As the new year approaches us with hopes anew, here's to wishing you and your family a wonderful year ahead.
Happy New Year!
Every Success in 2021,
The
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At the core of options trading is defining risk, leveraging a minimal amount of capital, and maximizing return on capital. Options enable smooth and consistent portfolio appreciation without guessing which way the market will move. Options allow one to generate consistent monthly income in a high probability manner in both bear and bull market scenarios. Over the past 8-plus months (May-December), 186 trades were placed and closed. A win rate of 98% was achieved with an average ROI per winning trade of 7.7% and an overall option premium capture of 82% while matching returns of the broader market and outperforming during market downswings. An options-based portfolio's performance demonstrates the durability and resiliency of options trading to drive portfolio results with substantially less risk. The risk mitigation element is particularly important, considering markets are richly valued as measured by any historical metric (Figures 1 and 2).
Figure 1 – Overall option metrics from May 2020 – December 31st, 2020
Continue reading "8 Months, 186 Trades and 98% Options Win Rate"
This has been a hard year for many around the globe, but now more than ever, we hope you find yourself surrounded by love. The INO.com staff is very appreciative of your interest, and we love having you return to our blog time and time again.
Merry Christmas to you, and we are excited to help you build your financial goals and trading confidence in 2021.
If you don't celebrate Christmas, please accept our most genuine wishes for a happy holiday and a prosperous new year!
Don't forget to help your favorite organization this holiday season by leaving a comment on our donation post.
Best,
The INO.com Team
su*****@in*.com
The broader indices have been in a raging bull market since the COVID-19 induced lows in March of 2020. The rally has been largely uninterrupted, with minor blimps in September and October before reaching all-time highs by early December. The initial rally was narrowly focused on technology and the stay-at-home economy stocks. With the improving vaccine prospects, November saw a sea change with broad market participation with value stocks breaking out with huge moves to the upside. To boot, massive stimulus coming out of Washington is being priced into the markets. All three major indices (S&P 500, Nasdaq, and Dow Jones) are at all-time highs. Are stocks overextended underpinned by irrational exuberance considering the damaging economic consequences that COVID-19 inflicted on the worldwide economy? Are markets getting ahead of themselves as investors bet on a return to normal for the global economy? Stretched valuations, options put/call ratios, broad participation, and P/E ratios may be potential warning signs of near-term pressures.
Price-to-Earnings ratios are largely discordant with the economic backdrop and at historically lofty levels. Outside of the tech bubble in 1999/2000, the current P/E ratio of the S&P 500 composite is the highest on record, exceeding that of the Roaring Twenties (Figure 1). Continue reading "Irrational Exuberance?"
Despite Friday's overall weakness, the three major indexes and Bitcoin were able to post weekly gains. The DOW gained +0.4% for the week while the S&P 500 advanced +1.3% for its fourth positive week out of the last five. The tech-heavy NASDAQ outperformed the other two indexes with a gain of +3.1% for the week.
On a daily level, the DOW fell 124.32 points or -0.4%, to 30,179.05. The S&P 500 dipped -0.4% or 13.07 points, to 3,709.41, and the NASDAQ lost -0.1% or 9.11 points, to 12,755.64. All three indexes touched new intra-day highs earlier in trading after closing at records in the previous session. Those records are 30,343.59, 3,726.70 and 12,809.60 respectively.
However, Bitcoin was the big winner for the week, gaining roughly +22% and setting an all-time high of 23,777 on the back of rising volume. Where did that increase in volume come from? The bitcoin "whales," of course. Often times, these large rallies are fueled by large investors with an ability to influence market trends. Sound familiar? Continue reading "Winning Week For Stocks And Bitcoin"
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