Slope of Hope Blog Posts

Slope initially began as a blog, so this is where most of the website’s content resides. Here we have tens of thousands of posts dating back over a decade. These are listed in reverse chronological order. Click on any category icon below to see posts tagged with that particular subject, or click on a word in the category cloud on the right side of the screen for more specific choices.

Hedging Update (by Dave Pinsen)

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A month of closes over 30 for the VIX

The VIX rose 2.82% on Thursday, closing at 34.32. Since the market meltdown of August 5th, it hasn't closed below 30 on any day. Something I've mentioned in previous posts, when the VIX was below 20 (e.g., this one) is that long investors ought to consider hedging when volatility is low, and hedging costs are relatively low as well. Since August 5th, that hasn't been the case.

Hedging Update

The table below shows the costs, as of Thursday's close, of hedging a basket of stocks and ETFs against greater-than-20% declines over the next several months, using optimal puts (if there are any optional stocks or ETFs you'd like to see added for future updates, feel free to mention them). First, a reminder about what optimal puts mean in this context, and a step by step example of finding optimal puts for one of the ETFs listed below (GLD). 

 

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How Tim Saved the Day

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I'd like to tell you about my trading day. It was a profitable day – – not wildly so, but profitable nonetheless – – but I think I learned at least one good lesson today that is worth sharing.

As a preface to this little tale, I'd like to provide a few quick reminders:

1. I greatly prefer the short side of the market. This is a curse and a tragedy, but it's how I tick. For whatever reason, I am put together in such a way that I'd rather be short a given security than long. I think I'm old enough to recognize that this is just who I am, and thus, Slope tends to have a very bearish bias.

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Chart to Watch – WFM (by TraderHR)

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Whole Foods Market, Inc. (WFM), which has been in a sideways trading range between 54 and 67 since early this year, jumped 2.32, or 3.6%, Wednesday to close at 66.85. That's just slightly below key $67 resistance and a multi-year high. We could see a breakout above that area if the market continues with its recovery.

If a breakout occurs, the next move could take the stock between the 69.50 and 71.50 areas. Preferred entry price is 67.55 with a stop at 64.80.

WFM
Originally published on TraderHR.com.