How To Read The Mad Hedge Daily Position Sheet

We have recently had a large influx of new subscribers. Perhaps it is because they possess the same vision as I that we are in an extended bull market driven by hyper-accelerating technology that could continue for another five years, and that we will likely see the S&P 500 above 6,000 by year’s end.

Therefore, I am offering a refresher course on how to use the Mad Hedge Daily Position Sheet, which is included with your subscription. But first, let me dive back into the deep and dark primordial history of the Mad Hedge Fund Trader to learn its origins.

Because I missed the thrill and adrenaline of the financial markets, I started to launch a new hedge fund back in 2007. I had just spent six years in the oil & gas industry developing the new fracking technology, and it was just too slow and sedentary for me. Weeks were spent landing drilling rights in some of the most remote, dry, and desolate parts of the US, and some of the people you had to deal with you didn’t necessarily want to introduce to your mother.

So I took the software and spreadsheets developed by the hedge fund I ran and eventually sold during the 1990s, modernized them, added sophisticated new algorithms, and started raising money for a brand new hedge fund from high net worth individuals and institutions.

Then the 2008 financial crisis hit. Everyone, to a man, pulled out of my proposed fund, some losing their entire fortunes in the ensuing crash. One even gave me his place in line to buy the new Tesla Model S, which ended up becoming chassis number 125 off the assembly line in Fremont.

My new hedge fund would have to wait.

Then I wondered whether individual retail investors would have any interest in my services. My goal was to make available sophisticated trading strategies to individuals, usually only available to the wealthy with $5 million minimum investment in large hedge funds.

I took the updated software I created for my new hedge fund and offered it as the Mad Hedge Fund Trader in February 2008. It turned out that the public interest was overwhelming, and the rest is history.

The Diary of a Mad Hedge Fund Trader proved so exhilarating that I never did get around to launching that new hedge fund. It turns out there is far more satisfaction in turning a $50,000 into $500,000 than in converting a millionaire into a billionaire.

I promise to tell the rest of the story in a future letter.

In order to access the Mad Hedge Daily Position Sheet, do the following:

1) Log in to your account at www.madhedgefundtrader.com and click on “Member Login” in the upper right corner.

2) Type in your email address and password in the white boxes in the lower left corner.

3) A page with “Welcome Back” appears. Hover your cursor over the “My Account” tab in the upper right corner. A dropdown menu appears listing all of the Mad Hedge services you have purchased.

4) Click on GLOBAL TRADING DISPATCH.

5) Eight Blue and Red boxes will appear. Click on the Current Positions blue box.

6) In the lower left corner, you will find a piece of blue hypertext called “Download in Excel (XLSX) Updated for (today’s date). Click on this.

7) The new spreadsheet will appear in your “Downloads” folder. And here you have it to play with as you want.

Well, that was easy! You can now analyze your own positions, run your own market scenarios, adopt different assumptions, and so on. It’s yours to keep until tomorrow, when you get a new one.

Now that you’re in, there’s a lot here to digest. You are now officially a pro! At least a semi-pro.

First of all, make sure you have the correct Date in cell C2. We usually post an updated spreadsheet 30 minutes after the New York Stock Exchange closes at 4:00 PM EST (or 6:00 AM Sydney time the next day), but sometimes there are delays caused by chasing down errors.

If you are like me, the next cell you will want to jump to is the Month-to-Date Performance in cell F15. This determines whether you’ll be taking your wife or girlfriend out to an expensive dinner that night or spend the night tossing and turning in bed. Usually, it’s the former, but occasionally it’s the latter.

It’s an easy leap there to Year-to-Date Performance in cell F17 and Performance since the December 8, 2010 Inception in Cell F9.

Next, you will want to check my Asset Class Breakdown that starts in cell A11 to make sure you haven’t missed anything. Life happens, the Internet goes down, or emails can end up in SPAM folders, so it’s best to cross-check my trading book with yours. These are divided into Risk On and Risk Off positions. Risk On means that my global team’s exhaustive research has informed me that the underlying stock will rise. Risk Off means it will fall.

In an ideal world, Risk On and Risk Off balance each other out, generating a net risk of zero percent. This doesn’t actually happen very often (only in neutral market conditions, which are rare).

In reality, I am very heavy Risk On positions at market bottoms and very heavy Risk Off positions at market tops. And when the risk/reward is very everything is terrible, I will have no positions at all, as was the case at the end of June 2024. That is what you want. Always let the other guy unnecessarily stick their neck out.

Cell B23 will show the Total Net Position of all your longs and shorts. Cell B25 shows you the Total Aggregate Position, or the number of positions you have added up. That way, you know exactly how much free cash you have to spend on new positions.

To the right of the Asset Class Breakdown, you will see a multicolored pie chart showing the weightings of each individual position.

Next, we go to Current Positions in cell C30. Here is where you find the details of each individual position. Since I believe that the low-hanging fruit in the financial market is still in options spreads, where the risk-reward is overwhelmingly in your favor, these positions are presented in long and short pairs.

Column A – Date Opened
Column B – Date Closed
Column C – ticker symbol, maturity month, and option strike price
Column D – Asset Class
Column E – long or short
Column F – Underlying stop loss price (where you bail on a losing position)
Column G – Notional Cost
Column H – Current Market Price
Column I – Profit & Loss for the individual position
Column J – Profit & Loss for the spread pair of positions
Column K – Risk Weighting Metrics
Column L – Leverage
Column M – Portfolio Net Exposure
Column N – I keep open for future custom Algorithmic Analysis
Column O – I keep open for future custom Algorithmic Analysis
Column P – Number of options contracts per position. Negative numbers are short positions

In Cell C52, you will find a listing of all trades executed in 2023 along with their individual profit & loss. From Cell B125, you find a listing of all trades executed in 2024. We actually have records going back to 2010, but nobody cares about that except the SEC.

Well, that’s about it. If any of you have questions about the above explanation, please email me at support@madhedgefundtrader.com.

Welcome to the Mad Hedge Fund Trader community, and I look forward to working with all of you.

John Thomas
CEO & Publisher
The Diary of a Mad Hedge Fund Trader