I am starting to look at exiting my May STT positions though I might try to expire them if they aren’t taking up to much margin. Lotto ticket to the downside. I’ll be spending some time looking at that today.
STT Returns and commentary:
I expect to return about 5% a month on average for the STT trade. That’s 60% a year on the balance portion used for the trade itself, it doesn’t include your balance reserve which I keep at about 35%. That means we’re returning closer to 40-45% on the entire balance non-compounded. However, every month I will increase the unit size to match the 35% net-liquid requirements and that should get the returns closer to 60% compounded and much more over the course of 2-3 years. It’s slower and less sexy than the previous trades I’ve done. Though I mean, over the course of the 14 months I did the Rhino trade, I’ve actually not had the luck to experience those types of returns, but I did get to experience some of the swings 🙂 I mean, balance movements, profits, losses and their recovery were a lot quicker back then. It’s fairly slow these days. I just plan the trades, execute (spending a lot of time on fills) and really don’t care where the market goes. Watching paint dry kinda? Of course, It’s not without excitement, often times I’ll get caught filling one portion of a trade directionally only to have the market move the opposite way and become unable to fill the other portion. Those are always fun to deal with 🙂 Or the ever annoying fill issues. I’d put in a small order at a price, get filled, then put on a larger order only for it to sit there for an hour. Putting on and taking off trades can be a tedious process, sometimes taking a full day.
I am off May 4th to play in a big poker tournament (double the size as the one I played in January) so I am quite excited about that. I’ve been studying/preparing at about 1 hr a day since January. I feel my game is probably 70% of the way to where I want it to be. I’ll post updates when I head off. The SCOOP is also on (Poker stars spring championship) and I’ll be playing several of those events.
That’s all for now…
Last week was somewhat interesting re how volatility and vol skew can have an affect on trades. The P/L on my trades halved from Apr 6 to Apr 12 and the market had moved a whole 8 points during that time. Almost NIL. However, the volatility increased and the skew changed as well causing my way OTM options that I am a net-seller on to retain or gain in value with-out the help of a similar increase in the debit spreads (closer ITM). I found that quite neat, it’s not often you see such an increase in vol and change in vol skew without a corresponding down move. These types of things are fairly temporary and had we had a real down move, the debit spreads would have activated more. It’s an affect that occurs when there’s some binary events, or very low odd but genuine worry of tail risks (i.e. NK and Syria uncertainty) and probably the biggest reason, the French elections.
I don’t really follow market technicals as much as I used to. I had several sources and was fairly in tune with the market, though for some reason, I’d never use it for trading 🙂 I was mainly trading Rhinos which was incredibly frustrating for the last 14 months as most of you who trade that can attest. We’ve had a never ending up move from the Feb 9, 2016 lows (I think close to 45% on the RUT). The trade suffers in any cycle that has a 5%+ up move and that was 10 of the 14 previous months. The moves were pretty insane, I remember during the Brexit event, my balance increased 300k only to dwindle to half that in 2 days. That was the only time the market went down a modest amount and allowed my matured Rhinos to finally profit. I was struggling adjusting on the downside only to have the market scream against and rally until pretty much Feb of 2017. From that Brexit event, the rhino trade was a struggle.
The STT trades are the opposite, they’re quite docile. I had to get away from intra-day trading, as I’d stare at my risk profiles, do analysis and be like huh-ok, nothing to do..what am I supposed to do with my time now? Trading has become boring, I guess I’ve arrived 🙂
Here is my June STT trade
This is a 108 unit trade. I’ve got 4 other Junes. It doesn’t include the BSHs which are not fully financed and do rely on some of the P/L here to finance.
Here is my JUL STT Trade
This is a 45 unit trade. Most of its value is stuck in it as we await the French elections
I am making a pledge to myself to post at least 15 times a month :). I keep letting this go but I find it is a cathartic healthy activity that I need to focus on. It has benefits re accountability and maybe it provides some value to the readers. I just had a baby (third) so I’ve just been in this distracted state after 4pm. I love tending to this and I hate that I often let it go.
Re trading: nothing too exciting. I am up to 450 or so units on the STT which is something I guess. It’s been such an adjustment (for the better). I no longer wake up a few times a night to check futures and I don’t need to check the phones often outside my normal adjustment period during the day. My obsession with market technicals has gone down too! Love it. The trade is just so damn docile compared to other trades. It’s literally the perfect trade for my style. It’s gone from reacting in real time to market events to evaluating market events over a longer period of time and creating a plan for adjusting the following day in a much less stressed way.
