HarveyParticipant04/19/2015 at 1:38 pmPost count: 3
I just signed up for the UIS portfolio, and looked at the most recent (April) recommendation.
I see no recommendations for trading the long 3X ETFs, eg TMF and SPXL.
Do I just use the same allocations as for SPY and TLT?
There are recommendations for shorting the corresponding Bear ETFs, but I’d prefer to avoid the problems with short unavailability.
Also, you discuss option trades as alternatives. Wouldn’t the appreciable bid/ask spreads eat into profits?
If not, Do you recommend buying deep ITM calls to simulate buying the ETF, or selling deep ITM Puts?
With the options, is there any reason to prefer the Bull or Bear ETFs?
Alexander HornKeymaster04/20/2015 at 1:00 amPost count: 386
the 3x UIS signals are available in the first table “Strategy signals as Overview” here: https://logical-invest.com/blog/subscribers-only/
As we’ve p8ublished the strategy after month start, we’ve not yet included them in the “Consolidated Signals and Shares” below that table, but will do so before May signals go out, then also with the signal email as for the other strategies.
The shorting 3x bear will be discussed in Part II of the article, currently working on it, but miss the historical borrowing rates and availability – as you point out these are the crucial topics to be discussed.
We generally do not publish specific option variations, this is something only a few followers show interest in, and has a very high level of complexity – especially if one would try to backtest these.
Let me know if this helps,
HarveyParticipant04/20/2015 at 1:35 amPost count: 3
Since you are or will be recommending shorting the bear ETFs, and since there ARE problems with shorting, is it possible that shorting ITM calls, or buying the puts would be an alternative?
To what extent would these erode the returns?
I really joined Logical-Invest expressly to use this strategy, and I’m disappointed to find that you do not appear to be prepared to support it at this time.
Would it be best for me to quit now and rejoin in a few months when you have your support in place?
Alexander HornKeymaster04/20/2015 at 5:20 amPost count: 386
let us first do the analysis on shorting the bears, do not want to jump into conclusions how often and with what sucess the borrowing cost and availability made this feasible.
What we’ve done so far is giving a general statement when we would use ITM and OTM options, but not each month which strikes, contracts, etc. Backtesting a strategy with options is very complex as you need all historical option chains, so we’ve not done that yet – and do not have it on our short term list due to low number of requests and own interest.
Means you can execute the strategy using options, but without the support of an historical backtest and determining the strike prices by yourself based on the ETF signals.
Maybe you give it a try to get comfortable, and then judge whether you opt for using our 60 days money-back guarantee.
Sorry if this is not what you expected, but I’m rather straight here to avoid false expectations.
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