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Saturday, December 26, 2015

Weekend Portfolio Analysis (December 26, 2015)

Just a few days ago, market pundits were theorizing about the end of the human species.

IT IS ALWAYS THE SAME THING.

Fear is exaggerated and the "there is more to come" BS from our beloved Gurus was, is and will always be endless. Little by little they start changing their stance as the market rebounds, hoping no one remembers how bearish they were just a few days ago.

The markets do have a certain relationship with the real economy. But, day to day fluctuations are noisy and anyone's guess. It is so hard to not be influenced by other people's bias and fears. That's why unplugging is the best thing you can do if you still lack confidence in your trading mechanics and psychology as a trader.

We have now rallied 2.5% in the last 4 sessions. Only 20 more sessions like that and the SPX will be above 2,300. Woohhoooooo. How cool would that be?

Friday, December 25, 2015

Apr29 SPX unbalanced Iron Condor

A new position was entered using Apr29 options:

Wednesday, December 23, 2015

Options Trading Monthly Digest (December 2015)

Well, the time has come once again to go over the Options Trading performance for the cycle that just concluded: the December 2015 monthly options expiration cycle.

The goal of these articles is to recap and determine what went wrong, what went well, mistakes that were made, things that could have been done better. These articles are intended to make us better traders with constant feedback from our own recent actions and the community of like-minded readers that contribute to this site.

Saturday, December 19, 2015

Weekend Portfolio Analysis (December 19, 2015)

The SPX index opened the week at 2,013.37 and closed at 2,005.55. That's a minuscule 0.39% loss and yet sentiment has turned extremely negative in the last couple of days. We are finally past the first Fed Interest Rate hike. No more drama. Thank Allah.

Yesterday was December expiration and both the RUT 1010/1015 Credit Put spread and the SPX 1880/1885/2190/2195 Iron Condor expired for max profit. The performance for the December expiration cycle was +1.74% before commissions, +1.29% after. For the year, the account is up +11.80% vs -2.59% for the S&P 500. I'll talk more about these numbers and the trading activity in the Options Trading - Monthly Digest article on Tuesday.

Tuesday, December 15, 2015

Saturday, December 12, 2015

Weekend Portfolio Analysis (December 12, 2015)

Well, at least we can't complain about boredom nowadays.  The S&P 500 went down to 2012 this week and it entered extreme pessimistic territory. We have the Fed meeting on Wednesday as the "event of the year". Therefore, we will have to be a little vigilant that day just in case our positions need to be taken care of.

Friday, December 11, 2015

IWM Synthetic Stock Hedged 112/112/120

In the middle of today's chess game, I entered the following position:

Hedging downside risk

A few plays this morning:

Wednesday, December 9, 2015

January RUT Credit Put Spread

Today I entered the second position for the January 2016 expiration cycle:

Tuesday, December 8, 2015

Core Income Butterfly - a Review

While I have shared and discussed a bunch of free useful tools and websites in the past, I rarely ever write about  premium products out there. In fact, in more than 540 articles that have been published on this site over more than 5 years, only 3 of them, or 0.5% of the total, have recommended premium services/products from third parties.

Saturday, December 5, 2015

Weekend Portfolio Analysis (December 5, 2015)

Writing today from the Universal Studios in Orlando, Florida, after a super quiet week where the market went up only 0.035%. I mean, the SPX index barely moved. Did it?

Tuesday, December 1, 2015

Perspectives

This is not a technical article about trading. Rather it is a story to reflect about our finances and goals. It is about perspectives in life. The story is by an anonymous author and it is out there in several places on the Internet, but it contains such a powerful message that I just wanted to have it here on the site for those who have never stumbled upon it.

Saturday, November 28, 2015

Weekend Portfolio Analysis (November 28, 2015)

I had the enormous pleasure of not opening my trading platform at all during the entire week. Once or twice a day I would visit finviz.com/futures.ashx directly from my phone to see how the markets were moving and that would be enough. The markets barely moved at all so I spent the week focused on my Software Engineering gig, which was insane with a code release due this weekend. Yes, despite the immense and unstoppable cash flow generated by this site; despite the hefty fees you pay in order to have access to these articles; despite my efforts replying to emails and providing high quality sexual counseling to traders and investors; it is the IT job the one that pays the bills for your pal LT. So, I have to really optimize my time. Sometimes I wish the days had 28 or 30 hours instead of 24. Not opening my trading platform this week saved me a lot of time, and I don't remember the last time I spent so many days in a row without doing it.

Tuesday, November 24, 2015

Options Trading - Monthly Digest (November 2015)

Well, the time has come once again to go over my Options Trading performance for the cycle that just concluded: the November 2015 monthly options expiration cycle.

The goal of these articles is to recap and determine what went wrong, what went well, mistakes that were made, things that could have been done better. These articles are intended to make us better traders with constant feedback from our own recent actions and the community of like-minded readers that contribute to this site.

Sunday, November 22, 2015

Weekend Portfolio Analysis (November 22, 2015)

As it turns out, "the prospects of a rate increase" is now "good" for the markets as it signals "confidence" from the Federal Reserve. It's funny how the same "prospect of a rate hike" has been being used for more than a year as the excuse for markets weakness as investors have "grown concerned" over a rate hike possibility. See the irony? The same rate increase has been used to support a negative case and its exact opposite. Clearly, this cannot be.

Friday, November 20, 2015

January 2016 SPX Unbalanced Iron Condor

After purchasing long-term anti-crash protection yesterday, today I initiated the first position of the January 2016 expiration cycle:


Thursday, November 19, 2015

Long March 2016 SPY Puts

Today I initiated the first position of 2016:

Buy 6 SPY 161 March Put @0.80
Debit: $480

Wait a minute? Isn't this a site about option premium selling? What the hell is this long Put so far out? This LT guy just wants to throw money in the air. He's burning his dead presidents just like that.

Monday, November 16, 2015

Democracy

"I will tell you what democracy is: democracy is the worst. Endless talking and the listening to every stupid opinion and everybody’s vote counts, no matter how crippled, or black or female they are."

- Admiral General Aladeen (The Dictator, 2012)

Saturday, November 14, 2015

Weekend Portfolio Analysis (November 14, 2015)

From the beginning of the year, until the end of the July options expiration cycle I played only 8 positions....and it was wonderful. Having so little capital committed, such low risks, so much simplicity when you are only paying attention to that one thing. In the first seven months of the year I only played one position per month except in March where I traded two positions.

Wednesday, November 11, 2015

It never rains but it pours

They were going through a painful divorce. The kind of experience that puts your entire life into perspective. The type of pain that an Iron Condor loss can never get close to. He would spend endless hours thinking,....overthinking. What a mystery love is. It just,...it can just vanish one day. Just like that. And just like that the trader would spend hours upon hours overthinking a situation whose solution was nowhere to be found.

