Financial Letter - March 2nd, 2020
262nd issue (since 2015/01/24)
(1) We offer portfolio management services for futures market accounts with a minimum of 25K USD or the equivalent in CAD.
(2) CKL Inc. offers an actively managed portfolio with US ETFs combined with option strategies. This portfolio requires a minimum of 250K USD or the equivalent in CAD.
(3) And evidently we offer high quality long term portfolio management with low fees (0.9%). This portfolio requires a minimum of 100K CAD.
*No transfer of funds required.
For more information on any of these portfolios, write to us at info@charlesklangford.com.
Our next intensive courses:
- L' Analyse Technique (April 4th, 2020)
- Investissement stratégique dans les options (April 5th, 2020)
Fore more information on these courses visit our seminars page:
http://www.charlesklangford.com/en/services/seminars
To reserve a spot for these coures, write to us at info@charlesklangford.com
S&P 500 Index - The Center of the World's Financial Solar System
The S&P 500 index (SPY and derivatives) suffered a historic loss of 11.5% last week. The increasing global concerns on the Coronavirus (COVID-19) triggered a panic in investors and a selloff in all the sectors of the S&P 500. The Energy sector lost 15.4%, the Financial Sector lost 13.5% and the Materials Sector fell 12.7%. Last week's loss was the worst weekly loss since the 2008 financial crisis.
The SPY opened on Monday with a negative gap of around 10 points. Tuesday, it continued falling resulting in the moving averages (EMA 7,27) crossing negatively. Wednesday, the market seemed as if it had consumed it's correction since it closed at the same level as Tuesday's close but Thursday and Friday it continued its fall. Technically speaking, the Friday before the crash, certain indicators were diverging from the price graph of the SPY indicating a certain correction to come. However, nothing indicated the severity of this correction. In Finance, we refer to moments like this as Acts of God.
The Volatility Index (VIX) closed at 40.11%. The market is too volatile to close existing positions or to open new ones. At a VIX so high, technical indicators are not reliable and the best thing to do is to wait for the VIX to return to favorable levels.
VIP accounts (CKL0522 Portfolio with ETFs) - 2020/03/02
Week of February 17th 2020
This week's strategy was a option strategy based on theta with a large range since the moving averages of the VIX crossed negatively.
We no longer publish the weekly transactions since they are reserved for our CKL0522 clients.
Weekly profit/loss on the closed positions:
Leg #1 : 21$ loss
Leg #2: 273$ profit
Leg #3: 12733$ loss
Leg #4: 9310$ profit
Weekly profit on the closed positions = 3717$ US
Weekly profit/loss on the opened positions:
Leg #5: Loss of 26054$
Weekly loss on the opened positions = 26054$ US
This week's conclusion: The weekly option strategy lost 3171$ because the market's abrupt downfall fell under the range. The temporary loss in opened positions are kept because we think that the high quality product is still fundamentally bullish in the long term and at a VIX so high it is not time to react and close positions.
VIP accounts (CKL0522 Portfolio on Futures Market) - 2020/03/02
Week of February 24th 2020
This week's strategy was a option strategy based on theta with a large range since the moving averages of the VIX crossed negatively. IB doubled it's maintenance margins after Monday's drop forcing us to close all of our client's positions in the Future's Market in order to avoid margin calls.
We no longer publish the weekly transactions since they are reserved for our CKL0522 clients.
Weekly profit/loss on the closed positions:
Loss of 16332$ US in the five legs
This week's conclusion: In order to avoid margin calls, we don't use more that 1/3 of the capital in our futures trading accounts. However, Monday's catastrophic drop changed the margin requirements for futures contracts and forced us to close all of the positions. We are awaiting a friendlier VIX in order to reimbark in the market.