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Why I Tripled My Volatility Index Short
It has been quite a hectic and frenetic day, so I am just getting around to writing out the logic behind today’s short cover of my November (VIX) $35 puts. Basically, I was betting that once the S&P 500 hit the first technical downside target at 1,065, a long overdue and furious short covering rally would ensue. This was when the (VIX) was trading just shy of $46.
This was not only an important Fibonacci level, it also showed up in the technical models of several different persuasions. Such a rally would cause the market volatility to plunge, (VIX) to collapse, and the $35 puts to soar.
By closing out my short $35 puts which I used to lower the cost of entry on the (VIX) bear put spread, but keeping the long side in the $40 puts, I was tripling my bet that volatility would fall. In options argot, I jacked up the delta on the position from 10% to 38%, making it much more sensitive to market movements, something you always want to do when a position is about to make a sharp turn in your favor.
That is exactly what we got. After covering my short, the (SPX) rocketed by 65 points, and the $35 puts squeezed up from $2.20 to $3.50, a pop of 59%. The long puts I kept jumped 42% from $4.80 to $6.80. The (VIX) went out today at $37.72, some $5 down from where I made my move. This enabled my Macro Millionaire virtual hedge fund to post a year to date gain of 40.87%, a new all-time high, and the first time over 40%. This is how it’s done.
I don’t know if any of you have noticed, but I have now posted 17 consecutive profitable trades for Macro Millionaire over the past two months, and I will be gunning for number 18 tomorrow. I don’t do this very often, but it has occurred before. I have been working my ass off trying to clock as many profitable trades as I can while trading conditions are ideal. Wait for crappy trading markets to take those extended European vacations, as I did earlier this summer.
It just so happens that my particular strategy and philosophy on risk control are ideally suited to these kinds of extreme, choppy conditions. It was a skill that I developed trading the horrific Japanese bear market of the nineties. I have been able to do this while many of the largest hedge funds have been put through a meat grinder, with Q3, 2011 stacking up as the worst in 15 years for the hedge fund industry. I never was much of a joiner.
For those who wish to participate in Macro Millionaire, my highly innovative and successful trade mentoring program, please email John Thomas directly at madhedgefundtrader@yahoo.com . Please put “Macro Millionaire” in the subject line, as we are getting buried in emails. Hurry up, because our software limits the number of subscribers, and we are running out of places.
To see the data, charts, and graphs that support this research piece, as well as more iconoclastic and out-of-consensus analysis, please visit me at www.madhedgefundtrader.com . There, you will find the conventional wisdom mercilessly flailed and tortured daily, and my last two years of research reports available for free. You can also listen to me on Hedge Fund Radio by clicking on “This Week on Hedge Fund Radio” in the upper right corner of my home page.
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I have a very strong stomach, but for many reasons the author would not understand, this post makes me want to puke.
Carry on, America.
Here is my trade rec and its FREE:
I sold FAZ at $78.....bought back at $59, will buy more and more to $52.....will sell at about $65 then buy FAS at around $9 and sell at around $13 and buy back FAZ at around $52 to $47 and hold for >$81.50 or possibly $135 pending how far wave 3 dives..... Timing? No fucking clue....i follow my very simple indicators for buy/sell and time varies (on fibs).
I state this with the very fact that I've been wrong many times in the past and won't boast of 17 positive trades or ask you for your subscription money!
Chuckle!
With Phoenix, Reggie and MHFTR....if they're so good on trades, why don't they invest all their time/effort in making money for themselves and not off of others by soliciting subscriptions? It's the same as...If the stock broker has such profitable info and hints, why does he need clients?
The truth of the matter is they are all....HUMANS! They screw up huge on some trades....take baths...in lye and soap! That's why they need subscribers to pay them since it's their real and often times only profit.
They'll give you a month free access to their subscribers lounge... or a few seemingly profitable trade recs....however, if you actually count every one of their trades....none of them will be actually beating the S&P in a 5 year track record.
Also, if you have three chimps throwing darts at a list of stocks and compete those results against Reggie, Phoenix and MHFTR....gues who'll win?
The Fuckiing Monkey!
Sorry...the FUCKING CHIMP!
Better yet, why don't they make their subscriber area completely free! If they're so rich and raking in money from their own trades, they don't need subscribers....just donations! Yeah! Have it free like the bloggers and just ask for donations from those who actually profited from their recs.
