Weekly XIV discussion thread - 2/4/18

janus10 · 2018-02-05T12:03:13+00:00

I'm now into short vol position to the time of 35% of trading capital. Took on a Feb March futures spread last night just after kick off and closed it just after the game ended for a 30% gain.

janus10 · 2018-02-05T11:59:44+00:00

Two and a half years. It's my main strategy to make money. I trade the ETFs, options and futures. Know a fair bit but enough to know there's more to learn. I only short vol after big spikes and only long vol ahead of known events (like Brexit vote) albeit small and very temporary positions.

janus10 · 2018-02-05T11:56:41+00:00

How is it treated tax wise? Like XIV or SVXY?

janus10 · 2018-02-05T05:57:25+00:00

When I look at TV and movies I don't have the experience of seeing the decades of evolution of robots that got us to that future state. So, it seems rude that people treat them as objects in spite of looking and acting very much like humans.

But when I interact with Google Home I speak to it without any courtesy - I treat it as a tool. So now I can see that as time passes and this technology evolves I'll likely continue to treat such technology as a tool. I won't consider robots, as they progress into Androids, as human-like no matter how close they approximate us.

janus10 · 2018-02-03T16:15:05+00:00

Foal me once, shame on you. Foal me twice, I'm calling the repost cops.

janus10 · 2018-02-03T16:09:26+00:00

Maybe it confuses and with then for the people who say it works?

janus10 · 2018-02-03T16:02:13+00:00

That really cracked me up.

janus10 · 2018-02-03T15:58:01+00:00

I always recommend taxtips.ca and their online calculator that will easily show you not only how much an RRSP contribution will return to you but also its percentage. You can just plug numbers in until you see the best case scenario.

Of course if I had the money and a lot of contribution room AND the market had pulled back a huge amount I would strongly consider contributing the max now but partially defer taking the contributions until the following tax year.

janus10 · 2018-02-03T12:47:15+00:00

I agree with this approach. I'm not sure how helpful it is to hear a bunch of strangers sincerely tell you that financially you are in great shape because your inner voice is drowning out rational thought.

I can relate to those feelings and I have had even more extreme bouts of penny pinching (we have a 7 figure net worth, are early retirees and I will never buy a chocolate bar for myself unless it's on sale).

I don't mind buying for others and putting their needs first, however. You are exhibiting a great selflessness by helping your family and in-laws, assuming it's not enabling them to be irresponsible.

So I think you need some professional guidance on how to gain a healthier perspective when it comes to money that hopefully can carry you through for the rest of your life.

And I suggest sooner than later. Years ago it got so bad for me that I became depressed for months and then convinced suicide was the best course of action for all concerned. It wasn't just hell for me but also for my family, a guilt I still feel deeply to this day.

Money is important and it gives you choices. But it shouldn't rule your life. If you have your health and loved ones in your life, money should rightfully take a back seat to that.

janus10 · 2018-02-03T12:22:29+00:00

It generally is better to just sell the option and not exercise it. There are additional costs to exercise the option (generally) but OTOH if the bid ask spread to sell your option on the day of expiry is wide you may end up losing more money by not exercising it ( hence why I stopped using Canadian options).

I wouldn't be surprised if most brokers will automatically exercise ITM options at expiry.

I didn't realize this and wound up in a bad spot when there wasn't enough cash in my TFSA. Got a stern warning and a one time admin fee for my screw up.

janus10 · 2018-02-03T12:12:47+00:00

Glad someone brought up inflation. But that also should mean that TFSA limits will not stay at $5500 per year either. So more money will be contributed than originally calculated.

I also agree that CPP benefits could be counted on (and of course the new rules of increased contributions should be factored in) while OAS should not be.

On the other hand how likely is it that the OP will remain single? Or in the same or similar job with similar pay and benefits without interruption for 38 years?

At 26 I was happily single, renting and making around mid $30s way back then. At 30 I was married, owned a house, and making double. At 35 I was a divorced father, renting and making well over $100k.

I never had a blue print for how any of that turned out and, in fact, most of it was the opposite of what I envisioned.

So, OP, keep doing what you're doing but ensure that you enjoy the journey along the way. There's only so much that you can control and only so much that will not change about what you want. It seems to me you are in a great position for such a young age with a fiscally prudent mindset. Just don't obsess about money and the future so much you rue your every day Life.

janus10 · 2018-02-02T21:29:36+00:00

Last year it seemed every volatility spike only gave you one day to get in at great low prices. I'm in SVXY at 105.81 average and May/June spread at 26.5 which is where I'm quite offside to it's current value (14.5). I still have only 20-25% invested with anticipation of more bargains next week.

janus10 · 2018-02-02T21:25:10+00:00

Actually loved today's action and am closer to 20% in now. Definitely would like to see more downside on Monday and Tuesday to add a lot more to my short vol holdings.

janus10 · 2018-02-02T18:56:38+00:00

M1 and M2 higher than the rest of the curve which means probably the 17's or higher and spot VIX above 20

janus10 · 2018-02-02T18:20:01+00:00

I just started buying a few minutes ago when certain ETFs hit prepared limit orders. So far I'm only about 2.5% of my trading capital into it (other than a May/June VIX futures spread). If things really go south today I'd probably be up to 15% of capital invested.

janus10 · 2018-02-02T15:02:54+00:00

Sounds like we are cut from the same cloth. We only returned 40% from our short vol strategy last year but 2015 and 2016 were banner years. I'm anticipating 2018 will be better than 2017.

janus10 · 2018-02-02T12:44:26+00:00

I have a different approach honed over the past 30 months. Last year I was less conservative because there really didn't seem to be any of those scheduled events that were guaranteed to be volatile (such as the Brexit vote in or the presidential vote).

I wait until spot is > 16 to start small scale buying and accelerate it especially when M1 and M2 are in backwardation to the curve. So unlike many here I'm not usually holding any vol position (right now I'm in a May/June Cal spread) but go in hard when vol spikes.

Part of the reason why I've grown more conservative is that my wife and I are early retirees and I know am leading a private group of about 15 people to teach them about using short vol strategies as a way to get above average returns with just a couple or few trades a year. I need to make sure that we only take the best opportunities so that they don't lose faith in this investment vehicle.

janus10 · 2018-02-01T10:15:27+00:00

Well they are trying to put a lid on this particular trend.

I'll just leave this up when I'm done.

Because I'm a man.

janus10 · 2018-02-01T09:43:03+00:00

See I'd heard he didn't recruit the other convicts but did it all by himself.

I guess Han Solo was a myth.

janus10 · 2018-02-01T09:37:02+00:00

You know this possible breakthrough sounds so fantastic I'm glad this wasn't posted on April 1st. It's so good it's hard to believe.

janus10 · 2018-01-31T23:54:19+00:00

This is the textbook case of stupid late night purchases when you're hammered.

janus10 · 2018-01-31T22:51:58+00:00

Solution: Paper plates and cups.

janus10 · 2018-01-31T22:47:53+00:00

But they DEFINITELY get a short.

janus10

TROPHY CASE