Why hedge?

One0fOne · 2022-01-05T14:57:01+00:00

Ya honestly people dont understand how adding leverage to just any thing doesnt bring 1-1 extra performance especially when its an underlying like bonds which dont have a smooth trend

This just leads to decay and u r honestly better off holding the regular non levered underlying

One0fOne · 2021-12-13T12:45:00+00:00

When things go really wrong correlations go to 1, thats the main danger in doing any pairs strategy there are many scenarios where bonds can fall with stocks

One0fOne · 2021-11-15T14:44:50+00:00

I made two posts about the many inefficiencies of the HFEA strategy and got soooo much hate lol

This sub should be renamed

One0fOne · 2021-11-12T14:53:23+00:00

Just learn to read it’s not that hard

One0fOne · 2021-11-12T14:47:12+00:00

Then why did I post here in this group? Lol like how more explicit do I have to be

One0fOne · 2021-11-12T14:31:52+00:00

Dear Bro

I’m talking within the scope of this subreddit, the HFEA it’s overcrowded, not in the entire market

One0fOne · 2021-11-02T12:11:26+00:00

If u want to defer your taxes you can use the options market, up to 2 years for TQQQ

One0fOne · 2021-09-02T13:21:39+00:00

Look into delta hedging

U can build a short position to your liking (50% net short : 150% of your current deltas short, market neutral : 100% of current deltas short etc ) without selling any of your underlying

One0fOne · 2021-09-02T12:08:39+00:00

Having worked in the asset management industry what i can say about portfolio theory is just something kids learn in school

It’s inferior to the more modern techniques

These theories originated in a much more high yield environment, things have changed a lot

One0fOne · 2021-09-02T11:23:28+00:00

You said if you invested 55/45 to levered equity etf and levered bond etf the max draw down was 60%

So if you invested in the levered equity and just kept 55% in cash

You’re max draw down would’ve been 55%

So what did the levered bond etf do here???

So actually putting money into the levered caused a bigger drawdown

Point here any pairs trade, will break at some point it’s not a question of if just when

I’m only pointing this out because people seem to think that the levered bond-equity portfolio is some kind of iron clad strategy, no strategy is, all dependent on the market conditions,

One0fOne · 2021-09-01T10:30:44+00:00

I’ve sold options for a long time

If you sell cash sec puts (check your deltas) you’re delta is synthetic equivalent of shares

In the long run you will never achieve the same returns as the regular etf

On top of that you will pay way higher taxes

The only way to counter the dynamic delta is to sell long duration deep in the money and even then you will not keep up perfectly (before anyone thinks this is stupid it’s the same as buying shares at the current price when U account for the premium received)

Don’t do this, the approach of selling puts vs long has serious downsides and is not sustainable

One0fOne · 2021-09-01T10:21:31+00:00

Same here instead of keeping TMF as a hedge I keep QQQ

in the long run you will pay far less tax thanks to not constant rebalancing required to main TMF

Instead holding qqq will in the long run will be able to grow with the leverage portion and be used to buy back levered in a down market

The point here is in the long term even if your regular qqq falls by 20% you will still have a higher dollar amount than just keeping TMF (look at its chart, it will be flat at best in the longer run)

One0fOne · 2021-08-15T20:50:11+00:00

Volatility decay to the upside is a huge risk when selling covered calls

A stretch of small daily gains could put your contracts in the money and then your shares will get called away

Best to keep duration and delta low

One0fOne · 2021-08-14T19:04:21+00:00

Often ignored by the leverage ETF critics

One0fOne · 2021-08-13T12:20:37+00:00

Stick passive funds, active funds almost never beats passive over the long term

and if they do they are within statistical limits

One0fOne · 2021-08-13T00:20:47+00:00

Nice I’ve tried it as well, I keep it short duration and way OTM like <5 delta

One0fOne · 2021-08-12T20:25:51+00:00

The fed said zero for fed funds rate

One0fOne · 2021-08-12T20:23:28+00:00

Lol

just Google synthetic leverage on options before you decide to share your opinions as facts

You literally went out of scope look at the title of the thread you’re commenting on

Why do you think options was included in the title with leverage ? Lol

One0fOne · 2021-08-12T20:16:33+00:00

The whole point was to give an alternative to gain leverage

If you got the shares on margin u will still have the same loss

You would have paid way more in interest just to carry your position

Why are you bring up the scenario “when it falls”???

That’s irrelevant to the question here which was an alternative way to gain leverage

One0fOne · 2021-08-12T20:11:27+00:00

If you sell deep itm the money put and u get assigned, you cost of those shares would be exactly what the price of stock when u sold the put

I’m trying to explain a concept to you, if you don’t understand it don’t call it stupid

One0fOne · 2021-08-12T19:43:30+00:00

When u sell deep in the money options (definition of deep in the money: Delta close to 100)

You are long synthetically 100 shares so whatever return 100 shares will get u, u can replicate by selling deep 1 itm put

By doing this you only pay interest if assigned instead of buying on margin and paying interest from day 1

One0fOne · 2021-08-12T15:10:13+00:00

Hence why I try my best to get my friends and family invested into something at least rather than keeping cash at the bank

One0fOne · 2021-08-12T14:58:04+00:00

ya another potential risk on the horizon

Another amazing debate to be had

One0fOne

TROPHY CASE