
Valast's whiskers twitched, his eyes squinting as it tracked one of these lines.
The solution was not perfect. The intertial dampeners in close proximity to Halcyon were a final precaution, and their purpose was narrow. They were a fine net, meant to indiscriminately capture any residual high-speed astral particulate that had escaped the outer defenses. Their efficacy diminished at an exponential rate in proportion to the size and mass of the object they acted upon. Thus far, they had been quite successful at preventing the Humans from making use of their weapons, but dampeners had no effect on the Human vessels. Even if the dampeners could be used for such a purpose, their indiscriminate nature would have required the cessation of all space born travel within Halcyon, an unacceptable disruption to the workings of the Combine's capitol.
The Humans' small spherical vessels were thus capable of traveling unimpeded throughout Halcyon space, tracing their crimson lines behind them as they did so. Such a thing did not overly worry Valast. They could not fire their weapons, and they were susceptible to electromagnetic disruption, rendering them easy targets for the Peacekeepers. Were Valast not otherwise consumed with the affairs of state, he would perhaps take to the front line and dispatch a few himself. Sadly, his bravery would find no opportunity for direct expression beyond the valor found in the privilege of command competently exercised.
The whiskers ceased their twitching and some cheer returned. It would not be long before the meddlesome Human spheres were swatted from the sky and the encryption key recovered.
Then they would dispatch the Human warship.
Then Humanity.
He need only wait.
-----------
"Get spread. Get small." Sana called out. Had to buy time. Had to get a handle on the situation. Not her first rodeo, but it was the first time where she had no idea what the hell she was riding. Maybe the aliens were riding her. Maybe it wasn't a rodeo, maybe it was just a slaughter.
That was the problem. No one knew anything.
The callsigns in her local were dropping like flies. Squaddies getting wiped without so much as a peep. The eggs in Science were saying EMPs, but the balls were supposed to be fixed against that frakkery. Sensors said the balls were still there even after they went dead, so maybe they were right. Couldn't think about that now.
Couldn't think about anything but the mission.
Captain Sana Bushida had a shit-shuttle to bring to station.
She needed to get from A to B. Normally the quickest point-to-point was a line, but the baddies were coming in from all sides. Trying to corral her in. So be it. She could handle a long and squiggly with the juice she had in the four balls attached to the cockpit. Only question was how long they'd be up for. Whatever they were using on the balls wasn't touching her. She was good, but she wasn't that good.
Guess they wanted her kicking and screaming.
Predators, not scavengers then.
Frakk 'em. Right in their stupid alien faces.
Sana's brain shunted command signals as fast as her eyes to parse the readouts in her pilot pod. Dodging. Weaving. Diving. Dipping. Half those words didn't even apply to space, but they felt right. Float like a butterfly, run like cheetah on amphetos. She'd sting 'em later.
Run run run, fast as you can. You can't catch me, I'm the shit-shuttle can.
Swipe. Swipe.
Two smaller ships moved in a pincer formation, one cutting off her angle around the larger ship she was skimming around. Sana let out a giggle, as she shoved the shuttle in another direction. "You thought you had me, crapdonkey? You never had me. You're gonna be seeing my ass all day." The giggle somehow transformed into a roar halfway through as a third ship appeared in her view, coming out from its hiding place on the other side of the large ship. "SCREW YOU!" They weren't going to win. Losing wasn't an option.
Swipe.
Patterns emerged as the ballet played out. Certain ships were the herders. The small annoying frakks that always seemed to be moving around her flanks. Other ships were the receivers. They were the big boys. The ones who just floated there like giant shits in space. Lazy frakks just waiting to be fed some shit-shuttle. Fine then. New info. New tactics. New rule: Get around the herders, never get closer to the receivers.
Herders bad.
Receivers bad-der-er.
As long as she was a step ahead of the herders and two steps away from the receivers, she'd be fine. Problem was they were more agile than her. Problem was there was more of them. Problem was the friendly callsigns on her readouts kept disappearing. Problem was that she was stuck in here instead of out there where she belonged.
Ninety-nine problems...
Swipe. Swipe.
All she needed was a line of sight. A place where she could get a whiff of open space and just gun it. Navigate the maze. Get through it. Light at the end of the tunnel. Glass is half full.
Metaphor.
Analogy.
Idiom.
The stream of consciousness flowed out of her, expressing itself in her verbiage and in the desperately navigating shuttle some distance away. Step forward. No steps backward. Okay, maybe one step backward, but it'll be okay. She'd take the step forward soon enough.
Just...needed...a...line.
Alpha, Beta, Charlie, and Delta was gone.
It was just her.
Swipe. Swipe.
The fate of the world.
The shit-shuttle must survive.
Swipe. Swipe.
The gap opened.
She saw it.
They didn't.
"There it is bitches!"
All four balls slammed the thrusters on. It wasn't a direct bee line to the Oppenheimer but it was good enough. She just needed to get out of the hornet's nest and into open space so she could keep pouring on the acceleration. She didn't know how much juice the herders had, but it was all she had going for her at this point.
Bitter bile rose up in her throat as the shit-shuttle surged forward, leaving A through D behind. Her squaddies. Her friends.
Abandoned.
She should be out there.
She could be. She just needed to get the mission done. She was so close. She was putting distance between her and the baddies. Just a few more minutes...the link cut off.
Her thoughts were shunting into a wall.
She swiped, her eyes scanning the readouts.
Alcubierre - Shuttle - Cockpit (Ejection)(DISTRESS) no longer appeared.
For once, Sana was speechless.
---------------------
Kai retched air.
There was nothing else to throw up at this point. He'd given everything he had to give, and it was now floating about the cockpit in a viscous cloud. He was fairly certain Neeria was collateral damage in the matter. If she were ever to regain consciousness, she'd find she had been provided with a fresh coat of puke paint. At this point, being blind was something of a boon. Congratulations were owed to the sadist in the pilot's seat though, he hadn't emptied his stomach like this since flight sims.
He'd raise his hand in salute if it weren't for the incredible g-force shifts whipping him around like a rag doll as the pilot attempted to avoid whatever was out there. Some of the maneuvers seemed impossibly complex, as if the cockpit was navigating through an impassable morass of enemies. Or perhaps the pilot was just drunk. Either seemed possible.
The whipsawing continued. Back. Forth. Round and round. Acceleration never seemed to continue in a single direction for more than a few seconds. They were going in circles. They had to be.
Finally, it appeared the pilot had decided on a direction as Kai was slammed back into his chair as the cockpit rocketed forward under sustained acceleration. They must have broken through. Or the pilot had fallen asleep at the controls with the throttle down and they were all doomed. Either way. At this point, Kai was just eager for it to be over.
The acceleration continued. He felt like he was being crushed. Like an enormous hand was pressing against him, trying to squeeze all of his organs out through his eyes. Whatever was powering the cockpit now was beyond the parameters of the shuttle's acceleration compensators. His vision began to dim and his joints ached. Pain surged up in his right arm, which was still contorted within the goo. He was fairly certain a bone had just snapped.
"Oppenheimer..ETA," Kai managed to gasp out, drawing the breath back into his lungs with some effort.
"The shuttle is not currently on course to intercept with the UWDFF Oppenheimer."
"Joan." Kai wheezed. "Connect. Joan."
The acceleration cut off.
Kai took a huge gulp of air, the relief immediate. "Comm-link. Fleet Admiral Joan Orléans."
No response.
Kai tried again.
Silence greeted him.
Grumbling, he raised his left wrist toward his face. He stuck out his tongue and smeared it along the wrist console's interface. None of the expected beeps and chirps sounded out. It was dead, and, he suspected, so was the cockpit along with whatever had been propelling him. No life support. No way to call out for help. No way to do anything but sit there. For all intents and purposes, they were a hunk of space junk drifting off into the black oblivion.
Fair enough. It was a fitting end.
Helpless.
Hopeless.
Kai tried to muster some anger at the situation, if only to distract him from the pain coursing through his body, but found he was up to the task. It was easier to be motivated when there was something to do. Some way he could impact the situation. But there was nothing to do but wait. Maybe he'd live. Probably he'd die. He didn't mind it, that was the same binary he faced every other day. It was a bit more present in his mind than it normally was, but the truth was that he was overdue for demise. He'd given death the slip more times than anyone had a right to.
Still. It bothered him.
Not the death part. The not doing what he set out to do part.
He had run through walls, both literal and figurative, to make it this far. He didn't know what making it back to the Oppenheimer would mean for Humanity, but it had to be better than not making it. The encryption key -- what did it do? What could it do? Would it be doable? Neeria -- could she guide them? Could she help them navigate the treacherous galaxy Humanity was just beginning to play a part in?
There were so many questions. The answers could matter.
Kai tried to remember how much time they had. Without life support, the supply of oxygen would rapidly begin to deplete. He supposed it didn't matter, since he had no idea whether Neeria breathed, what Neeria she breathed, or the rate she consumed it. His space suit had a few hours of stored supply, but it was designed to work in conjunction with his helmet. Without the wrist console, he'd need to find some way to manually vent it.
That was something to do. Small, but perhaps meaningful. Anything to tilt the scales just a little bit more in their direction. Just a few more minutes of air could make a difference.
"Seconds matter," Kai wheezed out. His breath was wet and tasted of iron. He'd worry about that later. Air first. It wasn't much of a plan, but it was better than nothing.
