By: Steve Smith
Today marks the end of Q3 and, boy has it been a wild one. I know we all want 2020 to be finished. On the bright side, things can always get worse. It would behoove us not to reflect on this unprecedented yet opportunistic time, as it’ll provide us with the building blocks for a better future. Without further adieu, let’s try to view this strictly from a business perspective.
First and foremost, COVID-19’s impact has upended nearly every aspect of our business and lifestyle. Even more tragic, ending the lives of too many. The numerous challenges have been the catalyst for digital efficiency, which became paramount, given the government’s role of who shall live and who shall thrive. The clear result was many companies pivoting towards a digital, cloud-based model that could scale and become essential to their own survival (and I don’t use that word lightly).
I’m in danger of stating the obvious here. But, legacy firms such as Apple (AAPL) and Amazon (AMZN) accelerated their growth through existing channels while relative newcomers including Zoom (ZM) and Teledoc (TDOC) realized their five-year plan in mere months with their share prices posting 100% gains in that same time period. But alas, all this drama, such as the S&P 500’s 35% March collapse and its march to a new high in August, is now just up 2% year-to-date, as we enter the final lap of 2020. By contrast, our Options360 service has enjoyed a relatively stress-free annual gain of 32%! A huge difference on the right side of the money — if you ask me!
“Options360” Year-to-Date Profits (2020)
We accomplished this by sticking to our process. As the waves became increasingly larger and the horizon was less visible, we reduced the position size and tightened up timeframes. As volatility increased in August and September so did the option strategies that we applied. Specifically, we shifted from debit spreads (spending money to make a directional bet) to credit positions where you collect the premium and reap the benefits from time decay and if the underlying shares remain within a given, albeit wide, range.
It doesn’t take a genius to predict we will continue to see volatility in Q4 2020, with earnings season in October, the election in November, and the end-of-the-year positioning in December. So, if you would like to take advantage of this volatility, please join me as a member of my Options360 service.
Steve Smith have been involved in all facets of the investment industry in a variety of roles ranging from speculator, educator, manager and advisor. This has taken him from the trading floors of Chicago to hedge funds on Wall Street to the world online. From 1987 to 1996, he served as a market maker at the Chicago Board of Options Exchange (CBOE) and Chicago Board of Trade (CBOT). From 1997 to 2007, he was a Senior Columnist and Managing Editor for TheStreet.com, handling their Option Alert and Short Report newsletters. The Option Alert was awarded the MIN “best business newsletter” in 2006. From 2009 to 2013, Smith was a Senior Columnist and Managing Editor for Minyanville’s OptionSmith newsletter, as well as a Risk Manager Consultant for New Vernon Capital LLC. Smith acted as an advisor to build models and option strategies to reduce portfolio exposure and enhance returns for the four main funds. Since 2015, he has worked for Adam Mesh Trading Group. There, he has managed Options360 and Earning 360, been co-leader of Option Academy, and contributed to The Option Specialist website.
November 11, 2020
November 10, 2020
November 9, 2020
November 7, 2020