Sunday, November 8, 2015

Weekend Portfolio Analysis (November 8, 2015)

Today is the day. I'm 33 years old,...sigh, one year closer to death. I'm not sure what the excitement is about a birth anniversary, but people tend to give importance to this 24 hour interval. Naturally there's some sort of party or surprise thing going on and I have been asked, ordered in fact, to be totally free by 2PM. So, I must hurry up with this article today. Apologies if it ends up shorter than usual.

Friday, November 6, 2015

Cataclysm

The November expiration cycle has been a challenging one to trade as an Options seller. It looks like the performance this cycle will be around -2% for the model portfolio, leaving the Year To Date return around +10% with one cycle left in the year to improve that number. Yes, a 2% account loss for the month sucks but, as a credit spreads trader you learn to take it any day. This is really the key to long term survival.

Tuesday, November 3, 2015

Why I stopped tracking my Forex results with MyFxBook

I've always praised MyFxBook as a great attempt to bring transparency to the retail Forex trading world. I have been using MyFxBook to automatically track the results of my LT Trend Sniper Forex robot until today. A couple of issues with MyFxBook have made me reconsider and I will not be using the platform to track the LT Trend Sniper results going forward.

Sunday, November 1, 2015

Weekend Portfolio Analysis (November 1, 2015)

I thought I wouldn't have time to write a weekend article but suddenly a window of opportunity has been revealed. Thanks by the way for leaving your vote on the Model Portfolio size dilemma. Like I said "the more the merrier", so if you haven't, help me make the content of this site better by leaving your vote here.

Thursday, October 29, 2015

The Crossroad

 
I started writing on this site more than five years ago, back when us humans were more innocent and believed in trading gurus that promised the moon without revealing long term, honest and transparent track records.

Wednesday, October 28, 2015

December Iron Condor adjustment

Today I adjusted the unbalanced SPX 1790/1795/2135/2140 December Iron Condor as the market keeps defying gravity. If you click on the link you can see had originally received $220 for this unbalanced Iron Condor (adjusted to the model portfolio size).

Tuesday, October 27, 2015

The Trader's Wife

I may become part trader + part sexual counselor after all. It may be my final mission in life.
Hank is having marital problems:

Saturday, October 24, 2015

Weekend Portfolio Analysis (October 24, 2015)

If the first half of the year was a paradise for out of the money options sellers, this second half has proven to be a real nightmare.

Friday, October 23, 2015

Fighting a monstrous rally

More than losing money trading, I hate having to write an article with three hundred different trades. That's just confusing and messes up everybody. It discourages reading this site.

I like to keep things simple and very easy to understand because, in the end, my trades are not the center of the universe for you to be dedicating even an hour to them. It is enough of an honor that you spend some of your time coming to this site.

Thursday, October 22, 2015

Closed December RUT Credit Call Spread

I closed the RUT 1235/1240 Credit Call spread today for 0.15 debit.
This trade had originally been entered on October 8 for 0.53 credit. The profit is 0.38 in 13 days or $76 for the model Portfolio.

December SPX unbalanced Iron Condor

Yesterday I played the first position of the December 2015 expiration cycle. This may be the last trade with 2015 options. Here's my tweet:

Tuesday, October 20, 2015

Options Trading - Monthly Digest (October 2015)

Well, the time has come to go over my Options Trading performance for the cycle that just concluded: the October 2015 monthly option expiration cycle.

The goal of these articles is to recap and determine what went wrong, what went well, mistakes that were made, things that could have been done better, etc. These articles are intended to make us better traders with constant feedback from our own recent actions and the community of like-minded readers that contribute to this site.

Saturday, October 17, 2015

Weekend Portfolio Analysis (October 17, 2015)

The SPX index opened the week at 2015.65 and closed at 2033.11 for a 0.87% gain. It was a very quiet one for me where I didn't trade and I simply saw my two remaining October positions expire for max profit. I had an early loss with October options as I had sold an Iron Condor position back in August right before the crash, the worst moment to enter a Delta Neutral and Vega negative trade. However, with the adjustment made and an additional RUT play I ended up the cycle in positive territory. All the details of my trading activity in this cycle can be found here.

The Year To Date performance for the model portfolio is now +12.43% vs -1.25% for the S&P500. Two more months to go. I'll see if I can achieve that elusive 20% growth this year. Seems pretty challenging. Only time will tell.

Wednesday, October 14, 2015

Setting up an alert based on the Delta of an Option

I usually set up my alerts based on price levels, not greek values. For example, if I have a Credit Call spread at 2100/2105 I may instruct my trading platform to send me an alert when the SPX index moves past 2070 . I want to be alerted early about the potential problem and I have grown accustomed to setting up alerts based on price levels due to its simplicity. In the LTOptions system, a simple, yet accurate technique is detailed that allows you to predict at which price of the index, my option contract will reach X probability of expiring in the money, and that is what I always use. I don't really look at deltas. Probability of Expiring In the Money is a similar statistic but they are not the same thing.

Sunday, October 11, 2015

Weekend Portfolio Analysis (October 11, 2015)

Hello fellow traders,

Today I'm writing to you from sunny and colorful West Palm Beach, Florida on a quick weekend trip to enjoy the beautiful things in life.

(Do not click on image to enlarge, it might be dangerous for you psyche)

Friday, October 9, 2015

November 2015, RUT Credit Call Spread

Yesterday I started a new position seeing a market going up too far too soon according to my system. It's not that the market can't keep going up. With less than 40% of stocks trading below their 200 Day Average it is obvious that there is plenty of upside room in the long run, but in the shorter term, which is all I care about, the market is overly optimistic at this point and should take a pause at least.

Thursday, October 8, 2015

Reassurance

"The markets have been insane lately. Do you have strong faith that the lazy trader option selling strategies will continue to generate steady and stable reasonable 1%-4% returns a month? No intend to doubt you, just want some reassurance. Can you provide it?" - Karl

Monday, October 5, 2015

Short Put vs Buy and Hold

A while ago I discussed a simple strategy that beats most traders which consists of simply being long SPY to obtain market-like returns plus dividends. If 90 - 95% of traders lose money, then following an index with a positive return guarantees you beat a huge % of that population. If 75% to 90% of "professional" money managers fail to beat the S&P500, then you are also guaranteeing better results than most "professionals". So, overall you are being extremely lazy, keeping trading costs to a minimum, as well as tax liabilities. You are paying very little attention to the markets and still, beating the vast majority of participants while nicely growing your nest egg.

I also argued that perhaps selling out of the money Calls, in addition to holding the index, was even better but I was not sure until I saw the evidence: BXM, an index that simulates a permanent Covered Call strategy on the S&P500 and has beaten the market in almost three decades. I discussed BXM in the Covered Call vs Buy and Hold article.


