I've had some questions about my strategy this year.
Frankly, a lot of things have changed in the market since last year.
Regulatory changes, such as PDT elimination and 24 hr trading potentially going into affect soon - these have increased volume and short squeezes to covid-era levels.
While higher retail volume is usually a good thing, combined with a now-oversaturated niche in short selling and a resulting spike in locate fees - the old ways must change.
I still think like a bear, but new data has showed some long potential.
In fact, yesterday and today were the only two days in my entire trading career where I was long micro caps across the board.
It's really a matter of using the data to determine your position within the small cap cycle, and forming a bias dynamically based on that.
It is not one size fits all anymore. Adapt or die.
I'm hoping my $IBIT and $MSTR short puts get assigned. $Bitcoin has been showing relative strength for weeks, whereas Gold and Silver have not.
Food for thought.
What a day. Up huge from my long $GLD and $SLV puts but structured it as a calendar spread with the short leg expiring next Friday. Had no choice but to cover 30% of the short leg as $SLV broke $75. Went long ODTE calls and puts near the bottom to hedge and got back to even with those.
The goal here is to do everything in my power to hold the long put leg until the rest of the short leg expires worthless, then cash in.
No expectations.
I still find it astounding that trading performance can be so well predicted by the quality and quantity of data in a backtest.
Account at nearly 400% now, in "the slot" of my earlier prediction.
We don't have to trade hoping to catch a "good market".
We can create our own.
A statistically realistic expectation of return for the short equity account(s) in 2025 will be some range between 200% and 400% return. I assume the market will remain choppy in 2025, in which case the low end is likely.
@nmay4us@MartinAustro My data is showing a down day is the most likely outcome. But, this is largely dependent on the pre market gap%. Larger gap up will mean higher chance or ending red but higher chance of a rollercoaster ride running over shorts before it gets there. Stops are key.
With stocks like $IXHL, the core components of my strategy require a price change trigger, a liquidity trigger, and a dilution probability trigger. How badly the company needs cash is an indication of whether to be long or short in the short term. But large or sudden changes in liquidity indicate WHEN to enter.
Profit/Loss today: -$58,925
While most of these losses were realized outside of the USIC account, it was nonetheless a difficult day across all accounts and strategies today. I expected some stops to be hit this morning, and indeed they were hit. Executing the system regardless of the premonition is what gives peace of mind. On to the next. I do, however, wish I had avoided 0DTEs today, which added unnecessary distraction.
Incredible chart $AREB. Weak news, share dilution at 2:30 today, price drops in half, then reclaims to new highs. Amazing they can find the liquidity to produce this move when the whole market is crumbling today. Leave it to short sellers to pump up the price.
Options pricing models consistently overprice the expected move. This can be easily proven. Options are, essentially, overpriced insurance policies. Unless you are great at predicting the future there is no edge in trading long options. Short options - that's another story.