Category: INO.com Contributors

8 Months, 186 Trades and 98% Options Win Rate

Posted on by The INO.com Team

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).

Options

Figure 1 – Overall option metrics from May 2020 – December 31st, 2020
Continue reading "8 Months, 186 Trades and 98% Options Win Rate" →

Has Bitcoin Reached Its Peak?

Posted on by Chris Vermeulen

We hope you enjoyed the brief holiday break… it seems Bitcoin has been busy while the markets have been resting! Bitcoin enthusiasts are adamant that the price rally has just started a parabolic move higher. From a technical standpoint, this current rally certainly appears to have gone parabolic. As any trader already understands, what goes up may eventually come crashing downward.

My research team and I believe failure at the current highs would represent a clear technical divergence pattern between price and the RSI indicator. Additionally, the current rally that started on December 20 consists of a $10,850 rally phase. The previous rally from October 20 to December 2 consisted of a $9,200 rally phase. We believe this current rally phase from December 11 could be a Wave 5 rally (almost equal to the Wave 3 rally range). If our researchers are correct, this final rally phase could come crashing downward after reaching these peak levels above $28,000.

This 4 Hour Bitcoin chart highlights the incredible price rally that has taken place over the past 16+ days – a rally of over $10,000. It also highlights two very clear price rally phases – creating an A-B-C price wave pattern.

Bitcoin

This Daily Bitcoin chart highlights the two, almost identical in size, which has created a price peak above $28,000. It also highlights the technical divergence between price and the RSI indicator in the lower pane. Continue reading "Has Bitcoin Reached Its Peak?" →

Top Currencies VS. Gold In 2020: This "Rookie" Rocks!

Posted on by Aibek Burabayev

The time has come to see if any top currency could rival gold, which established the new all-time-high this year in this traditional yearly post.

Seven currencies represent the fiat money: U.S. dollar (USD) and six components of the U.S. dollar index (DXY) placed by weight: Euro (EUR), Japanese yen (JPY), British pound (GBP), Canadian dollar (CAD), Swedish krona (SEK) and the Swiss franc (CHF). Bitcoin (BITSTAMPUSD) is also here to represent the hyped crypto-world.

Before we jump to the results of 2020, let us see below how you predicted the future back at the end of December 2019.

LLLL

The majority of you bet that the "rookie" Bitcoin would beat all others, including the regular favorite U.S. dollar in 2020. The latter was the second choice a year ago. The third pick was interesting as it was the British pound, which was not in the shortlist of your bets before, but it managed to rank #3 last year.

Let us look at the diagram below to find out the results. Continue reading "Top Currencies VS. Gold In 2020: This "Rookie" Rocks!" →

The Fed Warms To Climate Change

Posted on by George Yacik

The politicization of the Federal Reserve continues apace. And no, President Trump isn’t trying to pull some grand last-minute gesture before he leaves office, like trying to fire Jerome Powell or something like that.

Last week, as expected, the Federal Reserve formally joined the Network of Central Banks and Supervisors for Greening the Financial System, the “lone holdout” among the world’s major central banks to join this “forum for central bankers and regulators to come together and discuss how their institutions can ensure their financial systems don’t worsen climate change risks, and how financial institutions might be able to lower those risks,” as the Wall Street Journal described it.

As innocuous as that may sound, it injects the Fed solidly in the middle of what has become increasingly political, namely which companies – and probably, individuals eventually– banks should or shouldn’t lend money or offer their services to.

As we know, several large international banks have been under increasing pressure from shareholder activists to stop making loans to companies in the “fossil fuels” business, namely oil and coal companies and pipeline operators, and the like. And the banks have dutifully buckled under, albeit with a long lead time as to when they will actually cease doing so. Now the Fed will be providing added pressure on the banks to make loans only to those companies favored by the Washington and New York elites – or at least will feel added pressure to do so. Continue reading "The Fed Warms To Climate Change" →

Tech Stocks - A "Win-Win-Win"?

Posted on by Noah Kiedrowski

Tech stocks seem to be eerily appropriate for the famous “win-win-win” term coined by Michael Scott on the sitcom The Office. Tech stocks are in the sweet spot and continue to appreciate regardless of the COVID-19 backdrop and feed into every industry in today’s economy. Whether COVID-19 is on the rise or on the decline, technology underpins the stay-at-home economy and the so-called back to a normal economy. And now more than ever, technology serves an integral part of every slice of the economy that these stocks have remained strong despite the massive rotation into value stocks. Whether the COVID-19 backdrop is good, bad, or the market is pricing-in putting the pandemic behind us, the technology sector is in a “win-win-win” situation. Considering many of these names have traded sideways since their September highs and significantly off their 52-week highs, these large-cap tech companies may be worth a look in this frothy market. Stocks such as Apple (AAPL), Amazon (AMZN), Alibaba (BABA), Facebook (FB), and Google (GOOGL) fit his profile.

The Value Rotation and Stagnant Technology

The market has witnessed a massive sea change as the prospects of a large-scale vaccination program in the US coming to fruition. The Dow Jones and S&P 500 have rallied to all-time highs while recovery and value names have recaptured much of their lost market capitalization due to COVID-19. Meanwhile, many technology stocks that powered the market higher in the initial stages of this post-COVID-19 rally have stalled out. Once the value rotation began, many high-quality technology names fell from their highs and have traded sideways since their highs back in September (Figure 1). Continue reading "Tech Stocks - A "Win-Win-Win"?" →