Well, today I want to talk about another very simple strategy that beats most traders/investors: 
Short Puts on the index, the CBOE PutWrite Index (PUT)

Saturday, October 3, 2015

Weekend Portfolio Analysis (October 3, 2015)

Friday was a phenomenal day. The S&P moved up +3% measured from the low of the day. At that rate the index will more than double in just the next 24 trading sessions. Do you think that will happen?

So, what follows after this?
Obviously a horde of "analysts" turning bullish little by little, hoping everyone forgets they were bearish just a week ago. Same story over and over again in this joke of an industry folks. Nothing new. Respect price action, and if the entire world expects something, then do the opposite. It usually works. Be aware that it is uncomfortable as hell though. Trading well hurts.

So anyways, Mr. Market now down 5.22% for the year and legions of investors using their underwear backwards across the globe.

Thursday, October 1, 2015

The Markets and my Empty Fridge

I spent less than 10 minutes in total looking at the markets this past week. No, seriously. It is possible.

Knowing that your positions are so far out and having the piece of mind provided by correctly set up price alarms (sound, email, sms) is the recipe that allows me to detach myself from the markets and be productive in other areas of my life.

Tuesday, September 29, 2015

October 2015, RUT Credit Put spread

Today I added a new position to the October expiration cycle during the afternoon session as the market reached a short term pessimistic extreme.

Saturday, September 26, 2015

Weekend Portfolio Analysis (September 26, 2015)

I spent very little time this week looking at the markets. Safe positions far out and nicely set up price alerts allowed me to focus and be productive in other areas of my life. When this happens I usually lose a bunch of followers and the number of visits to this blog is drastically reduced. I made no trades and all is looking good in Lazy Trading Land.

Saturday, September 19, 2015

Weekend Portfolio Analysis (September 19, 2015)

Well, September expiration is in the books and I saw the following positions expire for max profit:

RUT 1330/1340 Credit Call spread
RUT 900/910 Credit Put spread
SPX 1650/1675 Credit Put spread

This would have resulted in a 5.75% draw-down for the month, but I had an additional little loser:

SPY long 147 Put.

This long Put idea was an insurance play, bought just in case the market kept crashing. A small price to pay for piece of mind in the middle of the debacle.

Friday, September 18, 2015

November 2015 SPX Iron Condor

Today I went back to playing offense, something which I hadn't had a chance to do since the little crash in late August.
This is the first trade of the November monthly options expiration cycle.

Wednesday, September 16, 2015

Figured out

Andrew is close to retirement, and has it all figured out.

"I'm a passive investor with what I'd consider a well-managed margin account that will allow me to retire comfortably at 65 with no other deposits into it."

Sunday, September 13, 2015

Weekend Portfolio Analysis (September 13, 2015)

The markets went up 1.75% this week in the face of universal bearishness. By the way this is the second article I'm writing today, I suggest you read The daily fluctuations of your easily influenced mood which initially was intended to be my starting commentary on the Weekend Portfolio Analysis but it turned out to be too long so I published it as an independent piece.

It was a pretty hectic week for me with a work deadline in a few hours and some heavy tasks that took a while. I had to put 8 solid hours yesterday as I watched my beloved Blue Jays completely demoralized the New York Yankees. It's only today that I have time to write on the site, and quite a start for the day it has been with ideas flowing easily. I thought my brain would be burned out. But nop. Here I am.

The daily fluctuations of your easily influenced mood

The entire world was bearish, and of course the markets went up from 1927.30 to 1961.05 this past week for a solid +1.75% gain. This is why the untrained trader does a disservice to himself by being constantly connected to financial media outlets: CNBC, MarketWatch, Bloomberg, The WallStreet Journal, BNN, Twitter.... In most cases, the unexperienced person ends up a victim of his surroundings and the prevalent opinion of the majority around. If you follow 200 people on Twitter, and 90% are being cataclysmic and seeing the end of the universe right around the corner, you will have a tendency to be bearish and scared as well. Quite possibly making trading decisions based on that bias that you didn't even have to begin with. It was just inoculated in you as a result of your own decision to be influenced by what others are thinking, by actively going out there looking for that which you didn't really need.

Saturday, September 5, 2015

Weekend Portfolio Analysis (September 5, 2015)



♪♪ New York, concrete jungle where dreams are made of
There's nothin' you can't do
Now you're in New York
These streets will make you feel brand new
The lights will inspire you
Let's hear it for New York, New York,
New York ♪♪♪

Today I'm writing to you from the historic, majestic and ultra-expensive New York City. As for using a piece of that song here (Copyright material), don't worry. It'll all be OK. The unstoppable cash flow provided by this site allows me to buy the rights for that song or any other for that matter.

Sunday, August 30, 2015

Weekend Portfolio Analysis (August 30, 2015)

We started crashing on Monday only to end higher on Friday. You know, just how we all predicted. SPX opened the week at 1965.15 and closed it at 1988.87 for a +1.21% gain. The index is now down 3.40% for the year but it was below -8% for the year at one point.

This event caused some serious losses to Option Premium sellers around the world, in many cases severely damaging accounts beyond the recovery point. It also put some snake oil salesmen with total disregard for risk management (trading newsletters) out of businesses. As a result the world is a better place now for our children. Thanks Allah.

Tuesday, August 25, 2015

The Bear Lives On - Bought cheap Protection

Today I bought an out of the money SPY Put as protection insurance upon seeing the market close at the lows of the day, which doesn't bode well for the near future.


Monday, August 24, 2015

Adjusting Credit Put spreads on a Panic day (August 24, 2015)

That was my tweet today at exactly 9.30am New York time. The infamous Opening Bell.

Friday, August 21, 2015

Defending positions

Lots of blood on the Street today.

Ok, in order to not be extra annoying I'll be concise. Lately, it looks like I have become one of those daily bloggers who doesn't have a life outside of blogging. God save me.

Thursday, August 20, 2015

RUT unbalanced Iron Condor adjustment

Today I had to defend the Put side of the September RUT 1120/1130/1330/1340 unbalanced Iron Condor as the RUT index fell by 2.53%. Boy what a difference a day makes.


Tuesday, August 18, 2015

October 2015 SPX unbalanced Iron Condor

Today I started trading the October 2015 monthly options expiration cycle:

I have to say it was a tough fill that took me about an hour. Getting filled on the whole position at once was impossible for me so I had to end up entering separate spreads. When I did this the fills were pretty easy.

Sunday, August 16, 2015

Weekend Portfolio Analysis (August 16, 2015)

The last time I made a play this year was on July 27, exactly twenty days ago. Far from my personal record of thirty five but a clear proof that I am not willing to mortgage my derrière off in this market. My periods of extended inactivity in the past have always aligned with good performance. Naturally I've come to love them and to some extent I crave them, I pursue them.

