It’s been a while for the trade updates. They’ll be more regular now that we’ve settled into our routines while traveling abroad. I’ve not got to put more time into work, cut out the regular beers and get back at it 🙂
I’ve closed the RUT and SPX MIC for a total gain of 6.22% combined. The SPX MIC did quite well having been closed at 7.73%, I nearly had 8.2% but the huge 25 point up move 2 days ago caused me some grief. The RUT MIC did modestly well at 5.31%. We were roughly 2/3rds RUT and 1/3rd SPX.
We’ve got about 1/4th allocation live on the July trade which is up 3.6% already! I’ve been waiting for a good entry point for the rest of the allocation but just haven’t been able to get it. We were tied into the June trade until 2-3 days ago and the market has been on a tear since. I don’t want to enter on up-days when the volatility is low. However, time is ticking as we’re about 36 days till expiry. I’ll see what today brings. We might only get half on this month but we’ll start the August trade earlier. I don’t want to enter an uncomfortable and mediocre trade just to be exposed. I’ll be looking to enter Friday, Monday and Tuesday latest if the market conditions are right. If it works out, it works out, if not we’ll go in a half position and look to enter August options earlier on a down-day.
The market is back (and stalled again) in the range of 2100/2120. I don’t have much else to say. We’re waiting for this market to get out of its range. It’s a weak time of the year but that doesn’t say much.
The protector is inching on its own all time highs. I’ve reduced some position to make way for new strategies that fit more into the MIC style (modified Butterflies and bearish butterflies with rule sets). I’ve been learning from John Locke @ SMB. These strategies are next level. His work makes my work on MIC look like I’m selling covered calls 🙂 Very excited to continue learning and backtesting these strategies (M3, Bearish Butterfly, M21 and Rock). They’re all theta based market neutral strategies (just like the MIC) but with complicated adjustments and rule sets which make them much more conservative (less risky) while providing similar returns. They are a nice way to scale diversification. I’ve finally found some ways of diversification that I am comfortable with and capitalize off what I consider myself to truly understand and am good at. I had explored diversified strategies in December/January and just couldn’t get into it (you can scroll all the way back through this blog to see what I mean). I had explored momentum strategies, SPY/TLT pair trades etc. Just not into having to rely on market conditions for success. I’ve always liked the market neutral basis of the MIC and I am very glad to have found complimenting strategies that fit within this parameter and that can hedge each other. I am especially excited to have my jaw dropped while learning off of someone else’s brilliant take on the same stuff that I’ve been doing for years.