He hoped Joan's plans were faring better.
-------------------
The Admiral's Bridge was awash in a sea of red. Multiple views vied for primacy as the situation continued to deteriorate. So far, the Oppenheimer itself had withstood the sustained EMP assault directed its way, but the same could not be said for the battle balls. Callsigns continued to blink out of existence with every passing second. The Oppenheimer had immediately attempted to provide supporting fire, but its kinetic weaponry was similarly disabled. Whatever the circumstances had been that had allowed the Alcubierre to destroy an alien vessel, they were clearly no longer relevant to the situation at hand. Without kinetics, the vast majority of Humanity's space-born projective power was effectively nullified. Science was looking into explanations and alternatives, but it would take time.
The Oppenheimer's EMP arrays had succeeded in firing, but the alien vessels appeared to be impervious to that form of assault. It was unclear whether they possessed EMP hardening around core processes similar to the Oppenheimer or they had other means of deflecting attacks of that nature. In the absence of an alternative, the Oppenheimer was continuously discharging the EMP arrays as they became available, attempting to test for weaknesses. The energy drain from the sustained fire was easily accommodated by the altered physics of local space, but it was unclear whether alien defenses could be worn down by continuous assault.
Other oddities were appearing as the situation unfolded. The aliens did not field any tactical fighters that their sensors could identify. There were ships of different sizes, but, thus far, no vessels had moved to directly engage the balls. Kai's cockpit was being corralled by a series of smaller ships working in conjunction with the larger ones, but that was it.
Joan considered it, trying to parse out deeper meanings from the absence. Human conflict, both Earthside and in space, had always heavily relied on tactical fighters. They had numerous advantages in terms of firepower projection and significantly increased tactical dynamism in a battle zone. Either the aliens had never considered the approach, or it was considered suboptimal within this environment.
Joan squinted, watching as the battle ball's callsigns dropped from the battle status view. She tilted her head. "This environment," she muttered to herself, her eyes drawn to the EMP array firing status. The recharge bars filled and expended. Filled and expended. Each cycle representing an incredibly powerful pulse of electromagnetic energy at the speed of light.
Speed of light.
Speed.
The answer struck her. The ramifications of the answer were displeasing. Plans must be altered. Contingencies reconsidered. The Black Fork was too optimistic. Their position was considerably worse than hoped for, but not entirely beyond anticipated outcomes, which had included their immediate destruction upon arrival in the system. They simply had fewer tools than she desired.
Tactical fighters had low utility when combat operated at the speed of light. There was no yield on agility, because no thruster could move faster than light could travel. There was no evading a lightspeed weapon at these distances. Unless a tactical fighter could retain functionality under fire, which the death balls so far could not, they were a pointless extravagance. At best, they could serve as a momentary distraction, particularly when their weapons were inoperable.
The unique characteristics of Humanity's birthplace were a hindrance here. Kinetics were the logical path for weaponry to take in an environment where destructive output was a matter of maximizing scarce energy resources. They were also the easiest, most natural extension from their Earthside forebears. Humanity had begun development of lightspeed weapons, the EMP and the Griggs pulse among them, but they placed tremendous strain on ship systems. The Oppenheimer, as a dreadcarrier, was among the few Earth spaceships that contained a full battery of EMP arrays. Due to the extremely demanding specifications, only a Pulser class ship could make use of a Griggs pulse. Had Humanity known what it faced just beyond its doorstep, it would have invested its research and development resources differently.
Too late now.
The game was not lost yet, they simply must play the hand they were dealt to its greatest effect.
A display flashed from green to red and moved toward the center of the wall, increasing in size. Simultaneously, three other displays shifted in color, position and size, in a chain reaction. Joan frowned. Or perhaps the game was lost, and she was only just realizing it. The shuttle cockpit's callsign, along with the four balls that had attached to it, had disappeared. Her hands darted up and began a series of gestures, swiping North to South as she removed some filters from the local space scan and South to North as she applied others.
She exhaled.
The shuttle had not been destroyed, only incapacitated. It was careening through space away from the cluster of alien ships closest to Halcyon, though a few were in rapid pursuit. The pursuers had acceleration in their favor, but the shuttle's current course brought them toward the Oppenheimer.
Joan flicked a few fingers, pulling the course data from the local scan and pushing it into the timer view.
Before Joan could issue the order, the nearest balls peeled off and immediately began an intercept course with the shuttle. Joan pulled up the command-chain, it appeared that Captain Bushida had decided to be proactive. Very well, but it would not be enough. The balls were more likely than not to be incapacitated before they could be used in any rescue effort. This required a more substantial intervention if the outcome were to be changed.
Joan pushed a new course heading into her comm-link with Ragnar. "Captain, I am moving us off of the Black Fork standing orders."
Ragnar glanced at the course heading. "That's even further in."
Joan nodded, "It's the only way we'll recover the cockpit. The balls can't get the job done."
"There's a risk the Oppenheimer won't get it done either. They're holding back," Ragnar replied, his eyes scanned off screen, bouncing between the various readouts and inbound requests. "Doesn't make any sense they'd only have EMPs. They've got more."
"Likely. My current belief is that they will refrain from further escalation until they have either secured the cockpit or believe they can no longer retrieve it. Each moment of escalation from them has been in response to an action on our part directed at the cockpit."
Ragnar wiped the back of his sleeve against his brow, mopping up the sweat. "Must be something important."
"Must be. The prize is likely worth the pain here, Ragnar. Retrieving the cockpit is the top priority. Preservation of ourselves is an ancillary concern."
"G4 is only a few out. We can hold that long," Ragnar said.
"Get the job done, Captain," Joan ordered and then cut the comm. Ragnar was a sophisticated battlefield tactician. The overlap between them was significant, and the differences between them were accretive to both. They both knew there was another card to be played, it was just a matter of whether Humanity could adapt to it.
Joan opened another comm-link. "Chief Adeyemi."
The Chief blinked a few times as the interjection, as if being pulled from a daze.
"Idara!" Joan exclaimed. "Where's Science at?"
Idara wet her lips, "We've gathered the data and mapped it to a few different explanations...but we need more--"
"You don't have it. Best guess, go."
"Some sort of inertial dampening field. Effects smaller objects. Weakens as the objects get larger. Only affects objects moving a certain speed. Only affects objects in space. Our kinetics are getting caught. Bigger objects, like the fighters, like the Oppenheimer, are fine. Bullets fired inside of the Oppenheimer are fine.
"Any sense on source?"
Idara shook her head.
"But it doesn't effect the fighters. Doesn't effect energy based weapons."
"From what we can see, that's right."
Joan's eyes drifted toward the tracker on Kai's cockpit. Hurtling through space.
"Idara, when the Alcubierre was heading for Proxima Barrier, your modeling said the ship would survive the impact, correct?"
"Yes, Admiral. There isn't an equal an opposite reaction. Actor has primacy in these physics."
Joan stared at Idara, lost in thought. The Chief shifted uncomfortably, "Is there something else--"
"I have what I need," Joan replied, cutting the comm.
She pulled up the status tracker on the balls. Over eight-five percent of launched fighters had already been incapacitated. The Oppenheimer still retained a final wing in its hangers, numbering approximately a hundred and twenty additional balls.
Joan watched the timers ticking down. They needed to go on the offensive. To find a way to tilt the situation in their favor. Even if they retrieved the cockpit, it was a long way back to the wormhole, and a long time to survive before G4 appeared. If the aliens had an ace up their sleeve, that would be the time to play it, when they had nothing to lose, and everything to gain.
She re-opened the comm with Ragnar. "Captain, I think we can even the odds a bit."
"I'm all ears, Admiral."
Joan pushed a series of orders to Ragnar. He glanced at them and then glared at her, "You want--
"Yes, Captain, that's what I want."
"But they'll be destroyed," Ragnar responded.
"Not if they're moving fast enough. Get whoever we can get back into the hangers, launch the rest without the pilots. Target the ships. Target Halcyon."
Ragnar stared at her, "Halcyon? That's a civilian--"
"Captain, I want those balls dumped and under full steam at the designated targets. That's an order."
Ragnar opened his mouth and then shut it. A hand came off screen and formed a salute. The comm was dropped shortly after. Almost immediately, the tactical fighters shifted flight plans and began their retreat toward the Oppenheimer. Simultaneously, the wing residing within the *Oppenheimer'*s hangers shifted from stand-by to active. Soon they would be launched, pushing top acceleration toward Halcyon. No EMP would be able to stop them. If the aliens had another card to play, Joan hoped this would force it out and maybe, just maybe, buy enough time for G4 to make an appearance.
She just needed a little time.
Just needed to survive long enough for the Pulsers to arrive.
Seconds mattered.
Next.
Be sure to leave a comment or an upvote if you're enjoying Alcubierre. If you want a sense of how much it matters to me, here's a very emo journal entry documenting it.
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I have been conducting a strange experiment on my Twitter which people seem to be enjoying. I found an AI bot that randomly posts impactful images every few minutes. I've decided to craft a narrative on top of these random images called "The Human Archives."
submitted by PerilousPlatypus to PerilousPlatypus [link] [comments]