Last year my portfolio was up +17.88% by the end of September, easily on my way to glory in the middle of a cataclysmic year for options sellers of the world. Then a series of absurd plays followed which made me look like I was on my period. It's not going to happen this year. By the time the curtains close this upcoming Friday the portfolio will be up almost 20% for the year. Protecting the good work done so far will become top priority and I will be that much more selective with my plays the rest of the way. The market has been trading on a very tight range since early February and eventually an explosion to one side will take place. There will be some casualties. Let's not be one of them.

Sunday, August 9, 2015

Weekend Portfolio Analysis (August 9, 2015)

Doing nothing sometimes is really fun. Seriously. I love seeing the markets move in one direction, people and gurus going crazy with their recency bias while the conservative and lazy options seller waits it all out with solid positions that only need protection during extreme moves. Doing nothing is fun because it means you are "making it". It means you are doing good. It means you are trading well. You don't need to be constantly trading in order to feel that you are doing "all the effort in your hands" to grow your money. A couple positions at a time can bring some serious dough in the long run and the best part is, it can make it all low stress, not to mention "commissions effective".

Sunday, August 2, 2015

Weekend Portfolio Analysis (August 2, 2015)

The SPX went up this week from 2078.19 to 2103.84 for a 1.23% gain. It was an active week for me where I took advantage of some extreme pessimism on Monday to sell an SPX Credit Put spread and just two days later I was closing the Put side of a RUT Iron Condor. The market is now looking more in no man's land than ever and it is a pleasure to say that the positions in the portfolio feel really comfortable at this point.

Friday, July 31, 2015

All traders go to heaven

Louis lost more than 30 grand last year trading options. That's a lot of dead presidents right there. Sadly, Louis reads to much MarketWatch and Bloomberg, and stays on Twitter for too long. Sadly, Louis has also read this site and because of that he is considering to continue trading. God save his soul.

"I am a newbie trader, transitioning from a full time job to trading options. I lost over $30K trading last year and desperately need to turn around my anxious and stressful life. I cannot go on waking up in the middle of the night with my heart wanting to explode. My health is deteriorating because of concerns about my future. Most traders deal with a lot of trades and I cannot handle that pace anymore. Hopefully I can learn from you and stop being depressed. I wonder if you have any good advice for me. Seems you know what you are doing. Thank you. Be blessed by our Heavenly Father."

Wednesday, July 29, 2015

Closed Put side of RUT unbalanced Iron Condor

Just a couple of days after selling an SPX 1925/1930 Credit Put spread using August options I got rid of an old RUT August 1150/1160 Credit Put spread.


Monday, July 27, 2015

August 2015, second SPX Credit Put spread

Well, a little earlier than anticipated in the weekend analysis, today I sold a Credit Put spread on the SPX index. The reason being: all three indicators that I follow quickly reached extreme pessimism levels at the same time.

Saturday, July 25, 2015

Weekend Portfolio Analysis (July 25, 2015)

A definitely weak market that went from 2126.85 down to 2079.65 is what we got (-2.27%). Year to date the market is now only up +1.01% and looks sick to everybody you talk to. But, this is not a democracy. The markets, if anything are similar to a dictatorship or a totalitarian system. One of the places where the opinion of the majority is useless, and many times just flat out wrong.

I was pretty active during the week first opening the RUT 1120/1130/1330/1340 unbalanced Iron Condor with September options then closing the August SPX 1815/1825 Credit Put spread early to lock in some profits and get ready for possibly opening another Credit Put spread in the near future.

Thursday, July 23, 2015

Wednesday, July 22, 2015

September 2015 RUT unbalanced Iron Condor

Today I entered the first trade of the September monthly options expiration cycle

Saturday, July 18, 2015

Weekend Portfolio Analysis (July 18, 2015)

The S&P500 went from 2080.03 to 2126.64 for a 2.24% gain. Very strong week. I didn't trade, as anticipated in my previous analysis and just kept baby-sitting my positions. July expiration is in the books and the SPX 1935/1940/2220/2225 unbalanced Iron Condor finally expired, improving the performance of the portfolio to +15.90% YTD. Five more months ahead folks. I'm really excited about the rest of the year. I will try my best to close the year up +30% and have my first full year without a draw-down, but we all know things in the markets cannot be forced. I will continue to open my trades and manage them as usual without forcing anything for the sake of an arbitrary number in the end. We'll see how the rest of the year unfolds.

Saturday, July 11, 2015

Weekend Portfolio Analysis (July 11, 2015)

The S&P500 started the week at 2068.76 and closed it at 2076.62 for a small 0.38% gain in the end. On Wednesday I took advantage of the extreme pessimism prevalent everywhere forecasting the end of the Universe and sold an August SPX 1815/1825 Credit Put spread that is looking pretty good now. I never talk about fundamentals just because to me it doesn't make sense to do so, but Greece in this case is old news that the world has been dealing with for 4 years now. Financial institutions have cut their exposure and risk in Greece from the 2011 levels and it is not as catastrophic as the media portrays. China is perhaps more concerning but pessimism is extreme when only 20% of the stocks are trading above their 20 Day moving average and the whole world has bought Puts already to save their butts from the Apocalypse. If the market sell off was going to happen it needed to happen fast and catch people off guard. An elevated VIX allows you to position your strikes comfortably far out of the money providing you with nice cushion for error. It's just good odds.

Wednesday, July 8, 2015

August 2015 SPX Credit Put spread

Today I entered the first position of the August 2015 monthly options expiration cycle:
Sorry I meant the second position:


Saturday, July 4, 2015

Weekend Portfolio Analysis (July 4, 2015)

Hello comrades from all over the world!
Today I'm writing to you from sunny and awesome Orlando, Florida!

We arrived late last night and focused on an intense, passionate game of Monopoly that brought out the worst of us amongst angst, desperation and arrogance. At one point I had so much money I ended up paying another player $5 to have him roll the dice for me (like he was my servant), as I was tired of rolling the dice myself and needed to improve my quality of life.

But this is not Henrik's traveling adventures! This is not about Henrik, the mundane Cuban Monopoly gambler. This site is about trading and the legit joy of seeing your capital consistently grow without the slavery of a 9 to 5 cubicle. So, let's get down to it shall we?!

Wednesday, July 1, 2015

Financial Products that suck - CFDs

Once you have been writing on a site for a while, it won't be long before institutions, brokers, newsletters, etc start bombarding you with partnership proposals for you to promote their products. Over time, I have received dozens of such proposals and in many cases it has been about products I didn't even know existed. Having this market disease I have, most of the time I end up researching these products, just trying to expand my horizons by learning new things.

Saturday, June 27, 2015

Weekend Portfolio Analysis (June 27, 2015)

The SPX Index opened the week at 2112.50 and closed it at 2101.49 for a small 0.52% loss. Year to date, the index, also known as "the market" is up +2.07%, with the first half of the year almost gone. Presumably 90% or so of traders in the world, including professional money managers, are making less than 2% for the year so far. You can count on that.

It was a fun week where I made the first trade of the August expiration cycle: a RUT 1150/1160/1350/1360 unbalanced Iron Condor. For more details about that trade you can read my article here.

