Our BlogOur current view on the market
Last Friday saw a successful expiration of our latest primary HIPOS trade. As we’ve previously pointed out, when trades expire worthless they are then removed from your clients’ accounts thus realizing the full profit. Our traders, as always, are analyzing conditions to find the next entry that meets our stringent rules. Regular followers of the blog understand that typically new trades are placed around short-term spikes in volatility. Over the past couple of years, we are experiencing periods of low volatility, quick jumps, and then drops back to the low volatility environment.read more
This week our traders made some portfolio adjustments within the Buy and Hedge Retirement strategies to lock in gains and raise the hedge to a higher level (reducing downside risk).
As a reminder, Buy and Hedge Retirement is the strategy which looks to capture much of the equity upside of the S&P 500 Index (or other markets) while substantially reducing the downside participation. You can view this relationship below in the comparative profit and loss chart.
Click here for a PDF version of our August performance numbers....read more
This week the NFL returned with their slate of week 1 games. Often when a team is leading they aim to run out the clock as the less time the opposing team has, the less probable they will be able to come back. In football, they call it running out the clock. With short volatility positions, it is called time decay. Friday marks expiration day for our primary High Probability Options Trade.read more
Our Internet Advantage Strategies are founded on a unique new research approach that combines Artificial Intelligence (A.I.) and Big Data. The research team at Alpha DNA produces these equity picks exclusively for ZEGA Financial. The research has many interesting...read more
We continue to hear talk on the business channels around how Volatility continues to be on the low side. Off course we’ve witnessed some life coming back to volatility recently. But we hear questions like is the VIX Index broken? Speculation around the reasons the VIX has been so low are fairly plentiful these days. For sure the VIX Index reached historical lows. Although remember compared to a 100 year plus history of equity index prices, the VIX in relative terms is much newer.read more
Sunday afternoon the Russell 2000 Index futures contract opened gapped down on the geopolitical news. Volatility shot up but within a few hours of the regular trading session that gap was filled. Markets eventually wound up finishing flat to up for the day. Even with the opening down move, the Russell 2000 Index has remained in good position above our purple defensive posture line. Yesterday continues the recent pattern of volatility spiking on a higher percentage basis that the index themselves and vice-versa.read more
Update: Our Internet Advantage Strategy posture has moved to risk off meaning we have increased all of the market protections in the accounts. This move was actually made on August 11th.read more
Quite often business news networks are speculating on whether the latest global tensions, Federal Reserve predictions, politics, or insert worry here may cause a selloff. We hear the usual talk about markets “climbing a wall of worry”. That phrase encapsulates the idea that markets can continue to grind higher even though perceived concerns start to manifest themselves. There are always risks and something to be concerned about. We understand many investors start to get a little jittery when markets are sitting around all-time highs. Is it time to sell? Is now the right time to invest? All reasonable and natural things to be considering.read more
We all like a little bit of surprise in our lives. It can help to break up the monotony of our daily routines. Do you remember that restaurant you decided to try out and the food turned out even better than you expected? That is a pleasant surprise. However, none of...read more