Our Year-To-Date Performance
Our year-to-date trade performance through November 6th appears below.
This Week’s Trade Exits
As soon as I exit a trade, I note that in the comments of the post where I first mentioned the trade; at the end of the week, I try to track them all in one post. Starting in July, 2024, I have also been tracking them in a spreadsheet. These are the trades I exited this week.
Each exit card links to the relevant exit comment in the original trade alert.
Stocks or Exchange Traded Products
None.
Options
Comments
Stocks and exchange-traded products
We didn’t have any stock or ETF exits this week, but our Top Names record remains strong. It currently covers 175 completed six-month cohorts, with an average stock return of 18.06%, versus 9.87% for SPY over the same periods.
Options
A Brutal Week For Stocks
This was a brutal week for stocks. The Wall Street Journal reported that October losses had already driven stock-picking hedge funds to unwind positions at the fastest pace in more than a decade, before Thursday’s selloff intensified.
The Downside Of Put Spread Financing
We took several put spread losses this week after sharp declines triggered early assignments. That tied up buying power until we exercised the protective puts or sold the resulting shares and long puts. The Ichor loss slightly exceeded 100% because selling the assigned shares and protective put separately cost six cents per share more than the spread’s $5 width. That one, I should have probably exercised.
Selling a put spread can reduce the cost of a bullish trade, but it also adds risk if the stock falls significantly. In recent months, I’ve been more selective about using that financing: the credit needs to justify the extra risk. Cutting a $6 debit to $5 probably isn’t enough to justify a $5-wide put spread. Turning a $3 debit into a $2 credit is a much more substantial contribution.
Readers who want a lower-risk approach can revisit the free section of our Blood In The Streets alert for our hedging and hedged-portfolio tools, and the tradeoff between downside protection and potential return.