Tuesday, June 23, 2015

August 2015 RUT unbalanced Iron Condor

Today I entered the first position of the August 2015 monthly options expiration cycle:

Saturday, June 20, 2015

Weekend Portfolio Analysis (June 20, 2015)

The June 2015 monthly expiration cycle is now in the books. The RUT 1130/1140/1340/1350 unbalanced Iron Condor expired for maximum profit yesterday improving the performance of the overall portfolio to +13.82% year to date. This is a decent return half way through the year and represents +27.64% annualized. It remains to be seen whether I'll be able to repeat this performance on the second half of the year, but I'm confident I can perform decently with all the lessons learned throughout the years and thanks in part to the feedback of many like minded traders and readers of this blog. Meanwhile, the S&P500 Index is up only +2.48% year to date, so needless to say, I'm feeling happy with my trading so far in 2015.

Sunday, June 14, 2015

Weekend Portfolio Analysis (June 14, 2015)

Good morning Lazy Traders of the world. Today I'm writing to you from sunny North Miami Beach, Florida.
It's been a pretty hectic weekend moving from old Hollywood, FL to North Miami Beach and as anticipated it was not possible to deliver the Weekend Portfolio Analysis on Saturday as usual. But now the magic of the Internet is invading my apartment. It is time to stop the marketing nonsense and get down to it.

Sunday, June 7, 2015

Weekend Portfolio Analysis (June 7, 2015)

The SPX index went from 2108.64 down to 2092.83 this week for a 0.75% loss. People have gotten so used to this bull market, that a mundane 2% fall from the recent swing high provokes panics and extreme pessimism in market participants very quickly. The SPX is now up only 1.65% year to date, almost half way through the year. I think it is clear by now, that this is not the super strong 2013 - 2014 market anymore. But, we're still in a long term uptrend, and as long as that continues to be the case, I will be adjusting my trading style accordingly.

Thursday, June 4, 2015

HLHB Forex Trend-Catcher System EA

This is a Forex system created by Huck from BabyPips.com, whose trades she updates every week. As BabyPips has hundreds of thousands of readers from all over the world I thought it would be a good idea to fully automate this system and quickly back test it to see what it gives.

Saturday, May 30, 2015

Weekend Portfolio Analysis (May 30, 2015)

Good morning folks!
Today I'm writing to you from the Southernmost point of continental USA: Key West ladies and gentlemen:

It's a weird sensation when I feel that I'm much closer to Havana than Miami right now. Yes, Cuba is closer to me while writing this piece from my bed. Just 90 miles away whereas Miami is 140 miles from here.

But this is not a site about tourism. This is not TripAdvisor. This is not what you came looking for today. So, let's get down to it.

Saturday, May 23, 2015

Weekend Portfolio Analysis (May 23, 2015)

A pretty boring week for me in the trading arena with the SPX opening the week at 2121.30 and closing it at 2126.06 for a 0.2% gain. Year to date the index is now up 3.26%.

The fact that the S&P closed the week barely unchanged is not the issue, after all it could have done it with huge swings both ways. The issue is that it oscillated between 2120 and 2134 all week. Unbelievable. But, as I have said before: "Embrace boredom". As an options seller, it is not so good to open trades when the markets are boring, right before the storm. You would rather open your positions in tumultuous times. But, once your positions have been established, boredom in the markets is the best thing that can happen to you, so you fully burn all that Theta while you sleep well at night and happily dream about little angels.

Tuesday, May 19, 2015

July 2015 SPX unbalanced Iron Condor

Today I entered the first position of the July 2015 monthly options expiration cycle.

I finally got filled with the 1935/1940/2220/2225 unbalanced Iron Condor. This was after trying my luck with RUT 1110/1120/1330/1340 and not getting filled for more than 30 minutes for the credit that I wanted. Then I went to SPX but trying a more conservative 1920/1925 Put side. In the end I had to split the order in two and enter the Call side and the Put side separately. The fills were really difficult today I must say, especially on the Put side. But, I always remind myself that I have to be patient. Order entry is one of the few things that you can control and if I am going to be doing this only a couple times a month, I better take my time and not rush anything.

Saturday, May 16, 2015

Weekend Portfolio Analysis (May 16, 2015)

May expiration is in the books. The RUT 1100/1110/1330/1340 unbalanced Iron Condor finally expired and the Year to Date return of the portfolio is now +11.63%, which is +27.91% annualized. That's not bad for the little activity and the zero sleepless nights lived this year.

Below is the chart of the S&P500 index. Take a look at the gray rectangle:

(Click on image to enlarge)
That gray rectangle describes the range of boredom in which we have been trapped for three and a half months. Since February 4, until today the SPX has oscillated between 2040 and 2125. An 85 point range or about 4%. But it gets even worse. In the last 40 something days we have been trapped in an even narrower 2% range of tedium.

Sunday, May 10, 2015

An Investment in Canadian National Railway Company - CNR

If we're trying to avoid wild wild west, cow-boy style investing, one of the ways of doing so responsibly is by putting your money for the long run in mature, proven and stable businesses. One of the tenets often mentioned is the company's "moat". "You want to invest in companies with a moat". In other words, you want to invest in companies with a distinctive built-in competitive advantage where the barrier of entry for new competitors is a huge obstacle to overcome.

Railways fall in this category. Building a whole infrastructure across vast regions takes billions of dollars and years of work, so, the established companies, the incumbents, pretty much have guaranteed business for years to come without too much concern about potential new competitors. Goods always need to be transported from manufacturers to consumers and railways are still, to this day, the most cost efficient way for transporting them in large volumes throughout large distances. Better than Planes and Trucks by far.

Saturday, May 9, 2015

Weekend Portfolio Analysis (May 9, 2015)

Oh là là! That's a phrase French speaking people use to express surprise, among other things. Learn how to pronounce it via Youtube. I say Oh là là to this market! Markets are always hard to trade, markets are always in Oh là là mode. How many of you (us?) were expecting a rebound on Thursday and Friday? It's always the same. It's always the same and it will continue to be like that. The fear of the next major market crash is always looming and the inevitable "Recency Bias" impregnated in the herd mentality, the tendency that people have to believe that what has been recently happening will continue to happen. You know like when Gurus on CNBC ALWAYS say "I think there is more to come" both during rallies and market sell offs. That's recency bias.

Wednesday, May 6, 2015

Getting ready to defend. No reason to panic.

With the recent sell off in the RUT index it is a good time to reflect upon our strategy in order to better understand it. Only a solid understanding of its potential and weaknesses will make us feel truly confident in what we are doing.

