CHRISTMAS PROMOTION
LTOptions at a 33% discount during the Year End Holidays.
Tell me More

Monday, August 19, 2019

October SPX Unbalanced Iron Condor

Trade Details:

4 October SPX 2590/2580 Credit Put spread @0.75 credit each
1 October SPX 3100/3110 Credit Call spread @1.10 credit

Thursday, August 1, 2019

September SPX Unbalanced Iron Condor

Trade Details:
(It was actually entered yesterday July 31, I just didn't find the time to come blog about it)

4 September SPX 2730/2720 Credit Put spread @0.65 credit each
1 September SPX 3120/3130 Credit Call spread @1.05 credit

Thursday, July 25, 2019

Enhanced Investing when things go wrong

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------

On April 10 of this year (2019), I was assigned 100 shares of CVS at a price of $60 per share. The Short April Put , strike 60, that caused this assignment had been originally sold for a $62 credit.

Ideally when an assignment happens, the price of the stock will be near your short option strike price, so that your open losses don’t look ugly. More importantly so that you can sell Out of the Money Calls that not only give you additional credit, but which are also above your shares assignment price, so that you can make capital gains too on a rebound of the stock.

Tuesday, July 16, 2019

September RUT Elephant

Trade Details:

4 Sep RUT 1390/1380 Credit Put spread @0.70 credit each
2 Sep RUT 1660/1670 Credit Call spread @1.15 credit each

3 Sep IWM 167 Long Calls @0.32 debit each

Tuesday, July 9, 2019

Does Enhanced Investing avoid high priced stocks?

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------

If you look at the Track record this year, you’ll notice that as of this writing (June 2019) no single trade has been made at a strike price of $100 or higher. No short Puts sold at or above that level. No stock assignments either. This begs the question:

Tuesday, July 2, 2019

August SPX Unbalanced Iron Condor

Trade Details:

4 August SPX 2730/2740 Credit Put spread @0.60 credit each
1 August SPX 3080/3090 Credit Call spread @1.00 credit

Monday, July 1, 2019

Leveraged Portfolio - Results half-way into 2019

With another good quarter we have arrived at the half of the year mark and the Leveraged Portfolio has been a nice surprise, up +34.4% so far. If last year all three components in the portfolio didn't seem to find a way to go up, this year it has been the other way around and all three vehicles have gone up nicely.


Tuesday, June 25, 2019

Historical Performance of Put Writing Strategies

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------

I spent some time this past weekend going over some recent White Papers published on the CBOE website. One that caught my attention is titled: Historical Performance of Put-Writing Strategies, written by Oleg Bondarenko, which you can download here.

There are several important points to mention. But I’ll make it short and you can get all the details in the paper. First the historical results, now with more than 30 years of data:
Monthly At the money Put selling (PUT Index) is now a little below the S&P500 when it comes to Compound Returns. It was better for many years (read Out-performance of a Put selling strategy) until now, due to the persistent bullishness of the last decade. Other Option-selling based strategies like BXMD (30-delta Covered Call index) do still beat the S&P500, but it is not included in the study. However, when it comes to risk adjusted returns, the PUT index is still much better than the S&P500. This is clearly reflected in the summary:
  • Long-term performance. Over more than 32-year period, the PUT index outperformed the traditional indices on a risk-adjusted basis. Compared to S&P 500, PUT has a comparable annual compound return (9.54% versus 9.80%), but a substantially lower standard deviation (9.95% versus 14.93%). As a result, the annualized Sharpe ratio is 0.65 (PUT) and 0.49 (S&P 500). 
  • Volatility risk premium. Historically, the option implied volatility has considerably exceeded the realized volatility. From 1990 to 2018, the average implied volatility, as measured by the Cboe Volatility Index® (VIX®), is 19.3%, while the average realized volatility of the S&P 500 index is 15.1%, implying the difference of 4.2%. Due to high volatility risk premium, PUT has delivered attractive risk-adjusted performance.
Another interesting point is the superior results of Put selling vs Put buying. In this case using the PPUT CBOE Index which holds the S&P500 index long term while buying an out of the money Put option (5% below the market) every month:
  • PUT versus PPUT. Since June 1986, the cumulative return is 1835% for PUT and 708% for PPUT. Compared to PPUT, PUT has a much higher annual compound return (9.54% versus 6.64%), a lower standard deviation (9.95% versus 12.08%), much higher risk adjusted measures (the annualized Sharpe ratio of 0.65 versus 0.33), a less severe drawdown (the maximum drawdown of -32.7% versus -38.9%, the longest drawdown of 40 months versus 80 months). PUT has a negative exposure to the volatility risk, which accounts for 0.29% of its average monthly excess return. In contrast, PPUT has a positive exposure to the volatility risk, which accounts for -0.17% of its average monthly excess return.
Selling Put options makes sense. Buying Put options may make sense as protective measures for your portfolio here and there, but should not be used as a permanent income producing strategy. It will be a drag to long-term returns.


