Why My Investment Time Horizon is Shifting

Why My Investment Time Horizon is Shifting

Posted On April 20, 2022 12:56 pm

This week, I’m spending time with my father, the trading manic, deep in the Tennessee woods. At age 14, he got me my first job in this business as a COMEX runner. I literally ran all the handwritten orders into the ‘pits’ of the screaming brokers.  And I must say, I was enthralled by the energy and attracted to the remuneration. 

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However, for some reason, upon college graduation, I tried avoiding the ‘family business’ by working at an advertising agency. After a year, I realized that selling and marketing wasn’t for me.  If someone said “no,” I said “OK” and hung up the phone. Haha.  So, I quickly got back into trading. 

I started as a clerk on the trading floor, then as a proud badge-wearing buccaneer, slinging everything, soybeans, corn, and bonds on the Chicago Board of Trade (CBOT).  I also had a badge as a member of the both Chicago Board Options Exchange (CBOE) and Chicago Mercantile Exchange, welcoming the engagement of my young legs sprinting back and forth across the tube connecting the two trading pits.  

From there, I moved to NYC. Then eight years ago, I moved to Florida. But, my Chicago Mercantile trading style remained the same: Find a good/risk reward set up and ignore the daily noise. 

 The idea of movement, for its own sake, be it momentum or meme stocks, may play out longer than expected. However, ultimately fundamentals will matter. The issue is, as the old saying goes, the market can stay irrational longer than you can stay solvent. 

It now seems, with the Fed on a path to normalizing monetary policy and the possibility of a recession looming, that valuation and rationality are returning to the market. 

Over the past few months, the Options360 Concierge Service has been tilted toward short-term trades with a high degree of leverage.  I may now shift back toward a longer-term (2-4 months in the options world) for new positions in the coming weeks.  I now want to see the forest through the trees and catch some larger trends.  

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About author

Steve Smith

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.