This is the business of selling options. You know, where you have a lot of winners for a while until "that day happens" when you lose it all. That's what happens to most options sellers and that's why you sometimes cannot avoid that feeling,......the dread,.....the terror,...the what ifs. So, here I am and hopefully with this analysis I can shed some light on how all these positions can be managed conservatively in order to minimize damages and what's more interesting, in order to be able to quantify them way in advance. Knowing the magnitude of your losses in advance kills the panic, because you simply know how bad it can get, unlike the trader who doesn't know what the magnitude of his losses will be by the time his position needs to be adjusted and therefore gets nervous and makes regrettable decisions with his capital.

Saturday, May 2, 2015

Weekend Portfolio Analysis (May 2, 2015)

Phewww, that was an exciting week with nice moves both ways on Thursday and Friday. I took it easy and didn't add new positions to the portfolio as not all the stars were aligned for me, a.k.a my system didn't trigger any trade signals. In the end we went from 2119.29 down to 2108.29 for a  0.52% decline. The index is now up 2.40% for the year.

There was a nice decline on Thursday, especially on the Russell index which some people took advantage of. I was asked by a couple of folks why I wasn't selling Puts that day. Well, basically the market was not at the oversold extreme I look for. If you sold Puts that day, things are working beautifully for you my friend. Congrats. Personally, I didn't want to sell Puts when my system was telling me that I should wait just a little longer and I-don't-regret-it. Some people would rather sell options than have sex and I understand. Selling options is fun, it is addictive, highly addictive (like this mundane blog), but a plan is a plan and I didn't want to be like a deer caught in the headlights later.

Saturday, April 25, 2015

Weekend Portfolio Analysis (April 25, 2015)

This week the SPX index went from 2084.11 to 2117.69 for a 1.61% gain. The market is now up 2.86% year to date. I entered the first position of the June expiration cycle ending a drought of 35 days without entering new trades. It has been a quiet year so far and hopefully it will continue to be so.

Friday, April 24, 2015

June 2015 RUT unbalanced Iron Condor

A few hours ago I entered the first position of the June expiration cycle:

Saturday, April 18, 2015

Weekend Portfolio Analysis (April 18, 2015)

Good morning folks!
It's going to be a busy weekend between finding a place to rent and buying a car. I said to myself, if you don't write that article right now, you may not have a chance. So, here I am, getting it out, squeezing my neurons to the beat of Guns N' Roses in the background while I endlessly hit my keyboard. Let's get started.

April expiration is in the books my friends. It was a quiet cycle for me with only one trade: the SPX 1855/1860/2200/2205 unbalanced Iron Condor. That kid expired for max profit and the performance for the portfolio was +2.05% before commissions, +1.94% net after trading costs. Not spectacular, but decent. Not awesome, just nice. Better than nothing. The portfolio is now up +9.44% year to date. I have only made 5 trades in 2015 and I'm-not-mad-about-that. This is life! I'm on pace to a +28.32% annualized return and only 15 trades for the year. That would be my definition of paradise.

Saturday, April 11, 2015

Weekend Portfolio Analysis (April 11, 2015)

Good morning folks! How's it going? How are the markets treating you?
All is going well over here in LazyTradingLand. The market has been benevolent so far in 2015 without keeping sustained violent moves in the same direction. This is great because if you are conservative you haven't felt its heat yet. I haven't had losing trades this year and I have basically traded stress free. I'm not showing off my awesome abilities. The market has simply behaved in a way that easily accommodates our trading strategy. It will eventually get ugly again, we just don't know exactly when. So, let's enjoy the party, the orgy of capital easily flowing into our accounts.

Saturday, April 4, 2015

Weekend Portfolio Analysis (April 4, 2015)

Good morning folks! Glad to be back after 2 weeks without writing an article on this site. Writing today is part of my going back to normality little by little. This is my first post from Hollywood, Florida and what can I say, I'm loving it here: family, sunshine, blue sky, Latin food, hot girls (not that they don't exist in Toronto, it's just that they are too covered up there). I'll miss Canada, but I'm enjoying every minute down here and absorbing the best it has to offer. Heck, how can I be unhappy about hitting what I'm about to hit in the next couple hours?

(You don't need to "click on image to enlarge" in this case. The awesomeness of this view is evident however you watch it)

Thanks for all the concerns, all the support emails and the good wishes. I really appreciate it...

...but this is not "Henrik's travel blog". This is not "adventures of a Cuban on a random beach". This is the site of the Lazy Trader, where we talk about the most exciting and arguably important subject on planet Earth: trading. So, here we go.

Friday, March 20, 2015

Weekend Portfolio Analysis (March 20, 2015)

Well, as it turns out it was not the end of the world and the markets didn't crash. My SPX 1965/1970 Credit Put spread with March options finally expired successfully with no sweat. A few days ago I talked about how most traders constantly fear a market crash. It's an exaggerated fear when, after all, you should only experience 2 - 3 severe market crashes in your life time, or perhaps less than that in a 20 year long trading career. These traders are the same that, for the most part, are too quick and eagerly sell Calls prematurely, which is a much more dangerous practice. I know the psychological profile because I was like that myself during my initial phases of development as an Options seller.

Thursday, March 19, 2015

May 2015 RUT unbalanced Iron Condor

Today I started to play the first position of the May expiration cycle. This was an unbalanced Iron Condor and I chose to play it with RUT this time.

Trade Details:

BUY 2 RUT May 1100 Put @4.30
SELL 2 RUT May 1110 Put @4.95
SELL 1 RUT May 1330 Call @2.95
BUY 1 RUT May 1340 Call @2.00

Monday, March 16, 2015

Trading Podcasts

The markets get closer and closer to my credit spread's boundary. Temporary losses start to pile up. I enter an order to close my position, ready to defend it with an adjustment later on. My order doesn't get filled. I chase the price of the spread, willing to pay a higher debit, no fill. Markets keep moving against me. Heart bumps faster, losses increase, I start to feel shortness of breath. No fills yet..."AAaaahhhhhhhhhhhh",.....a scream in the middle of the night. I wake up all sweaty and agitated. "Thank God it was just a nightmare!". Man, the markets are taking its toll on my psyche. Now I can't even stop thinking about them while I sleep. What the hell!

Saturday, March 14, 2015

Weekend Portfolio Analysis (March 14, 2015)

All right folks, we went from 2072.25 to 2053.40 for a 0.92% loss and the SPX index is now -0.27% year to date, to the frustration of index investors (they deserve it, they've been kicking our butts in the last couple years). This was a pretty exciting week where we reached a short term oversold extreme. I took advantage of the opportunity and sold an SPX 1970/1965 Credit Put spread with March expiration. I was a little early with my entry and had to endure some pressure the next day when the market fell a little bit more but things are looking great now. The market would have to experience a drastic fall in order to affect my position.

Tuesday, March 10, 2015

tastytrade - an unbiased review

Warning: This post is going to be much larger than usual.

