LEAPS PP

A place to talk about speculative investing ideas for the optional Variable Portfolio

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var
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Re: LEAPS PP

Post by var » Fri Jan 08, 2016 10:11 am

hi adam,

this my humble opinion... i do love the PP... however i think gold is dead i dont think it will rise again for at least 10 years... i can say that because this the variable portfolio...
i believe gold was useless around 2013... so if you took gold out your strategy i think your loses would have less.

yes you could do something simple like if spy down -10% jump in...


>Time decay really isn't as much of an issue with these as you'd think.  I buy these with two years to expiration and sell them with a year left.  Most of the time decay of an option occurs in the >last 6 months before expiration.  Also, I like to hold the positions for over a year for tax purposes (it might be a good idea to actually do this within in an IRA to eliminate the tax issue, but I >consider money in retirement funds sacred and don't like to gamble with it).

well i should really clarify you time decay and volatility implosion.....

if you have stockcharts.com account you chart $vix...  you buy when vix is under 12-12.5....  cause options will be dirt cheap then
2 things can make your options go up volatility.... and underlying price move....

so you need to factor in volatily...if i made enough gain... i am sure you watch it monthly or whatever...just cash in...
cause if volatility crashes you'd lose alot gain.

every time i bought a spy leap... (which is not too often) it usually moves like crazy when volatility moves up... you can check it with greeks... i dont want to get into a complicated options discussion...
long story short.... VOLATILITY moves LEAPS or any other long dated option.


>>I just don't believe in this in general.  I don't think it works with any investment.  Impossible for the average investor to time their investments. 

will see just for fun.. i jumped into 3k of UBT today....leg 1.... (which is a little late according to my charting...) yes its true for avg investor its hard to use charting....
i no expert... but its been working for me... support and resistance etc....

at some point when charts look good i'll buy some UPRO 2k UPRO to match... then sell it like 5 months so experiment... for fun of course..

when i mean't leverage ETF, i meant just buying them so i didn't have to worry about expiration... the only worry was UBT low trading volume... i guess it could close up at some point if it declined far enough...


>Ideas like this sound good, but in my opinion ultimately just cap the upside of the portfolio.

It actually makes it safer... you need to understand how naked puts selling work...  but its probably not something for the avg investor..
Its also not something i recommend avg investor due, you really need to study understand options before you try it...

i think keep it simple is the way to go with this strategy so i am going with UPRO and UBT.... or UPRO  or buy 3x TLT.....


>Time Decay....

yeah my only problem in a normal PP spy doesn't waste away into nothing.... so u need to buy more calls in a year?.
i guess you can rebalance more frequently....

my thoughts in a long enough time period 3yrs or so...

TLT or SPY is going to up or you'll be back to even....

the only time i am buying GLD if the banks collapse again....or some major disturbance in the US financial arena....
looking in hindsight...it looks like the USA.... single handedly pulled the world out of depression... and bernake was right to all the money to get us out....
Full disclosure: i was totally wrong... i thought gold was going to go up till at least 2020.... i had the opposite view....

anyways i really like your strategy... you have balls just for even trying it!!!  that goes for anyone else who tried it, i didn't read the full thread...

i trade options mostly.... then i got Mutual funds for the rest... i use charts alot too...  right now i don't even look at the finance news which seems to be working for me...
that's my stock trading background...

hopefully you keep us posted monthly on your option progress... and i'll keep up the notes on the leveraged ETF use.... 
this should keep the variable portfolio forum interesting!!

-var
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AdamA
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Re: LEAPS PP

Post by AdamA » Sat Jan 09, 2016 8:20 am

var wrote: this my humble opinion... i do love the PP... however i think gold is dead i dont think it will rise again for at least 10 years...
That may or may not be true.  But if you look back at the bear market of 80's and 90's, there were still years where gold had positive returns.
var wrote: Hopefully you keep us posted monthly on your option progress...


