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Mad Hedge Fund Trader

Mad Hedge Fund Trader 2013 Performance Tops 51%

Diary, Newsletter

The Trade Alert service of the Mad Hedge Fund Trader has posted yet another new all time high in performance, taking in 51.13%. The November month to date record is now an enviable 6.67%.

The three-year return is an eye popping 106.18%, compared to a far more modest increase for the Dow Average during the same period of only 20.3%.
That brings my averaged annualized return up to 36.4%.

This has been the highest profit since my groundbreaking trade mentoring service was launched 35 months ago. These numbers place me at the absolute pinnacle of all hedge fund managers, where the year to date gains have been a far more pedestrian 3%. I predict the arrival of a lot more job seekers on Craig?s List in January.

These numbers come off the back of another blistering week in the market where I added 5.13% in value to my model-trading portfolio.

I took profits on all of my extensive shorts in the Treasury bond market, taking advantage of the sudden back up in ten-year yields from 2.47% to 2.77%, the sharpest move of the year.

I then bet that the stock market would continue another tedious sideways correction going into the Thanksgiving holidays. I bought an in the money put spread on the S&P 500, and then bracketed the index through buying an in the money call spread.

When the market took a swan dive on Thursday, my short position then protected my P&L from undo volatility. I accomplished the same with a second short position in the Russell 2000 (IWM). I then took advantage of the weakness to add another long in the Industrials ETF (XLI), a rifle short at one of the best performing sectors of the market.

This is how the pros do it, and you can too, if you wish.

Carving out the 2013 trades alone, 61 out of 72 have made money, a success rate of 85%. It is a track record that most big hedge funds would kill for.

My esteemed colleague, Mad Day Trader Jim Parker, has also been coining it. He caught a spike up in the volatility index (VIX) by both lapels. He also was a major player on the short side in bonds, to the delight of his many followers. By the way, Jim will be following up with another educational webinar on How to Trade this coming Wednesday, and you should receive email invitations for this shortly.

The coming winter promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere in 2014. The Trade Alerts should be coming hot and heavy. Please join me on the gravy train.

Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars. Upgrade to Global Trading Dispatch PRO and you will also receive Jim Parker?s Mad Day Trader service.

To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? box on the right, and click on the lime green ?SUBSCRIBE NOW? button.

TA Performance

Jim ParkerMad Day Trader Jim Parker

https://www.madhedgefundtrader.com/wp-content/uploads/2013/11/TA-Performance.jpg 824 577 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-15 14:34:572013-11-15 14:34:57Mad Hedge Fund Trader 2013 Performance Tops 51%
Mad Hedge Fund Trader

November 15, 2013

Diary, Newsletter, Summary

Global Market Comments
November 15, 2013
Fiat Lux

Featured Trade:
(WATCHING THE CASH ROLL IN),
(SPY), (IWM), (FXE), (XLI), (C), (FXA), (AAPL),
(HOPPING ON THE AUSSIE),
(FXA), (EWA), (FCX),
(LUNCH WITH ROBERT REICH)

SPDR S&P 500 (SPY)
iShares Russell 2000 (IWM)
CurrencyShares Euro Trust (FXE)
Industrial Select Sector SPDR (XLI)
Citigroup, Inc. (C)
CurrencyShares Australian Dollar Trust (FXA)
Apple Inc. (AAPL)
iShares MSCI Australia (EWA)
Freeport-McMoRan Copper & Gold Inc. (FCX)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-15 01:06:132013-11-15 01:06:13November 15, 2013
Mad Hedge Fund Trader

Watching the Cash Roll In

Diary, Newsletter

Today, many followers of the Mad Hedge Fund Trader?s Trade Alert service have up to eight November option spreads expiring at their maximum potential profit.

My strategy of taking advantage of the short November expiration calendar and betting that the markets stay in narrow ranges turned out to be wildly successful. At this stage I am batting eight for eight. If these all work, then I will have issued 15 consecutive profitable Trade Alerts since October, something most hedge fund managers would die for at this time of the year.

I have already taken profits on five of my November positions, but judging from the email traffic, many of you are hanging on to the bitter end and have asked me how to handle these.

It?s really easy. You don?t have to do anything. Nada, Squat.