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. I do my bit 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.
submitted by fuzzyblankeet to wallstreetbets [link] [comments]

[Review] Ranking all the Switch shmups Ep26 – Darius Cozmic Collection Arcade

We’ve all had a game that is a gateway to a specific genre. That one game which made us pay attention to a style of games and allowed us to fully experience the genre. It might not have been the first one we play, but it is definitely one that stays closer to our hearts. For me, this game was Darius.
I’ve mentioned this in the past, but I will say it again: Darius is the shmup that is closest to my heart. I loved the horizontal gameplay, I loved the Silver Hawk, I loved all the huge bosses that looked like fishes. The gameplay also hit bunch of chords that resonate with what I love about shmups. I’ve been waiting so long for this, so alas, I present to you: Darius Cozmic Collection Arcade!
Publisher: ININ Games
Platform: Nintendo Switch
Release date: Jun 16, 2020
Price: $44.99
Tate: Built-in
Darius Cozmic Collection Arcade is a collection of the Darius games released on the arcades. This wasn’t your typical cabinet, as one of its main features was the usage of multiple screens. Darius used 3 screens, while Darius II/SAGAIA used 2 screens. M2 really went out of their way to bring the most authentic arcade experience! The result is impressive to say the least!
This collections includes 4 games:
Darius and SAGAIA include 3 and 2 different versions respectively, bringing it to a total of 7 playable games.