Further Reading:

If you enjoyed this content, consider acquiring the Enhanced Investing Course. 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.


Go to the bottom of this page in order to see the Legal Stuff

Monday, June 24, 2019

August RUT Elephant

Trade Details:

4 Aug RUT 1390/1380 Credit Put spread @0.70 credit each
2 Aug RUT 1650/1660 Credit Call spread @1.15 credit each

3 Aug IWM 166 Long Calls @0.33 debit each

Thursday, June 20, 2019

Should I sell options during low volatility environments?

A reader recently contacted me with the following question:

"I was just curious about how to approach low Implied Volatility with the strategy. Do you still trade the strategy during times of low volatility or wait for higher IV and stay out of the market?"



To clarify, he is referring, among all the things I do, only to the  neutral trading, Option Premium selling oriented via Iron Condors, Elephants or just simple Credit spreads, whose results by the way are available here.

Saturday, June 15, 2019

Enhanced Investing - May 2019 Results

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------

May ended up bringing a $312.95 realized gain for the account after commissions ($25,000 account at Tastyworks, with 2:1 margin).

Tuesday, June 11, 2019

July SPX Unbalanced Iron Condor

Trade Details:

4 July SPX 2670/2660 Credit Put spread @0.65 credit each
1 July SPX 3040/3050 Credit Call spread @0.90 credit

Tuesday, May 28, 2019

Selling Puts during Low volatility

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------
It is always nice to sell options during high volatility environments. Premiums are higher and you can also position your strikes farther out of the money. However, there are many extended periods in the markets characterized by low volatility. Should we keep selling Puts in those scenarios?

Wednesday, May 22, 2019

Selling 30 Delta Calls – The BXMD Index

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------
In a previous post I talked about the CBOE BXY index, which simulates a Covered Call strategy on the S&P500 Index, selling Out of the Money Calls at strikes 2% higher than the index price. BXY has been superior to BXM (At the Money Calls) in terms of absolute returns, but it has been more volatile than BXM.

Thursday, May 16, 2019

Enhanced Investing - April 2019 Results

This article appeared first on enhanced-investing.com
----------------------------------------------------------------------------------------------------

April ended up bringing a $535.96 realized gain for the account after commissions ($25,000 account at Tastyworks, with 2:1 margin). A total of 18 short Puts were closed, all of them at a profit.

Tuesday, May 7, 2019

Podcasts for Traders and Investors

There is sometimes a tendency to think we have barely any free time in our daily lives anymore. That's partially true. However, I have realized there is always some window of dead time to kill that we can take advantage of on a daily basis. For example, while you are driving to/from work; on your way to a store or a friend's house; when we are taking a shower; doing chores in the house; when working out at the gym; while buying groceries (if you are not being accompanied by anyone of course). All this adds up to several hours every week that can be used to increase your knowledge.

Over the years I have become a podcast aficionado with three main areas of interest: Music/Singing, Sports analysis and of course the Financial Markets (trading and investing) which is the focus of this article.

Wednesday, May 1, 2019

Trading Scam Artists

In the trading/investing arena, scam artists are a dime a dozen.
As it turns out, it is much easier to get rich quickly by making money off of overpriced and useless services than to try and do it slowly with one's own capital saved and invested over the years.

Tuesday, April 23, 2019

June RUT Elephant

Trade Details:

4 June RUT 1425/1415 Credit Put spread @0.60 credit each
2 June RUT 1680/1690 Credit Call spread @1.10 credit each

4 June IWM 169 Long Calls @0.27 debit each

Wednesday, April 17, 2019

Rule number one of Enhanced Investing

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------
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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------

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.
Go to the bottom of this page in order to see the Legal Stuff

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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------
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.


Go to the bottom of this page in order to see the Legal Stuff

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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------
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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------
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.

Go to the bottom of this page in order to see the Legal Stuff

Tuesday, January 22, 2019

A Short Put Investment on SJM

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------




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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------

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 http://www.cboe.com/index/dashboard/CNDR#cndr-performance


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

This article appeared first on enhanced-investing.com
------------------------------------------------------------------------------------------------------
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

This article appeared first on enhanced-investing.com

---------------------------------------------------------------------------------

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):