Insights

Sharing the thought process behind our strategies keeps you informed
HIPOS Weekly Update: The Window Opened and Closed on Volatility

HIPOS Weekly Update: The Window Opened and Closed on Volatility

Volatility is once again showing a familiar pattern: spiking quickly then fading just the same. Last week, after essentially trading in a tight range, markets broke to the downside on Wednesday. You probably remember the S&P 500, Dow Jones, Nasdaq, and Russell 2000 all off somewhere between 1.5% and 2.5%. The follow through to the downside didn’t materialize. The entry for this trade once again was a very small window.

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Money Flows Often a Contrarian Signal

Money Flows Often a Contrarian Signal

Last week some US equity funds experienced large redemptions that corresponded with the down day in the markets. If you remember, the major indices were off between -1.5% and- 2.5%. Some commentators mentioned that it was the largest outflows since right before the election. Curious, I went back through the archives and found the corresponding chart and article on Bloomberg highlighting the massive outflows from emerging market ETFs around the election period.

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HIPOS Weekly Update: Volatility Holiday Over? New Position Entered.

HIPOS Weekly Update: Volatility Holiday Over? New Position Entered.

After a seemingly endless amount of news stories and CNBC prognosticators opining about how low volatility has been, today was a surprise to some. Volatility spiked and the major averages were off 1.5% to 2.5% across the board as of late trading. Long time advisors utilizing our HIPOS (High Probability Options Strategy) know that since we are net sellers of option premium, we often wait for short term spikes to capitalize on. While we don’t try and time the market, the result of being patient often leads to entries after sell offs.

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