ARCADE GLORY

As hard as this might be to believe, I have never played an arcade Darius game before. I always mentioned Darius as my favorite shmup, but the truth is that I began with the SNES games. I had heard on the street that the arcade versions were superior so I was very excited.
When I booted the original version, I couldn’t help but feel like I was standing next to an actual arcade cabinet. The game greeted me with 3 screens places next to each other on the center of the screen. I was excited to play, so I pressed the coin button. I was not prepared for what I was about to experience…
As soon as I inserted the coin, a typical fanfare played along as my credit counter increased by one. But there was something else. The controller started vibrating to the tune of the music. I just can’t make justice to this effect with words. It felt like being inside an actual arcade cabinet. Vibrations and sound made the experience feel authentic. It made me think about the arcade days where you would hear cabinets everywhere and just feel the energy of the place.
As soon as I started to play, the screen changed and the empty spaces were replaced by arcade artwork. This artwork was exactly the kind you would see pasted near the controllers to show you how to play and other general information. Everything about the game was designed to make you feel like on the arcade. This is the kind of presentation that every other arcade port should try to achieve.

FISH GRAVY

What truly sets apart the Darius Cozmic Collection from any other collection is the amount of features and arcade fidelity that M2 added to the game. Every single aspect, every single menu and every single feature was lovingly added to create a masterpiece.
From the get go, you will be presented with the very familiar “A boss is approaching” message featuring King Fossil. The message just says that your game data is approaching fast. It really is only a fancy way of saying the game is loading, but it sets the tone to the orgasmic experience that you are about to have with the game.
After going through the intro scene, you will be greeted with the main menu which contains all 7 playable titles in this collection. You also have a replay, manual and staff options. If you are wondering where the options are, they are specific for each game, so they must be adjusted from within each game. My only complaint here is that the manual is in japanese. There isn’t much to learn from a manual though. The only thing was the Darius Gaiden capture mechanic, so I picked that one up from the internet.

AN ENTIRE LEGACY

Speaking of the games, 7 different titles can be quite intimidating. If you are anything like me, then chances are you don’t know what’s “new ver” or “extra ver”. Thankfully, each game features a sort of museum display that features a screenshot of the menu, the title, the launch date and a very thorough description of the game. The text will navigate you through each version of the games and specifically highlight why it is different from its predecessor or what was changed when going to western markets.
Each game includes a training mode for those who wish to challenge specific parts of the game. Training mode will let you choose to play any stage and customize a variety of settings such as the strength of your Silver Hawk and the game rank, which is the in-game difficulty. The obvious use for this mode is to practice your piloting skills and go for the 1CC. Even casual players can view this as a pseudo level select cheat code for maximum enjoyment!
Perhaps one of the most amazing inclusions of the collection is the replay mode. For every one of your play throughs, there is an option to save a replay of your play session. What differs from regular replays, is that they pack an incredibly robust set of features. Other than being able to watch a recording of yourself, you can see your inputs and control the playback of the replay. You can rewind, fast forward, go back, increase the speed or even go full slow-mo to analyze your gameplay.

KING OF THE ARCADE

Challenging oneself is one thing, but going after the world is the true spirit or arcade shmups. Darius Cozmic Collection Arcade features online rankings which are separated into 2 categories: “Arcade” and “All-mix”. Arcade is played with every setting on default and using only one credit. If you are playing and choose to spend an additional credit to continue, then your scoring is changed to “All-mix”. All-mix is a catch-all for every other style, from easy difficulty to hard or even static rank modes.
If you ever wondered what’s it like to play like the king of the leaderboards, then you’ll be glad to know you can download leaderboard replays! This allows you to watch the entire play throughs of top players, along with their inputs and the previously mentioned playback features of a replay. A must have for those willing to go for the record or even those curious about what it means to be a champion.

YOUR PERFECT CABINET

The in-game menu for each game will further let you customize your gameplay experience. The amount of options is truly staggering, so suffice to know that you can change in-game setting as difficulty and score for an extend, screen quality adjustments like scan lines and gadgets, and the controllers.
One menu I really want to highlight is the gadgets menu. Gadgets are responsible for making the gameplay experience truly stand out. They track all sorts of data from yourself and the enemies. From a friendly side, you can see your current level of power, the number of hits your arm can take and the information related to the current zone. From a less friendly side, you have all sorts of analyzers that display the current boss, their weakness and detailed HP for each of their parts. There’s even a life gauge that appears at the bottom of the screen for easy viewing when fighting bosses!
Although I could see an argument against being way too much information, I’m personally thankful because I’m a data nerd and I love knowing all this information. If it is too much for you, then you can always turn off the gadgets and customize the screen to your liking. The real beauty comes from creating your perfect cabinet.

THE EMULATOR ADVANTAGE

One of the main selling points of emulators has been the ability to use save states. Darius Cozmic Collection is no slouch and features save states of its own! These save states will let you cheese the game as much as you want, but they also let you replay specific sections and master them for your future arcade runs. I won’t judge you, so have fun with save states! The only caveat is that using save states will not record your score. Unfortunately, replays will only record from the last time you loaded the save state onwards. So there’s no chance of creating tool-assisted runs.
Oh yeah, I forgot to mention that bringing up the in-game menu will completely pause the game and show you a fully-fledged map of the game, complete with boss encounters for each zone and the amount of power-ups featured in said zone. It really is great for strategy purposes to know which stage will allow you to upgrade your Silver Hawk! Resuming a game will also give you a 3 second count down with a jumping robot animation to ensure you are ready for action. This detail wasn’t really needed, but it is one of the many ways in which M2 shows appreciation for Darius and the player.
Out of all this nitty gritty details, I have to say the song name is one of my favorites. In the bottom right corner of the screen there is a pop-up that appears when the song changes and displays the song name. I just think it looks really cool. By the way, don’t forget to check “Olga Breeze”, my favorite song!