I wrote a review of tastytrade back in April 2013 when I had been watching the show for a few weeks, quite possibly not more than a month. It's only fair to write another one now that the show has evolved and I have had the opportunity to digest much more content and become more familiar with it after two years.

tastytrade has become somewhat controversial. It's like the New York Yankees, with legions of fanatics and tons of haters, but very few people staying neutral. From what I have seen, they have many more lovers than haters, but boy do the haters take it seriously. I want to put the passion aside and be objective on this post in order to write as fair and unbiased a review as possible so that people can make the best out of it without falling into endless unproductive arguments and personal attacks.

March 2015 SPX Credit Put spread

Today I entered an SPX Credit Put spread position during the morning

Saturday, March 7, 2015

Weekend Portfolio Analysis (March 7, 2015)

We started the week at SPX 2105.23 and closed it at 2071.26. The index is now up only 0.60% year to date, which makes most traders in the universe negative for the year. I continue to be pretty passive with my options plays and didn't do anything as anticipated in the previous portfolio analysis.

Saturday, February 28, 2015

Weekend Portfolio Analysis (February 28, 2015)

We opened the week at 2109.83 and closed it at 2104.50. That's a small 0.25% loss and the SPX index is now up 2.21% year to date. With the candles of the last three days, the "close to overbought" condition was relieved and we are now at a more neutral stage, not ideal for my style of Credit spreads selling. The short term overbought extreme was never fully reached, so I didn't get a chance to add new positions during the week. That's fine because it means that my existing ones are looking pretty good now.

Saturday, February 21, 2015

Weekend Portfolio Analysis (February 21, 2015)

Well folks, the February 2015 monthly options expiration cycle is now in the books. It was a pretty quiet one for me with only one trade. The 1875/1880/2190/2195 SPX Iron Condor finally expired yielding max profit and the portfolio growth after commissions was +3.01%. Year to date the portfolio is now up +4.16%. It has been a passive year for me so far, averaging only one trade per month which is well below my usual average of three. But simply put, the market hasn't gone to extremes, which has prevented me from entering more individual credit spreads. Hopefully, with some extreme action in the near future I get better opportunities to add more positions. The key to me though is to not get frustrated or anything if I don't see clear opportunities. Trading cannot be forced. That's something I have learned the hard way over time when I have entered positions at less than ideal times just for the sake of taking in more credit and then I have regretted it. I have learned to be patient, as hard as it is sometimes, and overall I think that has been positive for my trading.

Thursday, February 19, 2015

April 2015 SPX Unbalanced Iron Condor

Today I started to ride the first position of the April 2015 monthly options expiration cycle. This was my tweet live during the morning session.

Tuesday, February 17, 2015

Profitable Forex strategies - a follow up

I have discussed several Forex trading strategies on this blog in the past. Most of the time just exposing trash, scams and over curve-fitted junk, especially during the early life stages of this site. After a while, I realized the amount of garbage was insanely beyond my reach and it didn't make much sense to keep exposing charlatans and endlessly picking fights. I decided to, instead, focus on valuable content showcasing for instance, robust Forex trading strategies with long profitable track records and great likelihood of being profitable in the future under unknown market conditions.

Sunday, February 15, 2015

What is the end goal?

I normally don't discuss details of my personal life on this site and prefer to strictly focus on trading and investing matters. However, out of respect and consideration for my readers, some of which write to me concerned about my life and well-being whenever I miss one weekend article, I feel this post is due as there is going to be a life changing event that will slightly impact this site in the near future.

It's soon going to be 6 years since I began my journey in this country. That was a huge milestone in my life. A lifelong dream come true that ended 26 previous years of frustration in a communist system.

While still in Cuba, my "end goal" was to simply get the hell out. It was not to have a lot of money, it was not to become a trader. It was all about being a free man. Cuba's national hero, José Martí, once said that "Liberty is the right of every man to be honest". And it was at times very hard to make a living in Cuba being entirely honest.

Saturday, February 14, 2015

Weekend Portfolio Analysis (February 14, 2015)

The S&P500 opened the week at 2053.47 and closed at 2096.99 for a solid +2.12%. We're now back to the kind of really challenging environment for option sellers of low volatility and Credit Call positions hammering traders' accounts out there. As we have learned in the last two years, this is the type of environment where you have to be specially conservative and selective with your plays. We'll see how we manage to survive over here.

Sunday, February 8, 2015

Weekend Portfolio Analysis (February 8, 2015)

From 1996.67 up to 2055.47 for a 2.94% gain in the week and now the markets are up year to date. Because we didn't reach short term extremes I made no trades and I simply kept riding my February and March Iron Condors.

Saturday, February 7, 2015

Should an Index options seller pay attention to fundamentals?

I received a couple of emails in the week asking what I thought about Greece and the new leadership, the debt talks, the European Union.....and whether I take that information into account in my trading. The answer to the first question is: My opinion, or anyone's opinion is irrelevant. The answer to the second question is: No I do not take, in general, any piece of news into account in my trading.

Playing the news game is very dangerous as you will start to be influenced by other people's biases and that will inevitably influence your trading, possibly leading you to violate your system rules. Trying to gauge the impact of fundamentals in the markets will rarely provide you with any edge at all. In this day and age information is disseminated instantly, you don't know better than the next person. Plus, sometimes the markets fall on good news and rally on apparently bad news.

Sunday, February 1, 2015

Weekend Portfolio Analysis (February 1, 2015)

Man, I'm sleepy. No, seriously, I truly am. Let's see how I manage to write this one.

Back in 2010 when I started this blog, I would have just kept sleeping as the site was barely visited by 2 or 3 readers per day. Things are a bit different today and I know many readers are waiting for the weekend portfolio analysis, which keeps me motivated. So, here it goes.

Saturday, January 24, 2015

Weekend Portfolio Analysis (January 24, 2015)

Pretty quiet week where the market moved up a little bit in just 4 trading days from 2020.76 to 2051.82 for a 1.52% gain. The S&P500 is now almost flat for the year, in fact it was up for the year at one point in yesterday's trading session. It all gets interesting from here as the market moves up and volatility gets killed making the options selling business more challenging. Time will tell if this is a replay of the 2013 & 2014 story, but so far, the long term uptrend channel is still in play.

Yesterday I started playing the March expiration cycle. I entered a March unbalanced Iron Condor on the SPX index. I spent exactly one month without entering trades (Talk about being a lazy trader). I didn't set that level of inactivity as my goal. I was simply playing by my rules. So far I have only traded one position in January, one in February and one in March. Hopefully I get more opportunities in the March expiration cycle to be a little more active and obtain more credits.

Friday, January 23, 2015

March 2015 SPX unbalanced Iron Condor

Today I sold an SPX unbalanced Iron Condor using March options.

Tuesday, January 20, 2015

My interview on the OptionAlpha podcast

Folks, I was invited to the OptionAlpha podcast where I was interviewed by Kirk, whom many of you already know. It was quite an honor as he is one of the traders I always looked up to and because, well, he's been trading since he was born, or so I hear.