Then they could be like www.thechartpatterntrader.com and ask and begg for monthly donations....actually grovel for donations! Ever wonder why chartpattern trader gets little donations? His calls SUCK!
madhedgefundtrader@yahoo.com
Dude,
Get a fucking real email adddress...Yahoo? Really?
Loser
Here's something of value: "all particpants in Fast Money will have their YTD performance totals listed underneath their physical personages." I mean Hewlett Packard? REALLY? How about "Los Angeles" then? (Ticker symbol "LA".) CNBC really does more than just a disservice when the daytraders aren't being informed that the people their picking stocks from havn't had a winner in over two years. And then they wonder "where's the retail investor?" GEEEE? GO FIGURE! They're flat phucking broke you morons! So again i ask: "what do they do with all that free time?" Hmmmmmm.......
overbought short cover rally. should unwind friday/monday,
Is my son the only one who follows this schmuck?
when do i get a face?
Do you ever trade Google? Or Apple?
I only trade real paper.
Impressive, indeed. Here's what I'm finding success doing through this economic turmoil. Today, I saved or created another job! It was the 279th straight day this year that I have shown job growth. I did this by following an amazing economic principle I call GUGTW, also known as Get Up and Go to Work. It has been shown to be a very profitable method of making money.
actually you'd be suprised at how profitable not getting up and not going to work is too. (NGUANGTW). "Cheating" i think it's called. I'm looking forward to trying it sometime but for some reason my i-phone isn't working right. The "i see you too" button has stopped functioning.
.
I'm long ENE.
People who are trying to benefit from the sick and destructive system are guilty of trying to keep the system alive. Stop prolonging the disease and start a new world. Buy physical gold and/or silver and destroy the cabal.
That's right I did it again. Last night as I was walking around trying to find a midget transvestite to transact with for services, I realized that I didn't have any money for such services. What was I to do? That's right...think of a brilliant trade. I thought to myself, what is the best lock trade that I can make instantly so I can get on to my business with a midget transvestite.....so I short sold futures that mars would destroy earth by 12:01 am....I quickly called my broker to place the trade (It's 1145 at this point), but fuck he wasn't there....what was I to do....luckily I was by the mentally ill joint ( similar to one flew over the cuckoos nest) and I knew I could one of those fellas to take the other side of my trade. I quickly wrote up a 700 trillion dollar deravitave contract ( single handedly doubling the outstanding deravitaves contracts in the whole world ) and found the other side of trade named Needle at the poker table at the asylum. He signed at 1159. Mars had not destroyed earth 4 minutes later so I tried to collect my 700 trillion. Unfortunately, Needle did not have 700 trillion, but fortunately he did have a carton of smokes. I knew the perfect transvestite midget hookers.....this is my 37th successful trade in a row and I've only ended up with a bloody asshole three of those times. If you want to join my transvestite midget hookers trading club just email transvestitehookertraders@transvestitehooker.com Come along for the ride.
Wow. Today's Mad Hedge Fund Trader is Leo like in popularity.
Did ya know MHFT is a miwwonaire and he hunts wabbits? he also owns a mansion and a yacht! heheheheeh
everybody loves mhft...........we all do...........yep..........
..
I just trade the regular long index stocks on four things, and the double inverse shorts n them, for a total of 8 things (I should reduce that to total 6 I think). it's been working very well for me (actually I touch a bit more, but 8 primary
eem/eev, sds/s and p/ tlt. tbt, udn/uup
uco/sco, small stake general commodites cmd
sometimes I own a bit of both, other times market neutral for a bit until stopped out one way, other times building a position as the market movees one way or another. So I was buying long on the dips, selling on the ups, and buying intot he inveerse shorts, with buy stops, and stop losses set intot he computer so natter what way it ends up trading/ moving. been working for me,
I'ltrade the downward sloping channels unti they don't trade that way anymore, but the longs I buy at the end of the channlels won't sell unless the market drops, and the shorts will stop out if the market goes up. (meaning I am "neutral") at both ends of the channel, with tight stops
he makes no money, except off of subscriber sheep. virtual hero. quick! while supplies last! derpity doo.
That's real conviction and confidence, posting big gains in your virtual fund.
Come back to us when you can play with real dolllars and still hold a heavy hand.
Or better yet, pack a few extra bottles of water and go get more tips from the local drunks.