DARIUS, THE OG

Darius, the game that started it all. Featuring 3 screens, this is the biggest Darius game featured in this collection (ha!). If I may add, I also think this is the game that highlights all the love M2 poured into bringing arcade experiences to your living room. With features such as the cabinet art and the body sonic vibration, it really brings home the arcade feeling.
As you can expect, playing the first game on the series is both, a nostalgic and a painful experience. Playing on 3 screens is truly magical, but at the same time, it is a victim to the older design choices. Not much that can be done here, after all, it is a decades old game. Just a small detail to keep in mind.
Darius helps establish the foundations of the franchise from the very first game. One of the Darius staples is the upgrade system for the Silver Hawk. Throughout the game, you can encounter 3 different orbs which are dropped by different colored enemies. The orbs can be red, green or blue.

SILVER HAWK

Red orbs will upgrade your primary fire. Each orb increases your power, but collecting 7 will upgrade your shot to the laser, and then the wave. Green orbs will upgrade your bomb, which is your secondary fire. Bombs also get stronger with more orbs and also upgrade when you reach 7. Blue orbs will give you a shield called arm. The initial shield blocks 3 hits and any additional orb will add 1 more hit. Just like red and green, you can upgrade after 7 orbs which will make it so that additional orbs give you 2 hits and then 3.
The downside to the upgrade system is that, upon death, you will lose every orb you collected in your current tier. The good news is that if you, for instance, managed to upgrade to the laser, then your shot can never fall below that. The bad news is that the number of orbs is limited per stage, which means it is almost impossible to upgrade within a stage the same stage where you died. The exception is a single stage that has 7 blue orbs in the old version and one with 7 green in the extra version.

THE FISH

The most distinguishable characteristic of the franchise is definitely the marine bosses. The stages are all over the place with a very diverse space settings, but the bosses are always one thing: fish. Actually, I’d say it is marine biology, but fish is an overly simplistic way to describe it. Darius also has one peculiarity which is that every set of stages has the same boss. For example, the 4th stage boss will always be Fatty Glutton in a different version depending on which zone you chose.
The other defining feature of Darius is being able to choose your adventure. After each boss, you can choose to go to one of 2 different zones. This choice is made by either being on the top or bottom half of the screen, as the stage actually splits after beating the boss. It certainly took me off guard the first time as I crashed into the divider. Despite having the same boss, the zones are drastically different and carry the strategic choice of having a different number of orbs. Your path will be determined by which aspect of your Silver Hawk you want to improve.

THE COINS

What struck me the most about Darius is how unforgiving it is. This is expressed in the descriptions of the newer versions. The thing about Darius, is that the game is next to impossible to beat if you didn’t fully upgrade. Later enemies are merciless and if you don’t have sufficient firepower, then you probably won’t stand a chance. This ruthlessness is exacerbated by the death system, as death will set you considerably behind. Because upgrades are usually a 2-stage effort, getting shot will set you back 2 levels worth of progress.
A fun aspect I found on Darius is the dynamic created by having 3 screens. This is probably the widest game I have played, and it brings new challenges to the table. The first one is that you need to gain screen position to succeed. Being at the front is usually better, with moving back feeling like losing real estate. The reason behind this is that you are able to shoot down enemies before they become a threat with their numbers. The other less obvious reason is the number of bullets allowed on screen. That number is limited, so it is in your best interest that those bullets expire fast so you can fire new ones. Being back equals more time before they reach the end of the screen, which is undesirable.
Overall, the game poses a unique challenge, but I’m not going to lie, it is actually really fun to play. Achieving an upgraded Silver Hawk is a hard endeavor, but that makes it even more rewarding when you pull it off!

DARIUS II/SAGAIA, THE PROOF US WESTERNERS HAVE SHORT ATTENTION SPANS

Darius II came in and simplified the game in some interesting ways. First of all it reduced the upgrade system so that it is now only a single stage that can be maxed out. The number of orbs was reduced to compensate. Another simplification comes courtesy of the screens themselves. The number of screens was reduced from 3 to 2 in order to be installed in other dual screen cabinets such as The Ninja Warriors.
Unfortunately, the single stage of upgrades means that the game is even more savage when you die. This time around, you actually lose all of your progress in terms of firepower. There will be special rainbow orbs which help you catch up a little, but even then they might be a little too late. As a result, my 1CC had to be done by never dying.

I ALWAYS WANTED A THING CALLED A TUNA SASHIMI

One thing I want to mention, is that Darius II has my absolute favorite intro sequence of any Darius game in this collection. From the music that goes ramping up to the main theme, to the voice lines calling out the launching sequence:
“Main engine energy level, 20% increase !”
“I always wanted a thing called tuna sashimi”
“3…2…1…”
It all creates an unbelievable sense of excitement!
A very fun piece of trivia is the existence of SAGAIA. It exists to be a compact version of Darius II to be sold on western markets. Then there’s actually 2 versions of it which feel like 2 pieces of the same game. If SAGAIA trimmed certain pieces of the game, then version 2 came to use those trimmed pieces and created another entry. It’s actually quite funny.

DARIUS GAIDEN, THE KING

Darius Gaiden is definitely the reason you will keep playing the arcade collection. Quality in older games under a modern eye is usually a product of nostalgia and design elements that still hold on in today’s gaming landscape. Contrasting with that, Darius Gaiden IS a fantastic game that I wouldn’t hesitate to purchase if it was released today.
For Darius Gaiden, less is more, as this time around the game was played on a single screen arcade cabinet. The game does seem to lack some of the ambient goodies such as the rumble effects, but it makes up for it in gameplay experiences.

TRUE POWER

One aspect that is radically different from its predecessor is the upgrade system. Whereas Darius II simplified the Silver Hawk upgrade system, Darius Gaiden took it back to its original Darius roots. This means that, once again, we have multiple upgrade points. Upgrades take considerably less red power-ups to achieve, which actually makes it possible to upgrade multiple times during the same stage.
Death penalties are lower as well with death only losing you a level of power. Because there are more power levels, it is more forgiving and doesn’t set you completely behind like the previous entries. Perhaps the best of all is that neither arm nor bombs have any penalty whatsoever. What’s more, you don’t even lose your arm or bomb level when losing a credit. I can say with 100% certainty that this game is actually possible to complete within a reasonable number of credits if you die on the later zones.
I would take it one step ahead and say this game has a little of the Contra syndrome. The original Contra is a game that was considered hard, but was significantly easier if you could maintain the spread shot. In the same vein, getting the earliest upgrades makes Darius Gaiden a breeze. A well deserved victory, if you ask me.

YOU’RE MINE NOW!