I’ve still got on one last unit of Rhino (april) that I has very minimal upside risk left. I’ll still put some of these on bit only opportunistically.
I am trying to mechanicize the management of the STT and BSH re having a large account and this is what I am working on currently. This has everything to do with the financing the BsH. A new idea emerged that I quite like.
We are doing a 3 month Europe trip again come May 28th with a newborn and a 5 and 7 year old. Should be fun! We will get an au pair to help us out (university student that wants a free summer trip). Probably do Poland, Germany, Slovenia and Italy again.
I’ve got two more poker tournaments coming up. I’ve been studying and practicing quite a bit. I want that main event final table. That’s the goal. I will get it soon come.
Tomorrow I will post the screen caps of my current trades.
Decided to fly down and play the WPT in Montreal to reclaim that stolen potential final table 🙂
Looking to play low ball style first day
Been a while again…regretfully
I was traveling over the holidays. Ended up buying a piece of land for a cottage and a new Model X Tesla P100D. Then to top it off, I then flew to Bahamas to compete in a few poker tournaments including the Stars main event championship.
Poker went pretty awesome. I got a 1st place finish and a 62nd in the main event only to be busted out when I had AA vs Ryan Riess’s AK. I was a 93% favorite after I 4bet shoved but he caught 2 kings on the flop and I was eliminated. Bad beat. But I walked away with about 15k for my efforts.
I can tell you despite the good results, it didn’t feel that great. My chip stack was healthy as was the villain (Ryan Riess). I was a huge favorite and I am confident that with my style of play, I’d have made the final table with that win. As well, when he called my 4bet shove with AK, we had to wait several minutes as the photographers, tv crews and some writers came over to analyse the hand. So I was sitting there, super excited, knowing I was a 93% favorite ..basically already counting my chips and smelling the final table only to have KK flop. Brutal.
I might have to add in a section on this blog for poker as I am now back at it and will be playing the circuit. Next stop WPT on Feb 9th in Montreal.
Here were some of the highlights:
In the trading world, I have moved over to doing a good % of my trading portfolio in the STT(Space Trip Trade) and BSH (Black Swan Hedge) trade combo. I got a big one on for May right now—>155 Units!
I am excited about the trade and it should be fun and interesting. I was satisfied with the back-testing and I think the trade will be my main staple trade along with a 30% combination of the ATM trades (Rhinos). I closed off most of the Feb Rhinos and have only some March and April. I’ll enter the Rhino trades opportunistically when pricing is good and use them as a hedge to to the mid 5-10% downside moves.
I’ll get a post up analyzing my current STT trade shortly. I have a few more debit spreads to add and it’ll be complete.
We flew into Vienna, spent 7 days and rented a car and made our way to Krakow, Poland. The rental car place told us we couldn’t go through Czech and possibly Poland (but they had to confirm). I told them don’t worry about it, we weren’t going there anyways lol. We did. Those types of small things give me pleasure.
The drive took I think about 4-5 hours. Krakow was one of my favourite stops this trip. Not what I expected. Everything was super cheap, people were friendly and it felt less touristy then other stops. I’ll be going back. We checked out the salt mines but not Auschwitz (next time). The vodka was like $1euro a shot for premium stuff. Delicious. of course we got Perogies several times. I am half Polish so on Christmas Eve, we eat Perogies and Cabbage rolls as a tradition.
The Salt Mines
Enjoying a big beer on a patio. Good times
The kids hanging out next to some sites
Kingstons face as I tell him about Ron Bertino’s Space Trip Trade
Looking Cool as Fuck
This past summer we did a 7 week road trip that started in Vienna and ended in Salzburg. Might be wondering how we pulled off 7 weeks of road trip and only ended up 3 hrs away, well we did one huge ass loop.