Trading in the underlying ceases today, Friday, November 15 at 4:00 PM EST. The contracts legally expire on Saturday night, November 16. The cash profit is then credited to your account on Monday, November 18, the margin freed up, and the position disappears into thin air.

Only the (SPY) November 2013 $180-$183 bear put spread is giving us a run for our money. As I write this, the (SPY) is trading at$179.27, and we are a mere 73 cents in the money on the $180 puts that we are short.

If the (SPY) closes on Friday over $180, then you will be short 100 shares for every contract of the November $180 puts that you are short. Your long position in the November, $183 puts expired on Friday, so you will be naked short. This is not a position you want to have.

It is always best to cover this at the opening on Monday morning to limit your losses and keep your risk from running away. You may also not have sufficient margin to run a naked short, so If you don?t liquidate, your broker will, probably at a worse price.

Don?t try to trade a leveraged short (SPY) position in a bull market. It?s probably beyond your pay grade, and I doubt you?ll sleep at night.

I?m betting that the (SPY) will close on Friday below $180, so I am hanging on to my position. With only one single day to expiration, it is a coin toss what will happen. But with the markets this sluggish, if I am wrong, it will only be by pennies. Quite honestly, being up 56% on the year I don?t mind taking a gamble here.

 

I know all of this sounds very complicated to the beginners among you. Don?t worry, this all becomes second nature after you?ve done the first few thousand of these.

If you have any doubts, call your broker and they will tell you what to do, especially the part about you needing to do a thousand more trades.? Here, an ounce of prevention is worth a pound of cure. Then it?s on to the next trade.

In the meantime, take your winnings and plan your winter Caribbean holiday with your significant other. Or plan a ski vacation at Incline Village in Nevada. They?ve already had two nice dumps of snow. If you do, drop me a line and I?ll take you out for coffee at Starbucks.

Well done, traders!

Expiring TA Nov. Opt.

SPY 11-14-13

BusinessJohnThomasProfileMap2-2Well Done Traders!

https://www.madhedgefundtrader.com/wp-content/uploads/2013/11/Expiring-TA-Nov.-Opt..jpg 772 555 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-15 01:05:072013-11-15 01:05:07Watching the Cash Roll In
Mad Hedge Fund Trader

November 14, 2013

Diary, Newsletter, Summary

Global Market Comments
November 14, 2013
Fiat Lux

Featured Trade:
(LOADING UP ON THE FINANCIALS),
(C), (BAC), (JPM), (MS), (XLF)
(THE BULL MARKET IN AMERICAN COLLEGE DEGREES)

Citigroup, Inc. (C)
Bank of America Corporation (BAC)
JPMorgan Chase & Co. (JPM)
Morgan Stanley (MS)
Financial Select Sector SPDR (XLF)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-14 01:05:182013-11-14 01:05:18November 14, 2013
Mad Hedge Fund Trader

November 13, 2013

Diary, Newsletter, Summary

Global Market Comments
November 13, 2013
Fiat Lux

Featured Trade:
(DOUBLING UP ON MY YEN SHORTS),
(FXY), (YCS), (DXJ), (UUP),
(SAN FRANCISCO?S SUFFERING RENTERS TAKE ANOTHER HIT),
(WHERE THE ECONOMIST ?BIG MAC? INDEX FINDS CURRENCY VALUE),
(MCD), (FXE), (YCS), (FXF), (CYB)
(TESTIMONIAL)

CurrencyShares Japanese Yen Trust (FXY)
ProShares UltraShort Yen (YCS)
WisdomTree Japan Hedged Equity (DXJ)
PowerShares DB US Dollar Index Bullish (UUP)
McDonald's Corp. (MCD)
CurrencyShares Euro Trust (FXE)
CurrencyShares Swiss Franc Trust (FXF)
WisdomTree Chinese Yuan (CYB)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-13 01:07:522013-11-13 01:07:52November 13, 2013
Mad Hedge Fund Trader

November 12, 2013

Diary, Newsletter, Summary

Global Market Comments
November 12, 2013
Fiat Lux

Featured Trade:
(YOU JUST CAN?T KEEP AMERICA DOWN),
(TLT), (SPY), (GLD),
(A SPECIAL NOTE ON NOVEMBER EXERCISED OPTIONS)

iShares 20+ Year Treasury Bond ETF (TLT)
SPDR S&P 500 (SPY)
SPDR Gold Shares (GLD)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-12 01:05:152013-11-12 01:05:15November 12, 2013
Mad Hedge Fund Trader

A Special Note on November Exercised Options

Diary, Newsletter

There are only 4 days left until the equity option expiration on November 15. My short dated November expiration play turned out to be wildly successful, with all nine of these trades quickly turning profitable. Including the six positions we now have on board, the last 14 consecutive Trade Alerts have been profitable, raising the success rate of our service to a stunning 85%.