New to Darius Gaiden is the ability to capture mid bosses. Half-way through a stage, you will encounter a medium sized boss with a purple orb somewhere in its back. If you manage to take down the orb without killing the enemy, it will detach and slowly drift away. If you capture this orb, then the mid boss will fight alongside you until its timer expires. I gotta say that having a huge fish on your side is surprisingly satisfying!
Having a single screen makes the experience much more familiar for shmup enthusiasts. While it does lose some of the charm of the ultra wide field of view, it also rids itself of nuances such as your horizontal movement being low in terms of total horizontal space or the limit on on-screen bullets.
A combination of those factors I mentioned contribute to making Darius Gaiden a much better experience. It’s simple to play and forgiving when you lose. Every stage is unique and makes every new play through a completely different experience, not just in a different-ish way, but rather full blown new content!

A LEGENDARY PACKAGE OF NOSTALGIA

There’s one thing that you might be thinking, and that’s that I might be biased because it is Darius. It is true that I openly admit everywhere that Darius is my favorite. However, in this particular case my work was cut out for me, I don’t need to be biased because this is truly a wonderfully crafted collection that deserves to be on everyone’s Switch.
It contains every possible version of Darius you might have encountered on the arcades and then sprinkled some top notch features that make it stand on a class of its own when it comes to ports. It also helps that the Darius games remain to be as fun as they always have been, even with their caveats. I took 3-4 times more time to play this collection, not because it had a lot of content, but because I loved playing every second of it and wanted to try it all. Wanted to 1CC every version, wanted to traverse every possible stage, wanted to created masterful replays.
The only possible downside I can see to this collection is the price. $44.99 is a very high price compared to other shmups on the market. In terms of features and overall content (because remember, every game has more than an alphabets worth of different zones) it does warrant its price. Although I can see people double guess their decision, with this game being close to the cost of a first party title and significantly higher than other shmups.

TOP 3

My tentative placement for Darius Cozmic Collection Arcade was on the top 3 spots. I really had a hard time deciding where to put it, so I went back and revisited both Ikaruga and Psyvariar Delta. After finishing my Ikaruga play through, I was reminded of the magic that is Ikaruga and how special it is. Psyvariar Delta also reminded me of the buzz system and how the refined gameplay and level ups work towards creating an experience that I can’t quite put into words.
The main defining factor, however, was that I don’t think any of the Darius games in the collection beats the top 2 contenders. The 7 games as an aggregate, are certainly a force to be reckoned with thanks to the superb M2 porting labour. With that being said, I will award it a 3rd spot because the gameplay experience is incredible, but a little held back by the age of the games and the hefty price tag.
Still, Darius will always be #1 in my heart.

THE RANKING SO FAR:

  1. Ikaruga
  2. Psyvariar Delta
  3. Darius Cozmic Collection Arcade
  4. Devil Engine
  5. Rolling Gunner
  6. Blazing Star
  7. Jamestown+
  8. Tengai
  9. Steredenn: Binary Stars
  10. Stardust Galaxy Warriors: Stellar Climax
  11. Sky Force: Reloaded
  12. Strikers 1945
  13. Black Paradox
  14. R-Type Dimensions EX
  15. Sine Mora EX
  16. Shikhondo – Soul Eater
  17. Ghost Blade HD
  18. AngerForce: Reloaded
  19. Aero Fighters 2 (ACA Neogeo)
  20. Q-YO Blaster
  21. Lightening Force: Quest for the darkstar (Sega Ages)
  22. Pawarumi
  23. Red Death
  24. Task Force Kampas
  25. Switch ‘N’ Shoot
  26. Last Resort (ACA Neogeo)
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THE SEARCH FOR THE GREATEST SWITCH SHMUP: EPISODE 28 – Raiden V: Director’s Cut

Before I begin, I just want to remind everyone that all of my reviews can be found at my site: www.azormx.com. I tried to keep it as minimalist as possible, and it doesn't have any add or any other intrusive elements, so the content is king. Do check it out, as reviews are usually live there before I publish them elsewhere. Any way, on to the review!

The shmup genre hasn’t been a mainstream genre in a long time. To be honest, I don’t think it ever was, even during the arcade days. While we certainly don’t have a shortage of shmups, let alone new release, they usually come from smaller teams. Indies have taken it upon themselves to become a guiding light for all of us. Their creations have been nothing short of amazing! However, we don’t really have anything we could call a “AAA” shmup. We do seem to have the next closest thing: Raiden.
Developer: Moss Co.
Platform: Nintendo Switch
Release date: Jul 25, 2019
Price: $29.99
Tate: Unfortunately… no. This really needed to have TATE
Raiden V: Director’s Cut is a vertical shmup set in a fictional but real world. It claims to be the original bullet-hell, and after playing it extensively I gotta say that I agree. Raiden V features some intense air combat, coupled with giant bosses and some jaw-dropping transitions between areas.

THE GREAT INTRO CHECKLIST

Right out of the gate, what caught my attention was the intro. The best way I can put this is that it has everything great about shmups in a short video. It has a great track, it has giant enemies, it has ships and it even has pieces of lore I do not understand! Simply amazing!
Most importantly, it is a very accurate portrayal as to what you should expect from the game. Unlike other shmups, Raiden goes all out in the presentation department, with the story taking a mayor role. Another way I can put this, is that it certainly feels like a considerable effort was placed in every element of the game. Raiden V features a level of polish that very few shmups can claim to have.

WELCOME TO THE CUSTOMIZATION STATION

One of Raiden’s strength is the amount of customization you have available for your ship. At the beginning of the game, you can choose between one of 3 different ships: Azuma, Spirit of Dragon and Moulin Rouge. Each of these ships has different stats in terms of attack, defense and speed. They also have their own sub-shot which is always firing along with your main cannon.
On top of selecting a ship, you can arm yourself with 3 out of 9 different weapons. Those 9 weapons are grouped into 3 categories: Vulcan, Laser and Plasma. You can pick, or rather you must pick 1 for each category. The result is a combat style that is unique to you.
During your play throughs, you will encounter several power-up orbs. These orbs will power up each of your weapons up to 10 times! Each of these orbs can be either red, blue or purple depending on the weapon it powers up. The orbs cycle the colors, with an outer dot indicating a timer until it changes colors. This allows you to control which weapon you want to power up, giving you the flexibility to pick your own style or choose a weapon for the occasion.
The best part is that absolutely no power-ups are lost upon death! This means that you are free to retry to your heart's content and play at your own pace. Raiden won't punish you or set you up for failure with an unrecoverable situation.
I didn’t put too much attention into weapon selection at first. I figured it wouldn’t be too relevant, as I would probably just play the entire game with a single weapon, but the advanced scoring mechanics and the rank system were quick to make me second guess my decision.

