New Trade Alert Below Profit Summary and Track Record
SPY went from $298.77 to $299.71 for +$0.94
Collar went from -$0.24 to -$0.06 for -$0.30
Net Profit = +$0.64/Share on 1700 shares or $1,088 total profit.
Key News: Trade talks remain positive, ECB is buying $20B/month is government bonds, FED is purchasing 60B/month in short-end treasuries, rate cut still expected at the end of the month and many sp500 companies report earnings this week.
Here is our current asset allocation recommendation:
Our average return remains well above the target goal of 1% currently sitting at 1.5% per month.
A sharp selloff in the TLT of -2.8% has caused the drawdown this month despite generating consistent profits on the SPY, EEM and GDX. We remain long both the TLT and SPY as there are a number of factors that could quickly cause equities to sell off and a quick jump in the TLT.
The charts below illustrate the profit per month we’ve generated against the SP500 and what you’ll notice is that we rarely have a losing period no matter which direction stocks are headed.
We do well when the market travels higher but when stocks selloff, especially rapidly, we generate substantially better returns as seen in the 2.2% return in May when the SP500 sold off -5%.
The only time periods we’ve really struggled has been during high intensity trade talks that had they failed would have sent the markets into a tailspin, we’ve always played it on the safe side.
New Trade Instructions
New Trade: Per 100 shares of SPY
(1) Buy to close Oct 21, 2019 $301.50 SPY Call, sell to close Oct 21, 2019 $297.50 SPY Put
(2) Sell to open Oct 23, 2019 $301 SPY Call, Buy to open Oct 23, 2019 $297 SPY Put.
Step 1. Close our previous trade if you took it otherwise skip to step 2.
Step 2. For every 100 shares of the SPY you own enter one of the following option contracts.
This is the maximum P/L we can achieve.