I have been modeling XIV in periods of very low volatiity (like the last week). Two of my indicators gave reason for caution for the rest of the week.
Agreed. However, overnight markets are still surprising me. VXX 34.50 will prove an interesting barrier, the most interesting we have seen in two weeks, outside of that - who knows.
Unbelievable market strength this morning - surprise!
As noted two days ago, we are not surprised the markets have sold off for mysterious reasons. I have also been starting threads warning people about volatility - of course only to be attacked and berated the entire time. That’s okay!
Well… not so mysterious reasons today.
Today marks the 30th anniversary of Black Monday. The news wires are also trying to blame spain tensions, China GDP growth at 6.8% or earnings disappointment, but those are just the usual finger pointing that means absolutely nothing. The reason for this is superstitious, many traders pay attention to things like this, the ones higher up even pay attention to astrology. You won’t hear that report in the news! Volatility signals two days ago simply pointed to the buyers coming in to hedge their portfolios.
Here’s what to expect.
This will actually be our best performing program today. I knew it was possible that the VIX would pop - so we initiated our new short positions 100% covered with the new barrier @ 12 versus @ 11 as we had last week - this was a great move as the VIX is currently trading @ 11.33 - We were also long 150 VXX contracts into the close, thus we are over covered at this time. I am likely to add more to the position uncovered, which will move into covered mode into the close, or on an intraday basis depending on fills. This may or may not happen today - further activity.
Expect 1-2% drawdown here.
Our Nasdaq futures hedges triggered in a not so perfect zone today and I cut them for a loss this AM. However, what if the market did melt down? That order would have pinned the DD @ 2% where it would have stopped and others would have blown up. This is worth the insurance, however ideally in hindsight the order would’ve worked best triggering around 6090 but we are currently trading now at 6085 - so this was a tight level. The point is - the program was hedged for this type of event, and today we paid a small fee to ensure your account doesn’t blow up.
Here’s what to expect trade wise.
I will be initiating a bull put spread on the QQQ 147 barrier expiring end of week because I already have signals this sell off has shown signs of reversing. More than likely - this turns into a BUY THE F* DIP montage as we all have heard this screamed out for the past 4 years. BTFD. Yes, days like today freak people out, but more than likely, funds buy this. This is not real selling, it’s just real selling based on what we have seen the past two months. When the trade expires I will consider getting long NQ futures / and or continuing to sell premium on the QQQ call position. We are closing out the SQQQ hedges and DEC 147 puts here. We could’ve bought more SQQQ into the close, I will consider that an error on my end.
Expect 1-3% drawdown here.
Most of the options barriers this week should expire worthless, I think Alibaba will hold and pay off nicely. I may close out all covered call positions here for a profit. NFLX and APPL will weigh down the portfolio, however I will be adding intraday hedges that will trigger puts if the market melts down. There is no way on an options program like this can not take on a drawdown on days like today, it’s just the extent of that drawdown that matters. This should be the worst performing program today.
With that said… traders needed a day like today badly, I am looking at my signals now and I do believe this sell off is contained, that’s not to say it won’t change, but it does look this way right now. If the market behaves orderly at these levels, it opens up significant opportunity for me next week and to close out the month.
I will be very very busy today and cannot answer questions in PM unless from current subscribers.
My programs are free, and they come with constant communication and hedging.
Please be safe today and do know that it’s a good day to evaluate your traders. 1-5% DDs on a morning like this are reasonable depending on the program, beyond that is not reasonable. A median DD on a day like today of about 2.5% would be ideal, especially if you notice the trader had hedges on, whether they won or lost ,doesn’t matter, they should have had something trigger overnight if they also use futures. Consider your open risk and evaluate the programs. If you would like an opinion on a program and their activity today, feel free to send the information over.
As I expected, markets have stabilized quite a bit… volatility dropped right back into range. Will post an update near end of day on potential overnight hedges, because something was up this morning, and none of the answers make sense.
I am comfortable and fine with the DDs today on a semi-black swan event this morning. Volatility lost, badly.
Two days ago:
This happened today.
This also happened today.
Markets look good here. With ES at new highs this did indeed turn into BTFD. This is often the case with volatility events, they are the reversal days to watch out for. You need to be cautious with hedges, just as much as you care cautious with positions, which is why our #NasdaqPRO program cut that NQ futures short early on. And which is why most people don’t hedge - they lose too much on the hedges.
We are in a great position. Currently I see $300K in AUM which means there must be at least a few people following. I hope you are enjoying the free fully hedged and communicated signals. Thank me later.
We are back to the drawing board. Ideally, today we did want to see volatility at least hold mid range but VXX closed down into a NEW LOW… However, I do still have full confidence, as we have neutralized quite a bit of action here. The puts we have on the system will go into the money soon, the current covered short setup is slightly overweight, which will take care of any decay on the core long position. We will get further overweight those short calls, and then possibly keep adding some short spreads VXX on a weekly basis.