1. Vienna, Austria
2. Krakow, Poland
3. Lower Silesia, Poland
4. Dresden, Germany
5. Hanover, Germany
6. Frankfurt, Germany
7. Heidelberg, Germany
8. Aschaffenburg, Germany
9. Freiburg, Germany
10. Tuttlingen, Germany
11. Como, Italy
12. Ranco, Italy
13. Arona, Italy
14. Turin, Italy
15. Lyon, France
16. Milan, Italy
17. Strasbourg, France
18. Nuremburg, Germany
19. Salzburg, Austria (dropped car off)
20. Munich, Germany (By train rom Salzburg)
We always airbnb it except in one area (Arona) where we stay at an amazing B&B (it’s our 5th time)–>Cascina Incocco–>Which I’d highly recommend to anyone. It’s one of my favourite spots.
Some pics from the first stop on the trip:
On the way there!
Vienna – First Stop! Augustiner Yep.
A painting in Emma’s memory match. We’re ticking them off while we travel. Egon Schiele
On to Krakow!
Not much going on. Trades gained some value today. Nice little down day in the SPX and flat for the RUT.
I entered some March Rhinos
50 x RUT:1290/1340/380 @ 2.19
75 x SPX 2120/2200/2260 @ 4.00
A bit far out but I do like to enter around 88DTE anyways.
I’ve converted most of my Jan trades into more M3 like structures today with the drop. I worry about a slow grind up for the rest of the holidays so figured I’d jump in front of that with some calls and futures hedge. Low volume rarely gets sold into. I do expect some January weakness though.
Yesterdays downward bias post Fed was very welcomed but it seems the momentum is gone and we’re probably melting up to the 2300/2320 area for end of year. This may mark the top of the market short term (through H1 2017). My guess is RUT tops at 1395 area (perfect yearly pivot), SPX at about 2320 and DJIA at about 20030. This means there will be more strength in the large caps vs the small caps and then we should putter out into inauguration and be met with probably some unknown volatility causing events which should be reasonable given the tweet storms and world economical issues present already and not to mention issues (potential china devalue?) from a rising dollar + rate rise.
But who knows re any of those calls, this is an interesting time re metals, bonds and currencies and anything could happen (China devalue?). The insanely strong USD can cause many issues and the rate rise yesterday caused a big dump of china bond futures. US is really the first to break away and raise rates and no matter how you slice it, this will cause the unraveling and pain in other countries who haven’t followed suit. That can and probably will cause contagion and come right back around full circle. The 2nd largest economy in the world is directly affected by a US rate rise, rising(exploding) USD and this probably will have consequences on the equities market eventually.
I’ve got some ES futures on as upside hedges but if we truly do melt up, there’s no profit to be had until some sort of pull back. I hope that things don’t continue to follow the script (Santa rally) but it probably will. As is usual, any trades that I started before the last rally are now 7% above its starting point and are essentially fighting for a break-even result. When will this market environment end. We’ve had massive up moves on Brexit, Trump election and now the standard impending Santa rally. Sick and tired of 7% up cycles each and very time. When we have any period that’s 5% or less on the upside, I’ll be rejoicing as will my P/L. Until then, patience and smart trading knowing that volatility shall soon return and HOPING that perhaps this marks a major market top soon and we have many years of bearish volatility 🙂
Any new trades I start now (pricing is bad, so probably not) would then have another 5% before too much trouble on the upside. The problem is, in this type of environment, pricing is shitty all across the board, you pay more, which means you have more upside risk AND if the market does fall apart, vol increases and those same positions get relatively cheaper. Lose-Lose. Fighting two issues (Vol and negative delta). So not only are the current trades crap until we sit below 2250, but pricing may be weak to start new ones. Any dips or increased vol would be welcome both for existing trades and for starting new ones.
Back in Sept or Oct I posted this:
“My guess if I had to state one is that we’d see some more weakness into October and probably touch 2040 and rebound up to 2300/2400 into the end of the year.”
This is like 10/10 on specific longer term market calls that I’ve gotten and recorded in the blog but I’ve never actually followed or traded accordingly. I am running hot and made no money from it lol. Like many of you, I read tons of sources, follow technical indicators, information galore, and I generate a pretty decent read on the market more longer term etc etc but it’s more out of interest and little changes are made on my non-directional trades. If I really thought it’d touch 2040 in Oct and blast to 2300 by Dec, I wouldn’t even be in any BWB trades, I’d just go long. I should apparently swing trade longer term directional. Ah I hate these uber bull markets. Looking forward to the days markets don’t go up 47% in 7 months or have +7% cycles 🙂