LTOptions at a 33% discount during the Year End Holidays.
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Wednesday, April 17, 2019

Rule number one of Enhanced Investing

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When you are short a cash secured Put, because you would like to own the stock at a cheaper price, it often happens that once the stock begins to fall, and continues to do so beyond your strike price, you suddenly feel like “well, I don’t know….now I don’t want to own it so much anymore. Look at all the negativity around the name!”

It-always-happens. Business we were a short time ago convinced we would like owning at cheaper prices are suddenly disliked by analysts and the crowd of individual investors. Our herd mentally then tricks us into fear.

Tuesday, April 16, 2019

June SPX Unbalanced Iron Condor

Trade Details:

4 June SPX 2670/2660 Credit Put spread @0.60 credit each
1 June SPX 3050/3060 Credit Call spread @1.00 credit

Tuesday, April 9, 2019

Enhanced Investing - March 2019 Results

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March brought a $481.07 realized gain for the account after commissions ($25,000 account at Tastyworks, with 2:1 margin). A total of 16 short Puts were closed, all of them at a profit.

So far in the year, we have closed 54 Short Put positions. 53 winners vs 1 loser. The total realized gain made in the year is now +$1,624.31. This represents a +6.5% growth for Q1. If we project that over an entire year, we are on pace to a +26% year, which is not bad. Of course, chances are, not every quarter will be like this one. Still, I’m happy with the results so far, considering that we have experienced no equity exposure at all. All the gains so far are based on short Puts only and no stock position has been entered 

Of course, the market is up much more than 6.5% Year to Date. It is expected that a short Put strategy will make less money in periods of strong market rallies, but then again the current path of the market is not sustainable for an entire year.

Looking at April, it seems the first assignment of the year will finally happen. In this case on CVS. We also have short WBA Puts that are in the money. All other positions (8) look very healthy. April will also mark the beginning of a new earnings season. So, volatility will be elevated for selected names and that may very well result in greater gains in the near future.

If you enjoyed this content, consider acquiring the Enhancing Investing Premium. Where you will learn to properly value companies and adopt strategies that truly minimize your risks while increasing your probabilities of making money. Read more details.
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Saturday, April 6, 2019

LT Trend Sniper system - Q1 2019 Results

Quick review of what the LT Trend Sniper robot did during Q1 of 2019.
But before that, a quick glance at the Barclays Currency Traders Index shows us the benchmark performance year to date is at +0.60%

Monday, April 1, 2019

May RUT Elephant

Trade Details:

4 May RUT 1400/1390 Credit Put spread @0.60 credit each
2 May RUT 1650/1660 Credit Call spread @1.10 credit each

3 May IWM 166 Long Calls @0.24 debit each

Saturday, March 30, 2019

Ethical Investing - The pitfalls

I was recently talking to a friend about investments and the subject of "Ethical" investing came up.
It's the idea of that investor who feels good with himself by not investing in companies whose practices go against his moral/ethical principles.

It sounds interesting....initially. Then you start to realize that depending on how completely "ethical" you want to be, you are quickly limited with your choices. Let's look at a few examples:

Tuesday, March 26, 2019

Comparison of BXM vs PUT indexes

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What is more efficient? Covered Call selling or Cash Secured Put selling? It obviously depends on the stock that is being played, but what we’d like is a “general” answer.

Tuesday, March 19, 2019

Friday, March 15, 2019

May SPX Elephant

Trade Details:

4 May SPX 2600/2590 Credit Put spread @0.65 credit each
2 May SPX 2960/2970 Credit Call spread @1.00 credit each

2 May SPY 297 Long Calls @0.50 debit each

Friday, February 22, 2019

Off the Matrix for a week

Due to the aberration that is the American Health Care system, I’ll be traveling abroad to get some needed medical attention. Yes, even including flight tickets and the cost of a one-week stay in Cuba, it will all be far cheaper and without the permanent fear of unexpected billing surprises.

A sad state of affairs, no doubt, in the richest country on Earth. But it is what it is.

During that week, I won’t have Internet access. So, keep that in mind if you send me an email between February 24 and March 2. I’ll reply to your communications when I’m back.

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Friday, February 15, 2019

April RUT Elephant

Trade Details:

4 Apr RUT 1400/1390 Credit Put spread @0.65 credit each
3 Apr RUT 1675/1685 Credit Call spread @0.95 credit each

3 Apr IWM 165 Long Calls @0.64 debit each

Tuesday, February 12, 2019

Enhanced Investing - January 2019 Results

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During the month of January, we got to close 23 Short Puts successfully for a total gain of $752 ($722.79 net after commissions). This is on a small $25,000 account (2:1 margin) with Tastyworks as the broker. Below is a summary of each position that was closed:

Tuesday, January 29, 2019

Disadvantages of Covered Calls

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Despite the fact that a disciplined covered call strategy can out perform an equity index in the long run and do it with less volatility risks obviously exist as with any strategy.
  • When you sell a Call on a stock that you are holding, you are limiting your upside potential. It gets capped at the short strike price of the Call you sold, so you will not participate in an entire stock rally. However, you are still exposed to downside moves just as a regular shareholder.
  • When you are short Calls, you are also short volatility (Vega). A strong decline in the stock may actually make the Call more expensive or not lose that much value do to the expansion of volatility. Of course, this is irrelevant at expiration date when all that matters is whether the stock is above or below the strike price of the Call option.
  • Because it is an active strategy, profits are taxed at higher rates than say dividends or capital gains. This is something to take into account if you want to avoid active trading taxes. In that cases it is better to apply the strategy in tax sheltered accounts such an IRA.
  • Also, because it is an active strategy you will incur more trading costs than a pure passive Buy&Hold Investor. It is important for this reason to use a broker than charges reasonable commissions of less than $1 per contract and no Order Ticket charge.
All that said, Covered Calls help you mitigate your equity losses and can also provide regular cash flow. Evidence shows that a systematic Covered Call approach on the S&P500, selling the 30 delta Out of the Money Call every month while holding the underlying instrument, beats the index handsomely and with less volatility. Read this article about CBOE’s BXY index.
The disciplined investor will simply have to fight the frustration of missing huge rallies, knowing that for each one of those, there will be dozens of stocks doing nothing, sometimes for years. So, things tend to even out in the end and turn out a little better for the Covered Call seller.

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Tuesday, January 22, 2019

A Short Put Investment on SJM

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Last week I finally closed a Short Put position on JM Smucker Co. (SJM) after a 42-day battle.
On November 30, the company closed at 104.51. My analysis told me that it was slightly undervalued and I decided to sell a January 95 Put for which I obtained a credit of $91. The broker froze a Buying Power of $1,335.65 for me to carry this short position.
After that, the market went to s**t, and SJM was no exception.

Friday, January 18, 2019

March SPX Elephant

Trade Details:

4 Mar SPX 2375/2385 Credit Put spread @0.60 credit each
2 Mar SPX 2830/2840 Credit Call spread @1.00 credit each

2 Mar SPY 284 Long Calls @0.56 debit each

Wednesday, January 16, 2019

Out of the Money Covered Calls (BXY) – outperforming CBOE’s BXM Buy Write Index

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With the introduction of the BXM and PUT indexes by the CBOE in 2003, it became apparent to many investors that selling Options around equity positions could indeed become a smarter way to invest for better returns in the long run and less volatility. Based on the interest provoked by the launch of these indexes, it was only a matter of time before investors started inquiring about other potential approaches to options selling.

Monday, January 14, 2019

Analysis of the CBOE CNDR Index - an Iron Condors benchmark

The CBOE’s CNDR index is a benchmark that tracks the hypothetical performance of a monthly SPX Iron Condor with short options at ~20 deltas, and long options at ~5 deltas. No trade adjustments/defense of any sort.

Let's have a look at its historical performance, illustrated on the CBOE website at

Saturday, January 12, 2019

Credit Spreads on Indexes - the failure of 2018. Lessons and moving forward

2018 was a disastrous year for what I call LTOptions (Credit Spreads, Iron Condors, Elephants) at -45%. There is no other way to put it, and although there were many issues at the personal level that affected me deeply, I don’t like to be complaining and using excuses. Time is more effectively used looking at the problems objectively and defining the proper course of action going forward.

These were the main problems in 2018:

Thursday, January 10, 2019

Outperformance of a Put selling Strategy

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One of the cons often mentioned about Put selling strategies is that you miss out on the larger gains that a stock rally would have provided.

It is true, that in the event of a strong rally (be it a stock or an index), holding shares directly lets you participate in potentially larger gains. However, not all stocks or indexes for that matter are constantly rallying. In many instances they face long periods of sideways back and forth, sometimes even years.
The S&P500 Put write index (symbol PUT) was created by the CBOE years ago and it aims to simulate a permanent Short Put strategy on the S&P500. Taken from the CBOE site:

Tuesday, January 8, 2019

February RUT Elephant

Trade Details:

4 Feb RUT 1240/1250 Credit Put spread @0.60 credit each
3 Feb RUT 1530/1540 Credit Call spread @0.95 credit each

6 Feb IWM 154 Long Calls @0.28 debit each

Saturday, January 5, 2019

Automated Forex Strategies - 2018 Results

The year was a success with positive returns across the board. Not as great as past years, but decent above average returns nonetheless that easily beat the benchmark. The Barclay's Currency Traders Index shows a +4.76% return among audited Forex Trading firms in 2018. That's the bench-mark I use for my FX Trading activity, which is all automated.

Friday, January 4, 2019

Leveraged Investing - 2018 results

This is my small account inspired by the Volatility and Leveraged Instruments to Lazily beat the Markets series.

Clearly "Lazily" does not mean "Stably" as the small account was down 22.3% in 2018, its first year in action. But the wild volatility of this approach was a known factor from the very beginning:

Thursday, January 3, 2019

Investing - 2018 results

This is my TFSA account (Canadian equivalent to a ROTH IRA in the US).
Results from previous years, both outperforming the TSX index, can be checked in the following links:
2017 Results   +7.96%
2016 Results   +24.53%

In 2018 the Canadian TSX index sucked. What a dog it has been for so many years now!
The index's performance was a pathetic -11.6%. That doesn't count dividends though. There is no ETF that tracks the TSX index. I usually go with XIU.TO as my benchmark which is the iShares S&P/TSX 60 ETF. With dividends included, XIU resulted in a -7.82% performance.

Tuesday, January 1, 2019

Enhanced Investing - 2018 Results

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Happy New Year!

$20,000 was the starting capital at the beginning of 2018 for the “Enhanced Investing” portfolio. At the end of the year a net gain after commissions of +$3867.81 had been realized, for a +19.3% performance. No equity exposure existed at the end of the year. In other words, no stock positions.
Breaking down the activity into the three main groups (Short Puts, Covered Calls and Dividends):