I will be focusing on NFLX and APPL once the BABA trades clear. We will be adding to the Apple position, and hedging with NQ futures overnight etc. and put options on the day. I suspect the DD here of 1.5% won’t breach 2% but as high as 3% would not surprise me. I am likely to add some type of weekly bull put spread on another stock on a weekly basis to level the playing field.
my favorite trade running into next week is a bear call spread on the 150 barrier 152/150 and bull put 146.5/144.5 - dont follow trades blindly, i have hedges on these too and they can be rough without them, ive decided to run the forums as a slight trading journal so my typing will be broken and quick / more often
The week has closed on a mild note for me. I am happy with the performance on my end, but disappointing volatility literally dropped into a new low. I was not expecting that. This removed the potential edge that was in store for the week. I was surprised, but again - how we are covered is better than unforseen risk. I do expect markets to make new highs next week, primarily the Nasdaq to catch up with the action we have seen across the S&P/DJIA… All of the programs are in great breathing room aside volatility. I will be initiating additional VXX short call spreads as I do have confidence we are unlikely to be retesting the 36 barrier next week. Those should pull down around $500-1000 in actual profit, not simply covering our decay on the long call. Additionally, I will still be looking to add to our long put positions. At this time, the program has incurred about 2-3% in hedging costs, which is absolutely normal. I would like to explain the program a bit more right now:
Here’s why there is so much upside. The program works like this:
We want to neutralize a long VIX position with the assumption that what happened on thursday morning (surprise market drop, and spike in volatility) sustains itself, however respects our barriers. This means the options expire worthless, and then I have the long calls and the long VXX position to leave open for a blockbuster trade. With volatility this low, that’s why we are trying this. It’s also a perfect hedge if you have a portfolio mostly long stocks. But it’s hard for me to really explain it further in words. At this point, however… I do believe now we will close out the month in negative territory on the program, likely roughly around 2-3%. Decay is contained, and I’m not worried about it - but am dissapointed that price action on Thursday did not provide the edge that I had hoped.
Enjoy your weekend.
@TradePRO I was simulating your strategies and now they are private and simulation shows -100% for all of them. What did happen?
You had no intention of subscribing to the strategies. I found an enormous C2 glitch in calculating margin and while I figure out what’s happening I have gone private. The strategies are all in the money except for Volatility.
I lost money with the volatility strategy, unfortunately a semi-disaster today primarily to a C2 complication in calculating margin. I have read many reviews from people that want strategies which are spreading options, and today I found out why it’s possible C2 doesn’t have more people doing this. There is one person doing it by the name of Jennifer but she is playing many stocks at once, and one swan will wipe her out on those bear puts she plays. The best thing to do is stick the indices or volatility. There it’s possible, but there are limitations - which should be made more clear to trade leaders. There have been a few other errors, but not as bad as this one.
This week I had initiated a VXX spread primarily working around the 37 barrier, which we should see those short calls expire worthless. However, I needed to hedge moving into next week. so… I opened new VXX long calls expiring next week, and closed the current long calls I had in profit - the system should have still considered the short 37 VXX calls as covered. After I closed the long calls for a profit on the week, C2 initiated a margin call, basically considering all short exposure I had as uncovered, when it wasn’t. This resulted in me forcing to close all the positions, including the VXX short 37s for a loss on the week, where they are likely going to expire worthless for a profit. It’s not that complicated to work around this with Collective2 - you just have to make sure the trades are synthetically paired, and you can’t open up calendar spreads. However, if you don’t know that - then you will lose money. And I lost money on this error today, more than was comfortable for me, or the subscribers. However, NasdaqPRO and OptionsPRO are moving forward fine and I will make them open to the public again. Volatility was giving me trouble, which was expected, however this just made it unmanageable, and I apologize.
1 down. 3 to go.
Another one killed.
So 2 down, 2 to go now.
Amazing what people pay to subscribe to…
The other systems are fine. They just don’t require the same type of sophistication, you’re all haters! It’s funny.
And you’re kidding right? This is your system:
40% drawdown trading straight ETFs? You are garbage. The equity curve is a joke.
I really shouldn’t have started using the forums to begin with. You get haters and the valued clients probably aren’t even paying attention.
Last year a very active guy on this forum “Tsvika Elberger” used exact the same tone as you in the forum, blaming everybody to be “haters” if they critized his exellent systems.
Are you him? If not look up his postings and you will find your soulmate.
A tip - Beat at least SP500 before trying to market them in this forum.
His strategy is profitable after a year. And you already closed 2 of your strategies after a month.
TradePRO is going back and deleting older posts of his. I find this humorous.
Eating… and watching this trainwreck.
Good luck TradePRO!! lol.