Swing Portfolio

The swing alerts portfolio has a pretty great year so far with some of the same idea flow in there including some of the same ideas I’ve taken into the fund and in client portfolios for the firm.

This week there was a discussion in the Discord between some readers of the report on the concept of DITM and I talked about it on the Q&A as well (again) on latest video cast yesterday here.

The Swing Portfolio uses a specific trade structure and this idea of trade structuring is a strategy-set in itself but it tends to fly over the heads of most retail investors. What we end up seeing are usually short-term options trading (which has taken off in 5 years) and other convoluted “strategies”.

There was a member who returned after my hiatus a few years ago who came to me trading spreads again and using the AST Portfolio, he switched to DITM and LEAPs after a year here using the portfolio (more below).

What ended up happening is that it dampened his returns!!!

I saw someone who emailed in on $VFC ( ▲ 0.93% ) last week tell me he sold puts and had call spreads on the name and I couldn’t help but think, why?

Why would you express a view like that on a stock that has the potential to go 3-4 bags higher and then remove yourself from that upside?

We use LEVERAGE AND TIME in the AST Swing Portfolio for one reason, we want the asymmetric upside!

This means it’s as close to stock replication as you can get without laying out the amount of capital you need to express the view.

The concept is relatively simple here: We are not after home-runs or 3-4 baggers.

This is important because some investors are unable to differentiate the idea that there are more than one approach to portfolio management strategies.

We run two strategy sets in the hedge fund: Core Investments & Event-Driven Strategies.

That means I am not always after a value stock or even after some Company we have to own for 15 years to say “We made it!” - it means we put money to work to generate RoR over and over and over.

That’s the framework of thinking with the DITM and AST Portfolio: Income. 

Repeatable trades, not investments, to generate low-volatility income trades for your portfolio. Not your entire portfolio, maybe a portion of it, but even then there have been readers who have taken to the general idea of DITM and LEAPs and incorporated them into their trade expressions.

One of the long-time readers here (Ron) who runs nearly $1.5m of his own money expresses almost 99% of his views with DITM and LEAPs. 

He could choose to use equity because he has the capital to do it but the time arbitrage of long-term options and higher deltas give him leverage.

Leverage to make more and leverage to have more time to be right.

So, we’re going to be talking about not only our AST Swing Portfolio Membership but also the mental framework of DITM options.

This will be a great event for those of you new to options structures and even to those of you who have never thought about it in this way.

When: Saturday August 23

Time: 10am EST

Where: Online Webinar

Please register below for the event and we’ll send a link to it the day before.