Trading Strategies

The Era Of Complacency Is Ending

"The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of 'steady, low-risk income'... Nothing could be further from the truth..."

Volatility Makes A Comeback

"The strategy of selling volatility has been so profitable that promoters tout it to investors as a source of 'steady, low-risk income'... Nothing could be further from the truth..."

Axel Merk's 'Best Bubble Indicator' Is Setting Up For "Major Shock"

"In my experience, complacency, with its cousin low volatility, is the best bubble indicator I am aware of. Perceived safety gets investors to pile into investments that they later regret. When it happens on a massive scale, major market distortions may be created that can lead to financial crises. And as the tech bubble that burst in 2000 shows, even if there is no systemic risk, the unwinding can be most painful to investors."

SEC Halts Issuance Of Wall Street's Latest Mom-And-Pop Doomsday Machine: Quadruple-Levered ETF

Earlier this month we were somewhat surprised when the SEC blatantly ignored numerous complaints and approved a request to trade new quadruple-leveraged exchange-traded funds.  But, as it turns out, this latest digital slot machine may have skated through the regulatory process without catching the attention of SEC Commissioners because of a clever structuring tweak which resulted in it being presented to regulators as a commodity product rather than a traditional mutual fund or ETF product.

There Is Now A Quadruple-Leveraged S&P 500 ETF

On Tuesday, the SEC ignored numerous complaints, and approved a request to trade quadruple-leveraged exchange-traded funds, the first product of its kind, and one which will spawn hundreds of copycat immitators promising even greater possible returns and instead delivering theta that is guaranteed to wipe out virtually anyone who allocates capital to the product.

Financial Market Insurance Is Not Like Hurricane Insurance

"..the hurricane is not more or less likely to hit because more hurricane insurance has been written. In the financial markets this is not true. The more people write financial insurance, the more likely it is that a disaster will happen, because the people who know you have sold the insurance can make it happen. So you have to monitor what other people are doing.”