I'll post updates from time to time. 
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Re: LEAPS PP

Post by var » Sat Jan 09, 2016 4:13 pm

when did you buy your new set of LEAPs for 2016?
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Re: LEAPS PP

Post by AdamA » Sat Jan 09, 2016 6:53 pm

var wrote: when did you buy your new set of LEAPs for 2016?
December 30th.
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Re: LEAPS PP

Post by var » Sun Jan 10, 2016 12:30 pm

AdamA wrote:
var wrote: when did you buy your new set of LEAPs for 2016?
December 30th.
hmm... vix was about 17... so premium might have been a little high...

so what the strategy just hold till next dec 2016 and sell?
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Re: LEAPS PP

Post by var » Sun Jan 10, 2016 12:34 pm

i back tested the spy and tlt 50/50 strategy with the simba spreadsheet... and it looks decent...

opinions?


i think with 3x ETF decent gains can be made.. or possible LEAPS...

but i think if i do LEAPS i would just be really careful wait to for the option
premium to erode before jumping in...
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Re: LEAPS PP

Post by AdamA » Thu Jan 14, 2016 7:16 am

var wrote: i back tested the spy and tlt 50/50 strategy with the simba spreadsheet... and it looks decent...
With options???
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Re: LEAPS PP

Post by var » Thu Jan 14, 2016 8:22 am

no just the looking at the mutual fund returns themselves..

with options no... will see if the opportunity presents its self i might jump in...
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Re: LEAPS PP

Post by sk55 » Wed Feb 03, 2016 12:41 pm

AdamA wrote:
var wrote: i back tested the spy and tlt 50/50 strategy with the simba spreadsheet... and it looks decent...
With options???

adam

how are you long bond leaps doing?
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Re: LEAPS PP

Post by AdamA » Sat Feb 06, 2016 3:36 pm

GLD position is up 56%
TLT position is up 49%
SPY position is down 49%

Altogether it's up around 19% for the year so far.
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Re: LEAPS PP

Post by JayT » Tue Feb 16, 2016 5:27 pm

Adam, my apologies if you've mentioned this already, but where do you track your LEAPS PP performance?

I have a LEAPS PP and I am tracking it in Yahoo! Finance Portfolios.  It is very inaccurate though, since the portfolio takes the last traded price (and not the current bid or ask price) and the last price could be very different from current price.
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Re: LEAPS PP

Post by var » Tue Feb 23, 2016 6:36 pm

prob the best way to do it set up ameritrade account...

then enable paper trading with think or swim... (quotes are delayed, unless you have enough cash in ur trading account)

thinkorswim got the best interface for options.
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Re: LEAPS PP

Post by JayT » Wed Feb 24, 2016 6:56 pm

var wrote: prob the best way to do it set up ameritrade account...
Var, thanks for the suggestion.  Unfortunately that's not an option for me right now, so I will stick with Y! for a while.  Since it's only 3 calls I can also calculate returns manually once in a while.
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Re: LEAPS PP

Post by AdamA » Tue Jan 03, 2017 10:08 pm

Here are the 2016 results:

12/30/15

TLT 7 Jan 2018 Calls $5544
SPY 3 Jan 2018 Calls $5251
GLD 5 Jan 2018 Calls $5488


1/3/2016

TLT $3616 -35%
SPY $7135 +36%
GLD $6347 +16%


Start Finish
$16,283 $17,098


Total $815 (gross 5%) *.15% (capital gains) = $693 (net 4.3%)


At one point this year the portfolio was up over 100%, when both gold and bonds more than doubled. Started to dip around August, and then really tanked after the election. Still had small gain though.

2013 2.7%
2014 62%
2015 -58%
2016 4.2%
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Re: LEAPS PP

Post by Kbg » Wed Jan 04, 2017 9:17 pm

I enjoy these updates. Thanks for posting them!
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Re: LEAPS PP

Post by buddtholomew » Thu Jan 05, 2017 1:36 pm

AdamA wrote:Here are the 2016 results:

12/30/15

TLT 7 Jan 2018 Calls $5544
SPY 3 Jan 2018 Calls $5251
GLD 5 Jan 2018 Calls $5488


1/3/2016

TLT $3616 -35%
SPY $7135 +36%
GLD $6347 +16%


Start Finish
$16,283 $17,098


Total $815 (gross 5%) *.15% (capital gains) = $693 (net 4.3%)


At one point this year the portfolio was up over 100%, when both gold and bonds more than doubled. Started to dip around August, and then really tanked after the election. Still had small gain though.

2013 2.7%
2014 62%
2015 -58%
2016 4.2%
Hey AdamA, what are you learning from your results?
Sorry, haven't kept up with this thread for a while.
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Re: LEAPS PP

Post by AdamA » Tue Jan 10, 2017 12:10 pm

buddtholomew wrote:

Hey AdamA, what are you learning from your results?
Sorry, haven't kept up with this thread for a while.
That the assets are volatile. ;)
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