Since SVIX is down about 9.41% as I write this I wanted to do a check in on the SVIX via VXX put strategy. Today C2 is showing the strategy currently down about 6% per the C2 dashboard. So I want to do a little check in to see how the strategy is doing.
Continue reading “SVIX via VXX Put Update”Category: Uncategorized
Actually Pretty Good
IMHO the highest probability of success for most investors is a buy and hold mix of index funds, assuming they can remain consistent. However, if people are willing to take on more risk and shoot for higher returns there may be strategies that make sense and can maybe yield a higher overall return – most likely with more volatility than the market.
Continue reading “Actually Pretty Good”SVIX vs VXX Puts
I like the idea of being able to use VXX puts instead of holding SVIX. Either method let’s me bet on volatility declining which can be a very helpful piece of a larger portfolio. However, I am not yet comfortable using the option version with large amounts of real money. So, I started a Collective2 strategy that would allow me to test the effectiveness using live go forward data. I have been running the strategy for about a month now.
Continue reading “SVIX vs VXX Puts”Bitcoin with Leverage
This is a quick and dirty early analysis that neglects the cost of leverage. I just wanted to get an idea as to whether this is even worth looking into. I recently became aware of BITX a 2X Bitcoin futures strategy and that Robinhood has generous margin requirements for BITO a 1X Bitcoin futures strategy. So this is a quick look at using leverage and investing in Bitcoin in the past.
Continue reading “Bitcoin with Leverage”BITO Option Replacement Lookback
(Edit: I believe I did discover a big cause of the discrepancy – dividends on BITO. ThinkOrSwims thinkback tool was showing numbers without dividends.)
Back on November 12, 2022 I made a post on the collective2.com forums about how I thought Bitcoin could be at a good buying point. I think whether Bitcoin succeeds or fails in the long run it will likely have reduced volatility eventually. However, I found that each time after Bitcoin dropped 70% the next 2 year return was an average of 2,595%. I don’t expect that to be the case, but I think the odds of a decent return are good enough to throw some money at. Since I made this point a little less than a year ago the return on Bitcoin has been about $27,157/$16,746-1 = 62%. That ain’t bad! But I wonder how would I have done had I replaced by Bitcoin purchase with BITO options back in November 12, 2022.
Continue reading “BITO Option Replacement Lookback”BITO Options Still Weird
A new expiration of BITO options recently became available. The January 16th, 2026 options with 849 days to expiration are now available, and I am considering buying some in my funny money account. BITO does have the downside of a management fee and futures costs. However, it has tracked the price movement of Bitcoin remarkably well over its almost two year existence.
I was looking at the call options and quite amazed at the tiny jump in ask price from a 10 strike to a 9 strike. I bought one contract at $5.65. I couldn’t get it to go any lower. The intrinsic value at the moment is $4.98 leaving only $0.67 in leverage cost to capture the price movement of an extremely volatile asset for over two years. That seems like a great deal to me. That is an about 5% cost (0.67/13.98) spread over the course of over two years. Meanwhile I only have to outlay about 40% of the capital leaving the other 60% to allocated to my algorithms and other investment models. Obviously there is risk that Bitcoin will perform poorly. Other than that this seem almost too good to be true. What am I missing?
VXX Put Credit Spread to Long SVIX
So far I have been lucky and yesterday’s VXX put credit spread has gone well since have seen a drop in markets and increase in volatility today. However, I don’t see a strong reason to believe that the drop is going to stick around – not saying it couldn’t. So now I am looking at buying some SVIX which fits my overall long bias on short vol.
Continue reading “VXX Put Credit Spread to Long SVIX”Low VIX Trade
The VIX is roughly at the lowest price it has been since before the pandemic.
The ETF VXX though tied to the VIX is not a direct bet on the VIX but 30 weighted VIX futures. Because volatility is so low at this moment in my fund money account aka Robinhood I am placing a VXX put credit spread. If volatility continues to drop there the rest of my larger portfolio will be very pleased. This short credit spread is designed to make some money as long as volatility doesn’t drop dramatically in the next week.
Disclaimer
This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.
The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.
Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.
Hardest Year in 50 Years
I have to keep reminding myself 2022 was not the norm. After over four years of trading my strategy Patience is a Virtue the results are really good. I did have a roughly 53.8% drawdown in that time, but my annualized rate of return is still sitting at 34.6% per collective2’s calculations. Those a great returns especially when you consider the fact that I did it inside a Roth IRA and paid no tax on those gains.
Despite this it is always tough mentally to not be at a new high. It has been over two years of not having a new high. That is a long time and it is mentally draining – especially when I have followers that likely are in similar situations. Despite this I remain focused.
2022 was an exceptionally bad year. Using this free backtesting tool we can see that 2022 was the single worst year for 50% stocks and 50% 10-year treasuries in the entire history that this backtesting tool has available.
My strategy obviously isn’t just buy and hold stocks and 10 year treasuries. However, my strategy does rely on similar instruments quite heavily with more leverage. When I remember that the 53.8% drawdown occurred while using leverage during the worst single year in over 50 years suddenly I don’t feel so bad. To still have a 34.6% annualized rate of return over the last 4 years and a roughly 50% return this year makes me feel quite justified with my strategy. I certainly reserve the rights to be wrong. But man this seems like a winner of a strategy for me.
Disclaimer
This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.
The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.
Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.
Discounted BITO Options
As I have mentioned in some previous posts I have been looking at reducing how much money I have tied up in Bitcoin. However, I still want to keep similar price exposure for now. First I sold all my Bitcoin for BITO which has very similar price movement. It does have the downside of an expense ratio and futures drag. However, it should be helpful in keeping price exposure temporarily.
The main benefit of BITO is that it is marginable. So I can easily withdraw cash from my broker to fund IRAs, SEPs, HSAs, etc. Also BITO does have option chains. I have been looking at the 6/20/2025 expirations since they are far out and would benefit from lower tax rates if I held to expiration and the price moved in my favor. When looking at the option chains I did notice that some of the option ask prices didn’t make much sense. So I took the screenshot below.
The ask price for the $14 strike is less than the $15, $16, and $17. Now for a real good arbitrage opportunity I would need the bid and ask prices to be out of whack enough to make a guaranteed profit. For example, if the $15 bid was more than the $14 ask. This is not the case. So I didn’t see any great arbitrage opportunity.
However, my goal is to free up capital and with the ask as low as it was on the $14 strike this seemed like a decent strike to pick. Dealing with options this illiquid can make you lose some market value pretty quickly. I couldn’t get the order to go through without meeting the $2.60 ask, and immediately after the Robinhood software then marks the value down to the mid price of $2.16. If I wasn’t planning to hold this option likely to expiration this could be a problem but for now I will just accept that on my return today it shows a near immediate $572.00 loss due to the 13 contracts being bought at $2.60 and valued at $2.16.
So far it still seems like a good deal for me. Anyway I have now liquidated all my Bitcoin and BITO and am holding only BITO options. I have about $7,505 tied up in these options instead of the roughly $28,000 I had tied up in Bitcoin. Now this gives me funds to invest in other ways that are hopefully uncorrelated. Should Bitcoin drop perhaps I can buy more and if it rises perhaps I won’t miss out too much.
Disclaimer
This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.
The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.
Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.
How I Invest 