The Mad Hedge Fund Trader?s model trade portfolio has three remaining positions that are deep in-the-money that expire that day. So, it is important that we tread carefully to get the full benefit.

I received a few emails from readers whose option holdings have already been exercised against them, and have asked me for advice on how best to proceed. So, here we go.

The options traded on US exchanges and referred to in my Trade Alerts are American style, meaning that they can be exercised at any time by the owner. This is in contrast to European style options, which can only be exercised on the expiration day.

The call option spreads that I have been recommending for the past year are composed of a deep out-of-the-money long strike price plus a short portion at a near money strike price.

When stocks have high dividends, there is a chance that the near money option you are short gets exercised against you by the owner. This requires you to deliver the stock equivalent of the option you are short, plus any quarterly dividends that are due. Don?t worry, because your long position perfectly hedges you against this possibility.

You usually get notice of this assignment in an email after the close. You then need to email or call your broker back immediately informing him that you want to exercise your remaining long option position to meet your assigned short position.

This is a gift, as it means that you can realize the entire maximum theoretical profit of the position without having to take the risk of running it all the way into expiration. You can either keep the cash, or pile on another short dated option spread position and make even more money.

This should completely close out your position and leave you with a nice profit. This is not an automatic process and requires action on your part!

Assignments are made on a random basis by an exchange computer, and can happen any day. Exercise means the owner of the option that you are short completely loses all of the premium on his call.

Dividends have to be pretty high to make such a move economic, usually at least over 3% on an annual rate. But these days, markets are so efficient that traders, or their machines, will exercise options for a single penny profit.

Surprise assignments create a risk for option spread owners in a couple of ways. If you don?t check your email every day after the close, you might not be aware that you have been assigned. Alternatively, such emails sometimes get lost, or hung up in local servers or spam filters, which occasionally happens to readers of my own letter.

Then, you are left with the long side deep out-of-the-money call alone, which will have a substantially higher margin requirement. This is equivalent to going outright long the stock in large size.

This is a totally unhedged position now, and suddenly, you are playing a totally different game. If the stock then rises, you could be in for a windfall profit. But if it falls, you could take a big hit. Better to completely avoid this situation at all cost and not take the chance. You are probably not set up to do this type of trading.

If you don?t have the cash in your account to cover this, you could get a margin call. If you ignore this call as well, your broker will close out your position at market without your permission.

It could produce some disconcerting communications from your broker. They generally hate issuing margin calls, and could well close your account if it is too small to bother with, as they create regulatory issues.

In order to get belt and braces coverage on this issue, it is best to call your broker and find out exactly what are their assignment policies and procedures. Believe it or not, some are still in the Stone Age, and have yet to automate the assignment process or give notice by email. An ounce of prevention could be worth a pound of cure here. You can?t believe how irresponsible some of these people can be.

Consider all this a cost of doing business, or a frictional execution cost. In-the-money options are still a great strategy. But you should be aware of all the ins and outs to get the most benefit.

John Thomas

BusinessJohnThomasProfileMap2-2

0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-12 01:03:322013-11-12 01:03:32A Special Note on November Exercised Options
Mad Hedge Fund Trader

November 11, 2013

Diary, Newsletter, Summary

Global Market Comments
November 11, 2013
Fiat Lux

Featured Trade:
(MAD HEDGE FUND TRADER 2013 PERFORMANCE TOPS 51%),
(TLT), (TBT), (AAPL), (XLI), (IWM), (SPY)
(TESTIMONIAL),
(A TRIBUTE TO A TRUE VETERAN)

iShares 20+ Year Treasury Bond ETF (TLT)
ProShares UltraShort 20+ Year Treasury (TBT)
Apple Inc. (AAPL)
Industrial Select Sector SPDR (XLI)
iShares Russell 2000 ETF (IWM)
SPDR S&P 500 (SPY)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-11 01:06:272013-11-11 01:06:27November 11, 2013
Mad Hedge Fund Trader

Mad Hedge Fund Trader Blasts to new All Time High

Diary, Newsletter

The Trade Alert service of the Mad Hedge Fund Trader has posted a new all time high in performance, taking in 46.05% so far in 2013. The three-year return is an eye popping 101.7%, taking the averaged annualized return to 35%. That compares to a far more modest increase for the Dow Average during the same period of 19%.