ACE PILOT

At the core of Raiden V, there are 2 main systems to be aware of: your rank and your flash level. Both of them measure your combat capabilities, although in different ways. Your flash point gauge is a score multiplier that tracks how fast you defeat your enemies. By defeating enemies as soon as possible after spawning, you can earn higher multipliers to increase your flash gauge. By having quick kills, you can raise it to higher levels to increase your score. Your rank, on the other hand, only concerns itself with how many enemies you’ve defeated.
Your rank doubles as the deciding factor of which path you will be taking. Raiden features branching paths with an A, B, C or S version of each stage. Depending on your total destruction rate, you will either move up or down in rank after a stage. While I do not know the exact numbers, I believe having more than 98% destruction rate will increase your rank, 90 – 98% will keep it as is and <90% should decrease your rank. S rank stages are presumably harder than A/B/C stages, with C being the lowest.
Apart from having a higher score and challenging yourself with the difficulty, the importance of S rank is getting the true ending. In order to truly watch the ending of the game, you need to reach the final stage on S rank using a single credit. You also need to power up your 3 weapons to level 10. Once you meet those conditions, you will be able to challenge the final boss. Alternatively, you could just fulfill the level 10 weapons condition to fight the true final boss.

THE BEST CHEERLEADER

A new addition to Raiden V is the cheer system. By accomplishing certain in-game milestones like a certain number of enemies destroyed, you will get an achievement. These achievements are broadcasted to any players connected to the leaderboards. They can then “cheer” on your achievement to increase your cheer gauge. This goes both ways, as you can also cheer the achievements of your fellow Raiden players.
Once the cheer gauge is full, you can unleash it to clear the screen and gain a drastically stronger sub-shot. Think of it as a devastating bomb, only more devastating and easier to fill. It clears screens and decimates even the bosses.
Perhaps many people won’t think too much of it, but I found it really interesting to know that there’s someone on the other side celebrating my achievements. Likewise, there were times where I left my game on pause to do other stuff, but held on to my controller to provide support for my comrades.

SWIFT DESTRUCTION

Everything I’ve mentioned before plays out in the general strategy of the game. Assuming you want to get the best results, you need to know where to hit and how to hit hard. For the untrained eye, most shmups just look like games where you fire away with complete disregard and hope the enemy dies. This is definitely not the case in Raiden.
In order to succeed, you must be able to find your rhythm and read the stage. Learn the enemy formations and strategize the quickest kills. Be there before the enemy arrives and take them down before they realize what hit them. If you want to face the true final boss, then you must also learn to juggle your weapons and find the moments to upgrade them. Maxing a weapon and then switching is a recipe for disaster, as you don’t want to be on the later stages with a level one weapon and risk your flash level or destruction rate. With so many weapons and ship types, your strategy to succeed will be unique to you!

LORE GALORE

One of the main selling points, at least per the game itself, is the story. Raiden V features an extensive story that is fully voiced and occurs as you play the game. This story elements come as the prologue and epilogue scenes, as well as all the events happening mid stage.
As you fly your way to the levels, characters will be advancing the story by having conversations and narrating the current events. The dialogue is available on one of the gadgets located on the right side of the screen. You can read anything you might have missed and even pause to read the on-screen log of events (up to a certain number of events, as the log scrolls to open way for new text).
As for my opinion of the story, I have absolutely no idea of what happened during the game. I played my fair share of runs, but I found it next to impossible to focus on the dialogue while trying my hardest to survive. The voice acting would have been my saving grace, but I found the sound mixing to be the opposite of ideal for listening to dialogue. I even tried lowering the sound effects and BGM to see if I could focus on dialogue to no avail.
The text is also incredibly small when playing on docked mode. It gets even worse when playing handheld.

THE WORST CHEERLEADER

Out of all the voices, Eshiria’s was the one who got on my nerves the most at the beginning. Other than having her role as navigator on the plot, she also critiques your gameplay. In-between stage scenes, she will provide commentary describing your gameplay. She will be quick to point out if you did well, but also if you did poorly. On my early runs, when I was still learning, it would tilt me to listen to her complaining to me about stats I did not understand.
And perhaps, a huge part of my problems was a lack of understanding of the game mechanics. I listened to her complain about my destruction rate without knowing it was about my rank. She also complained about destruction speed without me knowing it was about the flash point.
The problem is that the game never bothered explaining any of its mechanics to me. I really looked around for some sort of tutorial to no avail. I had to resort to 3rd party resources. While that isn’t uncommon, I really don’t like games with obscure mechanics that can’t be discerned in-game.
Once I got better and consistently reach the S levels, I finally started to value her advice. Of course, I wouldn’t count on everyone reaching the same enlightenment as I did. In my opinion, her comments would more often than not add insult to injury. Once again, it’s not really the commentary, it’s the fact that none of what she said made practical sense until I started digging on the wiki.

GADGETS AND THE SCREEN REAL ESTATE

Perhaps the worst omission from Raiden V is the lack of a TATE mode. Vertical shooters don’t really have an excuse to do this, with the existence of add-ons like the flip grip or rotating monitors. Instead, Raiden decided to make the most out of the free space and add several gadgets.
In standard fashion, these gadgets will keep your stats like score, flash level, the dialogue and even hi-score statistics. Your left gadget can even be cycled between the score chart and cheer notification, in-game tips and global statistics. Out of those, the tips are definitely the winners. They do give some important advice, such as staying on top of the guns of the first boss to avoid damage.

NOT A FRIENDLY NEIGHBORHOOD

Every stage is divided into smaller scenes. These scenes serve as a way to catch your breath and tally your score. There’s even a nifty “restart scene” option that allows you to replay a scene. Choosing to restart will deny you the option to upload your score to the leaderboard, but serves as a great way to practice or even “fix” a run to so can get to the true ending.
Every once in a while, the action will pan out and open the way to a bigger stage, with you looking smaller in comparison. I admire the grandioseness of the resulting scenes, but they were also quite impractical. Think about your weapons, the destruction rate and the flash gauge. An extended stage means longer travel distances from side to side. Having a bigger stage means you move slower, which reduces the pacing of the game to a crawl. Reaching enemies quickly becomes a struggle. Worst yet, I’ve counted times where it took me whopping 5 seconds to go from side to side of the stage.

