Basic Strategy to earn 10% yearly?

[jarjar]

http://www.investopedia.com/terms/c/cagr.asp << Who the hell writes like that, that diagram looks like multiplication not a power.

Also it seems you need to use the amount you invest instead of the price of the stock.

 

[Sergio77]

Is there any simple strategy to earn ~10% yearly? I would be happy to outperform the bank/GIC while KISS.

Buy low, selll high.

 

[esc_trader]

sell deep otm puts on something that must mean revert
bonus: you don't need to look at this trade all year

more risk averse you should trade more frequently. risk = total amount of time overall you are not completely flat. but this one is the simplest and lowest maintenance

 

[globalarbtrader]

sell deep otm puts on something that must mean revert
bonus: you don't need to look at this trade all year

more risk averse you should trade more frequently. risk = total amount of time overall you are not completely flat. but this one is the simplest and lowest maintenance

"sell deep OTM puts... and don't look at the this trade" I think this is the scariest advice I've ever seen on ET. I'd love to know what kind of assets must mean revert. Can you give an example?

GAT

PS You should probably read this

And if you have read it, read it again.

 

[esc_trader]

"sell deep OTM puts... and don't look at the this trade" I think this is the scariest advice I've ever seen on ET. I'd love to know what kind of assets must mean revert. Can you give an example?

I can't say I ever go completely naked you'll hedge. I've ridden stocks to 0 - terrifying (but a good learning experience!) https://www.sec.gov/Archives/edgar/data/723527/000093176303001862/g33902tx-53.jpg

Something VIX related won't go to 0, for instance VIXY has never been below 10. (I know the etns you lose on the roll etc..) World blowing up like LTCM makes this trade better. The bet is, VIX won't crash lower than its ever been. Again, hedge it off but you don't need to compound too many 1-2% gains to get to 10%.

 

[globalarbtrader]

I can't say I ever go completely naked you'll hedge. I've ridden stocks to 0 - terrifying (but a good learning experience!) https://www.sec.gov/Archives/edgar/data/723527/000093176303001862/g33902tx-53.jpg

Something VIX related won't go to 0, for instance VIXY has never been below 10. World blowing up like LTCM makes this trade better. The bet is, VIX won't crash lower than its ever been. My money's on another financial crisis or at least a recession in the next 5 yrs. Again, hedge it off but componding a couple of 1-2% gains during the yr gets you to 10% yr.

Okay that's actually interesting. Selling VIX puts is unusual - a 'pro crisis' trade that also earns you carry (theta in this case). The only problem seems to be that (a) deep OTM puts aren't very liquid and (b) naturally the premium pickup is very poor; I'm seeing bid ask of 0.05-0.15 on the lowest august strikes. It's also not obvious who would take the other side of this- who are the people who need to hedge themselves against the VIX falling?

I think these 'shouldn't go below 10' trades are rare though, and the few that do exist are going to get hurt in a crisis. I also think that naked option selling is dangerous, and reading your post that seemed to be what you were advocating.

GAT

 

[esc_trader]

Okay that's actually interesting. Selling VIX puts is unusual - a 'pro crisis' trade that also earns you carry (theta in this case). The only problem seems to be that (a) deep OTM puts aren't very liquid and (b) naturally the premium pickup is very poor; I'm seeing bid ask of 0.05-0.15 on the lowest august strikes. It's also not obvious who would take the other side of this- who are the people who need to hedge themselves against the VIX falling?

I think these 'shouldn't go below 10' trades are rare though, and the few that do exist are going to get hurt in a crisis. I also think that naked option selling is dangerous, and reading your post that seemed to be what you were advocating.

GAT

Honestly I say sell puts just to simplify.. Personally I'd do covered calls I don't sell options naked. If $VIX ever goes < 10 I promise I'm doubling down selling more calls.

 

[globalarbtrader]

Honestly I say sell puts just to simplify.. Personally I'd do covered calls I don't sell options naked. If $VIX ever goes < 10 I promise I'm doubling down selling more calls.

I realise that but the OP is very much a novice at finance and wouldn't have realised that there was some implicit hedging implied in your answer.

GAT

 

[fan27]

This is a strategy (combination of strategies actually) I use which averages better than 10% return per year.

http://www.fasterbull.com/members/strategy-portfolio-builder.html?id=22

I built the website/strategy myself and it took me awhile to come up with something that made sense to me and has a good track record.

fan27

 

[Sig]

This is a strategy (combination of strategies actually) I use which averages better than 10% return per year.

http://www.fasterbull.com/members/strategy-portfolio-builder.html?id=22

I built the website/strategy myself and it took me awhile to come up with something that made sense to me and has a good track record.

fan27

Impressive results right up until the last month when it looks like it took a 20% nosedive, or am I misreading it?

That's what I always end up with when I overfit in backtesting, great results all the way until I take it "live", i.e. forward testing.