This has been the profit since the groundbreaking trade mentoring service was launched 35 months ago. These numbers place me at the absolute apex of all hedge fund managers, where the year to date gains have been a far more pedestrian 3%.

These numbers come off the back of a blistering week in the market where I added 5% in value to my model-trading portfolio. I called the top in the bond market on Monday, shorted the Treasury bond ETF (TLT), and bought the short Treasury ETF (TBT). Prices then collapsed, taking the ten-year Treasury bond yield from 2.47% to 2.63%.

I then pegged the top of the Euro (FXE) against the dollar, betting that the European Central Bank would have to cut interest rates to head off another recession. Since then, the beleaguered continental currency has plunged from $1.3700 to $1.3350 to the buck.

I then bet that the stock market would enter another tedious sideways correction going into the Thanksgiving holidays. I bought an in the money put spread on the S&P 500, and then bracketed the index through buying an in the money call spread.

Carving out the 2013 trades alone, 57 out of 71 have made money, a success rate of 80%. It is a track record that most big hedge funds would kill for.

This performance was only made possible by correctly calling the near term direction of stocks, bonds, foreign currencies, energy, precious metals and the agricultural products. It all sounds easy, until you try it.

My esteemed colleague, Mad Day Trader Jim Parker, has also been coining it. He caught a spike up in the volatility index (VIX) by both lapels. He also was a major player on the short side in bonds.

The coming winter promises to deliver a harvest of new trading opportunities. The big driver will be a global synchronized recovery that promises to drive markets into the stratosphere in 2014. The Trade Alerts should be coming hot and heavy.

Global Trading Dispatch, my highly innovative and successful trade-mentoring program, earned a net return for readers of 40.17% in 2011 and 14.87% in 2012. The service includes my Trade Alert Service and my daily newsletter, the Diary of a Mad Hedge Fund Trader. You also get a real-time trading portfolio, an enormous trading idea database, and live biweekly strategy webinars, order?Global Trading Dispatch PRO?adds Jim Parker?s?Mad Day Trader?service.

To subscribe, please go to my website at www.madhedgefundtrader.com, find the ?Global Trading Dispatch? or "Mad Hedge Fund Trader PRO" box on the right, and click on the blue ?SUBSCRIBE NOW? button.

TA Performance YTD

FXE 11-1-13

TLT 11-1-13

TBT 11-1-13

SPY 11-1-13

Jim ParkerMad Day Trader Jim Parker

https://www.madhedgefundtrader.com/wp-content/uploads/2013/11/TA-Performance-YTD.jpg 699 490 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-08 10:10:562013-11-08 10:10:56Mad Hedge Fund Trader Blasts to new All Time High
Mad Hedge Fund Trader

November 8, 2013

Diary, Newsletter, Summary

Global Market Comments
November 8, 2013
Fiat Lux

Featured Trade:

(THE RISING RISK OF A MARKET MELT UP)
(FXE), (FXY), (YCS), (FXA), (SPY), (USO),
(THE PARTY IS JUST GETTING STARTED WITH THE JAPANESE YEN),
(FXY), (YCS), (DXJ)

CurrencyShares Euro Trust (FXE)
CurrencyShares Japanese Yen Trust (FXY)
ProShares UltraShort Yen (YCS)
CurrencyShares Australian Dollar Trust (FXA)
SPDR S&P 500 (SPY)
United States Oil (USO)
ProShares UltraShort Yen (YCS)
WisdomTree Japan Hedged Equity (DXJ)

https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png 0 0 Mad Hedge Fund Trader https://madhedgefundtrader.com/wp-content/uploads/2019/05/cropped-mad-hedge-logo-transparent-192x192_f9578834168ba24df3eb53916a12c882.png Mad Hedge Fund Trader2013-11-08 01:05:172013-11-08 01:05:17November 8, 2013
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