THE OG BULLET HELL

Despite all the fun of blasting enemies quickly to gain flash levels, I gotta say that I found the combat, specifically the bullets, to be lacking in grace. For a game that’s the original bullet hell, most enemy volleys feel like bullet showers. There’s no finesse in them, just a bunch of bullets moving towards you. Dodging them isn’t fun, it’s survival. The problem only gets worse in higher difficulties where the bullets just go faster.
Not all patterns are as bad though. While the vast majority will be just a bunch on increasingly faster bullets thrown at you, some exceptional patterns will show from time to time. As a result, fights tend to be very hit or miss, with both hits and misses being on their respective extremes.
What certainly doesn’t help is that the bullets are very hard to see. As pretty as the backgrounds might be, they are very busy and the quick motion makes them into a blur. Bullets don’t have their characteristic outlines or color palettes to become distinguishable. Some even blend with your own vulcan. The result is a lot of cheap kills caused by intentional obfuscation. It this was their intention, then perhaps I’m being too harsh, but you know visibility is usually one of my pet peeves in shmups.

REPLAYABILITY AND LONGEVITY

As far as game length goes, I consider Raiden V to be one of the longer ones. I was surprised after my first run of the game, as it took me 50+ minutes to complete the campaign. Usually, my baseline for shmups is around half an hour, which made this one almost twice as long. While I’m not fond of longer campaigns, I know a lot of people would certainly be glad to know there is plenty of content.
Of course, playing through the campaign isn’t enough to view the entire game. If you recall, most stages have 4 versions of themselves. Those versions are separated by the ranks: S/A/B/C. This means you would need at least 4 runs to see everything the game has to offer. There’s also 6 different endings to uncover.
Also new to the Director’s Cut edition are 2 bonus levels. These level are slightly different from your typical levels. The bonus missions will challenge you to fight a new boss ir oder to obtain medals. Dealing damage will detach the medals from the boss, allowing you to catch them. Gather enough medals and you will advance to the next phase. Higher medals mean higher ranking. Taking damage will take medals away from you, so surviving continues to be a priority.
Lastly, there is a new boss mission mode that allow you to play “boss rush” missions. These missions have certain conditions, like using a specific weapon or fighting at a specific HP level. The targets are usually 1-3 bosses. Boss mission is a very fun arcadey mode for those who enjoyed the boss fights and want more of them.

SOUND EXCELLENCE

If there’s a factor that merits my highest praise is the sound department. Simply put, the OST is fantastic. The track length syncs perfectly with the stages, and it always fits the mood. I just couldn’t get enough of the OST, and listening to it while writing this review was the recipe for a perfect Sunday! I also got some good coffee that would make the captain proud.
For all the praise the music gets from me, it still is dragged down by the terrible sound mixing. Similarly to the voice acting, I tried to mess with the sound settings to increase the volume and reduce the sound effects, but it still wasn’t enough. The tracks were great but I struggled to listen to them amidst all the explosions. The calm moments were great, as they let me listen to the songs in peace.

LAST WORDS

Raiden is a master class in shmup design for the wrong reasons. Its high points perfectly illustrate how shmups should look and feel. The low points also show what you should NOT do when creating a shmup game. Despite all of this, it all comes down to how fun a game is.
Raiden V is a very fun game. It isn’t different, but it’s certainly very polished. I delivers some levels of quality that are notably absent in the majority of the games. As a concept, I feel like it serves as an example of how current gen shmups should be. The execution fell flat in some regards, but as a whole I was satisfied with the time I spent with the game. It does come with a hefty price tag, so my advice is to check this game out when you find a decent sale. I got mine at -70%.

THE RANKING SO FAR:

  1. Ikaruga
  2. Psyvariar Delta
  3. Darius Cozmic Collection Arcade
  4. Devil Engine
  5. Rolling Gunner
  6. Blazing Star
  7. Jamestown+
  8. Raiden V: Director’s Cut
  9. Darius Cozmic Collection Console
  10. Tengai
  11. Steredenn: Binary Stars
  12. Stardust Galaxy Warriors: Stellar Climax
  13. Sky Force: Reloaded
  14. Strikers 1945
  15. Black Paradox
  16. R-Type Dimensions EX
  17. Sine Mora EX
  18. Shikhondo – Soul Eater
  19. Ghost Blade HD
  20. AngerForce: Reloaded
  21. Aero Fighters 2 (ACA Neogeo)
  22. Q-YO Blaster
  23. Lightening Force: Quest for the darkstar (Sega Ages)
  24. Pawarumi
  25. Red Death
  26. Task Force Kampas
  27. Switch ‘N’ Shoot
  28. Last Resort (ACA Neogeo)
submitted by AzorMX to u/AzorMX [link] [comments]

MAME 0.222

MAME 0.222

MAME 0.222, the product of our May/June development cycle, is ready today, and it’s a very exciting release. There are lots of bug fixes, including some long-standing issues with classics like Bosconian and Gaplus, and missing pan/zoom effects in games on Seta hardware. Two more Nintendo LCD games are supported: the Panorama Screen version of Popeye, and the two-player Donkey Kong 3 Micro Vs. System. New versions of supported games include a review copy of DonPachi that allows the game to be paused for photography, and a version of the adult Qix game Gals Panic for the Taiwanese market.
Other advancements on the arcade side include audio circuitry emulation for 280-ZZZAP, and protection microcontroller emulation for Kick and Run and Captain Silver.
The GRiD Compass series were possibly the first rugged computers in the clamshell form factor, possibly best known for their use on NASA space shuttle missions in the 1980s. The initial model, the Compass 1101, is now usable in MAME. There are lots of improvements to the Tandy Color Computer drivers in this release, with better cartridge support being a theme. Acorn BBC series drivers now support Solidisk file system ROMs. Writing to IMD floppy images (popular for CP/M computers) is now supported, and a critical bug affecting writes to HFE disk images has been fixed. Software list additions include a collection of CDs for the SGI MIPS workstations.
There are several updates to Apple II emulation this month, including support for several accelerators, a new IWM floppy controller core, and support for using two memory cards simultaneously on the CFFA2. As usual, we’ve added the latest original software dumps and clean cracks to the software lists, including lots of educational titles.
Finally, the memory system has been optimised, yielding performance improvements in all emulated systems, you no longer need to avoid non-ASCII characters in paths when using the chdman tool, and jedutil supports more devices.
There were too many HyperScan RFID cards added to the software list to itemise them all here. You can read about all the updates in the whatsnew.txt file, or get the source and 64-bit Windows binary packages from the download page.

MAME Testers Bugs Fixed

New working machines

New working clones

Machines promoted to working

Clones promoted to working

New machines marked as NOT_WORKING

New clones marked as NOT_WORKING

New working software list additions

Software list items promoted to working

New NOT_WORKING software list additions

submitted by cuavas to emulation [link] [comments]

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