We talked about the challenges of trading while having a full time job, we talked about strategies and the specific details in terms of entries, exits, position sizes etc. No hype, no general market useless talk but concrete stuff the way we all like it here at The Lazy Trader. You have the bonus of listening to my beautiful voice and Latin accent for the first time. You just can't miss this opportunity. Check it out!

Monday, January 19, 2015

ETF Rotation Systems to beat the Market - SPY + IWM + EEM + EFA + TLT + TLH + DBC + GLD + ICF + RWX

This is the fifth and last chapter of the ETF Rotation Systems to beat the Market series. If you haven't done so, you may want to read the previous chapters:

- ETF Rotation Systems to beat the Market - American Equities
- ETF Rotation Systems to beat the Market - Global Equities
- ETF Rotation Systems to beat the Market - American Equities + TLT + GLD + IYR + EEM
- ETF Rotation Systems to beat the Market - SPY + EFA + IEF + GLD + ICF

Today we are going to take the concept of diversification a little farther. We will exploit the idea of the fourth chapter materialized in the SPY + EFA + IEF + GLD + ICF portfolio. That is, we will create a portfolio that uses the same asset classes: Equity (US), Equity (International), Bonds, Real Estate and Commodities but this time we will choose two symbols for each category instead of just one.

Saturday, January 17, 2015

Weekend Portfolio Analysis (January 17, 2015)

Yesterday was January expiration and with that I'm officially up for the year. The SPX 1820/1825 Credit Put Spread, as anticipated, expired worthless yielding max profit. This was the only position I played in the January expiration cycle. The return for January after trading costs is +1.12%. There was a point in the cycle where I should have sold the 2150/2155 Credit Call spread, but I was excessively patient waiting for the 2160 level to reach 10 deltas, which never happened. Had I sold the 2150/2155 Credit Call spread we would have been talking about a 2% or 3% growth for the month instead of 1.12%. Anyways, the S&P500 is down 1.9% for the year which means the vast majority of investors in the universe is negative, so I'm fine with my small out performance.

Friday, January 16, 2015

ETF Rotation Systems to beat the Market - SPY + EFA + IEF + GLD + ICF

Welcome to the fourth chapter of the ETF Rotation Systems to beat the Market series, where we explore different ETF Rotation portfolios and their potential to outperform the markets and do it with less volatility and smaller draw-downs. If you haven't done so, you may want to read the previous chapters:

- ETF Rotation Systems to beat the Market - American Equities
- ETF Rotation Systems to beat the Market - Global Equities
- ETF Rotation Systems to beat the Market - American Equities + TLT + GLD + IYR + EEM

In the previous chapter we started to diversify the portfolio by adding other asset classes into the mix. The American Equities + TLT + GLD + IYR + EEM portfolio delivered some very interesting results in terms of both performance and draw-downs for 12 years of back test. With such encouraging results we inevitable start to wonder, how far can this go?

Tuesday, January 13, 2015

ETF Rotation Systems to beat the Market - American Equities + TLT + GLD + IYR + EEM

Welcome to the third chapter of the ETF Rotation Systems to beat the Market series, where we explore different ETF Rotation portfolios and their potential to outperform the markets and do it with less volatility and smaller draw-downs. If you haven't done so, you may want to read the previous chapters:

- ETF Rotation Systems to beat the Market - American Equities
- ETF Rotation Systems to beat the Market - Global Equities

So far, we've only discussed systems whose instruments belong to one single asset category: Equities. The Global Equities rotation system delivered a solid +17.2% Compound Annual Growth Rate for over a decade. But it was still pretty volatile (17.6% volatility) and its worst draw-down at -22.2% would have had many investors screaming for the exit. That's what happens with equities: the asset class that over time delivers the best returns is also the most volatile one. Although the yearly return of the portfolio was solid, we need to address the volatility on that equity curve and also that worst draw-down value. We'll address that by exploring the benefits of diversifying the portfolio with other components such as Bonds, Real Estate and Precious Metals.

Monday, January 12, 2015

ETF Rotation Systems to beat the Market - Global Equities

This is the second chapter of the ETF Rotation Systems to beat the Market series. If you want to know what this is all about,  you may want to read the Introduction here.

On the previous chapter I showed you a simple ETF Rotation System purely based on American Equities. We saw how it out performed the SPY while being less volatile which are the two main goals of ETF Rotation systems.

However, given the nature of the markets and the constant uncertainty about the future, being invested on a single country for long periods of time poses significant risks. While we know that the US Markets have grown about 7% a year on average for the last century, there is absolutely no guarantee that this will continue to be the case going forward. The risk of being invested in equities of a single geographic area can be clearly exemplified with the case of Japan.

The Nikkei 225 Index made an all time high of 38,957.44 on December 29, 1989.
Today, more than 25 years later, the index is trading at 17,197.73. Yikes!

Saturday, January 10, 2015

Weekend Portfolio Analysis (January 10, 2015)

Pretty exciting week in the markets with violent moves in both directions. In the end the SPX index opened at 2054.44 and closed the week at 2044.81 for a 0.47% loss.

There was a good opportunity on Tuesday to sell Puts, which I couldn't take advantage of while being caught up in meetings all day. My frustration was clear on Twitter. Of course, in retrospective now anybody can say how great an opportunity it was for selling Puts after seeing the rebound, but that's not my point. I mentioned last week the levels at which I would be interested in selling Puts. Definitely with the SPX below 2000 selling Puts in the mid 1700's was a very attractive opportunity. I simply missed it, and after that I wasn't going to be happy trading at inferior strike prices. That's how my mind works. So I said..."The F with it". I'm not trading it unless we fall to similar levels.

Wednesday, January 7, 2015

ETF Rotation Systems to beat the Market - American Equities

Because I'm usually hungry for trading and investing related content, it's unavoidable for me to spend two or three solid hours during the weekends on the web looking to learn something new. Most times, I find way too many things that lack real value or that do not offer real actionable ideas. Long gone are the days when I used to waste my life reading random gurus' opinions and forecasts. There is tons of information on the markets out there. A very small portion of it, is truly worth something. However, from time to time you find that little gem and you're allowed to experience that Eureka moment once again.

One trading technique that has really picked my interest in the last couple of months is ETF Rotation systems. I already knew about them but never paid much attention. It was via fellow blogger/trader Dan from ThetaTrend.com that I became really interested in this concept.

Saturday, January 3, 2015

Weekend Portfolio Analysis (January 3, 2015)

Welcome to the first Weekend Portfolio Analysis of 2015. If this is your first time reading the blog, this is a typical article I write on weekends (usually on Saturdays) where I go over all my current positions and plan my next moves ahead of time for the upcoming week.

This week the SPX index went from 2087.63 down to 2058.20 for a 1.41% loss. As I said on last week's analysis, in this scenario I wouldn't enter new trades, which is exactly what I did. Let's move on to the current market conditions.