SteadyOptions is an options trading forum where you can find solutions from top options traders. TRY IT FREE!

We’ve all been there… researching options strategies and unable to find the answers we’re looking for. SteadyOptions has your solution.

2017: The Year of Risk Free Returns


2017 shattered many records, but not the ones most folks think of. The records left shattered in many pieces in 2017 were all risk-related. Specifically, 2017 was the year that risk forgot.   Metaphorically, this was the year in which a drunk driver wearing a blindfold could drive across town...and not hit anyone or anything along the way.

Here are just a few of the shattered risk-related records, a sample of 3 each for the Dow and S&P:

 

Dow:

  1. Dow Industrials intraday volatility, lowest on record (95% of days in 2017 had less than a 1% Dow intraday move)
  2. Dow Industrials greatest number of days in history without a 1% move (72)
  3. Dow Industrials closed at new all-time highs a record 71 times in 2017
     

S&P 500:

  1. S&P 500 annualized volatility of 3.9%, lowest on record
  2. S&P 500 Total Return Index gained in every month of 2017, and ended the year at a record 14 consecutive up months
  3. S&P 500 ended the year with a record 289 consecutive days without a 3% pullback

 

VIX:

  1. Lowest intraday level in history (8.84 on 7/26/17),
  2. Lowest daily close (9.19 on 10/5/17),
  3. Lowest weekly close (9.36 on 7/17/17), and
  4. Lowest monthly close (9.51 on 9/29/17).

 

2017 also serves as a reminder that future is unknown. Nobody was predicting this to be the least volatile year in modern history. They were predicting just the opposite, in fact, even after the year had already begun…

 

Additionally, US equities have now posted positive returns for nine straight years, tying the record from 1991-1999. I could go on and on, but you get the idea.  Some years from now, we'll look back and agree that 2017 was the "exception that proves the rule," and that risk indeed still exists, and must be dynamically managed for long-term success.  

 

In my firm, all of our strategies include dynamic risk management, either in the form of option hedging with our Anchor strategy or with trend following rules that react to weakness in equity prices by partially or entirely exiting positions to protect capital.  After all, do we demand that the fire department be disbanded as a waste of time and money when a neighborhood experiences a year with no fires?

 

Jesse Blom is a licensed investment advisor and Vice President of Lorintine Capital. He provides investment advice to clients all over the United States and around the world. Jesse has been in financial services since 2008 and is a CERTIFIED FINANCIAL PLANNER™. Working with a CFP® professional represents the highest standard of financial planning advice. Jesse has a Bachelor of Science in Finance from Oral Roberts University. Jesse is managing the LC Diversified portfolio and forum, the LC Diversified Fund, as well as contributes to the Steady Condors newsletter.

 

What Is SteadyOptions?

Full Trading Plan

Complete Portfolio Approach

Diversified Options Strategies

Exclusive Community Forum

Steady And Consistent Gains

High Quality Education

Risk Management, Portfolio Size

Performance based on real fills

Try It Free

Non-directional Options Strategies

10-15 trade Ideas Per Month

Targets 5-7% Monthly Net Return

Visit our Education Center

Recent Articles

Articles

  • Questions to Ask Yourself Before You Start Investing

    Everyone has heard the success stories of people making tons of money from investments, retiring early, and living a life of luxury. But, before you start tying up all your cash in investments, it is crucial to understand more about what is involved.

    By Kim,

    • 0 comments
    • 62 views
  • How To Use Tech To Improve Your Stock Trading

    Technology is undoubtedly helpful in many aspects, and stock trading is no exception. Over the years, the stock trading market has experienced improvements as a result of leveraging technology. For instance, stock traders can have faster access to more comprehensive data to help them make a more informed decision.

    By Kim,

    • 0 comments
    • 253 views
  • Exploiting Earnings Associated Rising Volatility

    It was brought to my attention that Seeking Alpha now restricts the number of articles people can read for free, so I will reprint few of the key articles I wrote for SA. This one was my fist article, written in 2011, and it gives an introduction of the earnings straddle strategy that we have been using for the last 10 years with great success.

    By Kim,

    • 0 comments
    • 484 views
  • Why And How To Trade Objectively And Keep Your Emotions In Check

    Trading on the stock market is a serious profession. Individuals can make a very lucrative return whether trading professionally or personally. To successfully trade on the stock market it requires years of dedication, practice and thorough market understanding.

    By Kim,

    • 0 comments
    • 811 views
  • 3 Things You Need To Know About Investing As An Immigrant

    One of the most effective ways to prepare for the future is investing. This is because investing provides a way to have access to resources that are not readily available. While there are many ways to make a nest egg for you and your family, investing provides a way of earning passive income. 

    By Kim,

    • 0 comments
    • 1,094 views
  • The Benefits of Rebalancing

    A portfolio with multiple funds will drift away from the original allocation over time if it is not rebalanced. In this article I’ll show how rebalancing can be implemented and how it can be beneficial. It's called buy, hold, and rebalance.

    By Jesse,

    • 0 comments
    • 1,992 views
  • How To Manage Fear And Greed In Trading

    Why doesn’t everyone get involved in trading? And why doesn’t everyone “hit it big” on the stock market at least once? If you eliminate the main factors that drive the human mind (emotions) and only consider knowledge, logic, experience, and reason, everyone should be able to earn money from trading.

     

    By Kim,

    • 0 comments
    • 2,305 views
  • Probability vs. Certainty Trap

    We all would like all our trades to be winners, but we know this is not possible. We know some of the trades will be losers. Many traders think that if a trade has lost money, it was a bad trade. They try to identify what errors they made that lead to losses. Why? "Because I lost money! So surely I have made a mistake somewhere?”

    By Kim,

    • 2 comments
    • 7,032 views
  • How To Choose The Right Platform For Your Stock Trading

    The interest in stock trading has increased due to its higher returns and profit potentials. Like the many traders available, there are numerous approaches and platforms to set your trading environment. Online trading platforms provide adequate resources and tools for their clients' trading success.

    By Kim,

    • 0 comments
    • 4,223 views
  • How To Approach Passive Investing

    Passive investing refers to an investment technique that seeks to increase returns by limiting purchasing and selling. One of the most popular passive investment strategies is index investing, this means that a group of investors buy a representative benchmark, and keep hold of this over a long period.

    By Kim,

    • 0 comments
    • 3,944 views

  Report Article

We want to hear from you!


There are no comments to display.



Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account. It's easy and free!


Register a new account

Sign in

Already have an account? Sign in here.


Sign In Now

Options Trading Blogs Expertido