Financial Letter - August 4th, 2019
235th Issue (since 01/24/2015)
CKL Inc. offers presently to his customers a portfolio based essentially on performance (0.9/10): the 0.9 indicates the annual administrative % cost of management; the 10 represents the 10% of management fees on the gains above the high-water mark. The portfolio is made by only one ETF US plus options strategies of the US market. This style of portfolio requires a capital of 250,000US$ or equivalent in CAD and the level 4 in options negotiation.
It is now available on Kindle and on other electronic reading platforms in French a short manual on the Day Trading. The title is: « Le ‘Day Trading’ ou La négociation sur séance (1) », written by Charles K. Langford and Audrey Parent Thibeault.
It is available on Kindle and on similar electronic reading platforms, in French, a short manual on the put/call ratio. The title is: « L’antagonisme entre les options put et call: l’analyse du put/call ratio », written by Charles K. Langford and Laurence P. Darveau.
The book “L’alchimie qui crée l’or – Le chasseur de tendances boursières II” is online (Amazon.ca and the title) on Kindle. It is in French. The book is a “bestseller” in the category business and finance. It's also available on all other readers platforms (Kobo, iBook, etc.).
A second book is available on the reading software like Kindle, Kobo, iBook, etc. Its title is “The Trend Hunter” and it is in English.
The website of Charles K. Langford Inc. is : www.charlesklangford.com
Market Risk (Systematic Risk)
The market (S&P500 Index and its derivatives) was down 3.1% this week, due to the uncertainty about the negotiations between China and United States.
For our clients in the active trading portdolio (CKL 0522), the following covered call option stategies were done:
Week of the 29th of July, 2019
We shorted calls in the Covered Call Writing strategy where UPRO is the underlying product.
- 16 Short Calls 2019/08/02 (58.50) @ 1.08 July 26, 2019
- Buy back of the 16 Calls 2019/08/02 (58.50) @ 0.51 July 31, 2019
- 16 Short Calls 2019/08/02 (58) @ 0.45 August 1, 2019
- Buy back of the 16 Calls 2019/08/02 (58) @ 0.10 August 1, 2019
- Purchase of 400 shares of UPRO @ 53.15 August 2, 2019
Profit of the week on the closed positions
$US 928 profit on the 16 Short Calls ((1.09 – 0.51) * 16 *100)
$US 560 profit on the 16 Short Calls ((0.45-0.10) * 1600))
Total profit of the week for the covered call startegy = 928 + 560 = $US 1,488
UPRO closed at $US 53.60 on Friday August 2.
The following chart shows an increased volatility of the SPY, but there are no indications, technical or fundamental of a downturn.
The Langford Management
Presently our investments are in ETFs and ETN offering a high return, with a dividend yield between 5 to 10 % per year, at pro rata temporis, monthly. The market has a positive bias. We don’t think for the moment to change the allocation because also the products with higher returns are also bullish.
In the USD accounts, still we have cash in the form of FLOT, MINT, NEAR. In the CAD accounts, it is PSA or the equivalents. In the average, our portfolios are invested 60% in revenue and 40% in directivity.
In some, more aggressive accounts we have increased the capital synthetically with option strategies to profit of the upward momentum. In accounts that allow futures markets, we have futures contracts in long position on stock indexes.
Our portfolio management is always ad hoc, for each client. But also, we offer now five standardized mini-portfolios for clients interested:
- Bullish aggressive
- A contrarian as a hedge or profit
- Bullish and dividend oriented
- Against inflation
- Bullish, aggressive on non-traditional assets.
(The portfolio management fees of Charles K. Langford Inc. is 0.9% of assets, per year (equivalent to $900 per $100,000). The capital under management is invested exclusively in ETF, ETN and options)
Among a group of selected stocks and ETFs, this week we have middle- and long-term buy signals on the following stocks and ETFs.
TREND FOLLOWING
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Middle-term bullish |
Long-term bullish |
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Canadian Market |
ATE.V |
ATE.V |
About Options
Investors that believe the current Canadian market offers interesting bullish opportunities, they can buy the call BCE (stock closed Friday at $60.97) September 20/58.00 @ $3.25 whose delta is 0.90 and gamma 0.07 (accelerator of delta). This call will offer a profit of 90% of the stock increase at a cost that is about19 times lower than the present price. If the stock goes down, the maximum loss is the premium.