Excellent! I just sold TVIX the other day on a signal from my trading model - and just got another buy signal on my trading model today. Flip flops are relatively rare, but so is the volatility we are experiencing. . So - I bought more TVIX at the close.
2 weeks ago I sold my TVIX position for a whopping 1% profit and moved it to PHYS. I missed out on almost a double in one weeks time in addition to suffering through the gold sell off. Oh well. I'll get em next time. I don't want to be in the VIX at the moment. I'm keeping my play money in PHYS until I get more of a sure thing trade. Not interested in unnecessary risk. The only thing that sucks worse than being long in a gold correction is not being ALL IN during a gold break-out so we must preserver. Talk to me in a few months. Still in love with gold over here. Planning on a long marriage and not a one night stand or casual affair.
i just awoke from my coma since march 2009, did i miss anything?
"Is that your volatility index short, or are you just happy to see me?"
bring on the 4 gold stars pasted on the forehead of the mad hedge fund trader
flock that............he should have a big L on his forehead....
signed,
goldbug
Oh brother - the Macro tent dweller stikes again
I just closed out by crude long today for my 723rd straight winner, whew I am tired having to wiring all this money all the time. As a 30 year commodity tradeer this is my second best run ever. I am not as generous as MFHT as why do I need money from other traders and whd why would I want to let others in on my secerets?
Please MFHT, please send the list of the trades in your run and next time tell us what you are putting on as you put the trade on. Agreed with Alea, tool.
I personally find alot of my "tools" useful. Tool is too kind of a word for this hindsight expert.
Trading the vix is a fools trade. Madfucktrader, fool tool.
"If shit fits, wear it and be proud of the smell." Dick cheney.
i pull up his blog entries just to read the caustic comments submitted in response to the posting... great entertainment value.
its about that time of year again, isnt it? for the big MHFT expo and shitfest in new yick city....
Hilarious, I bet he does seminars as well.
he's coming down to Oz this month.
Is he bringing Simon "The Grass is Always Greener" Black with him?
You get burned hard. VIX will be 96 when Greecy defaults.
Interesting conundrum.
You can really take it in the rear if you leave your shorts up here.
I would not want to be short VIX right now unless I was also long KY.
Does this trade in any way come even close to covering your gigantic losses on AMR?
So - another ad. That's OK with me, but is it something where we can see the record of trades when they are entered, not after they're closed out. There's nothing precluding you from claiming only the successful "Macro Millionaire" trades in these posts. How do we know what you're sending to your now wealthy subscribers?
A legend in his own mind!
More bullshit from Baron Münchhausen.
Submitted by locohedgefundtrader
When I heard that VIX was erupting, I did what I usually do when Wall St is in trouble. I jumped into an airplane and flew over Wall St, making sure that it was still there. I also go into the local bar and talk to the bankers between bathroom coke and hooker breaks with my antennae out to detect any unreported problems.
For good measure, I threw a 3 piece suit and a few extra bottles of cognac into the cockpit in case I crash landed in lower Manhattan and had to take a taxi out. Please excuse my shaky prose, but it is tough keeping one eye on Wall St while keeping the other eye on commercial airliners arriving at LGA on the west river visual.
An investment of several appletinis with a local rogue trader revealed that CDS are proceeding full speed ahead, with bankers working nights and Sundays.
On the way out he gave me a limp dishrag shake with a hand heavy with lotion and soft as a baby’s ass. Once outside I immediately called an associate at Dexia who informed me that financial volatility was indeed done, and that prices were headed back up.
Awwww shit. Even I can’t stand myself.
I quadrupled mine after seeing the recent troop movements and preparations the military is making on US soil....
something BIG this way comes...
Shazbotz, could you link a URL to your statement please. I am interested in looking into your topic sir.
Have you told us after the fact about your last 17 winning trades, or have you only made 17 trades during this time period?
Madhedgefundtrader wrote:
Please put “Macro Millionaire” in the subject line, as we are getting buried in emails. Hurry up, because our software limits the number of subscribers, and we are running out of places.
This is the worst salespitch I've ever heard. I'ts the old: "Hurry up and call us because we're almost sold out!" line... which has NEVER made sense.
If you're almost sold out... that's good for you, right? You don't need to drum up more business, right? Because you're going to sell out as it is, right? Unless of course, you're full of shit.
if I was running a successful business and my newsletter software was limiting my upside I would "trade up" for some better software.
Why don't you make that purchase your 19th consecutive "successful" "trade"?