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The Spectacular Fall of LJM Preservation and Growth

Investors of LJM Preservation and Growth Fund, a $772 million alternative mutual fund, got an email on Tuesday February 6, 2018: "LJM strategies have suffered significant losses." The fund (ticker: LJMAX) didn’t report the loss until late the following day, so shareholders were in the dark as to what happened.

How Does SVXY Work?

There are many more ways to trade volatility today than there was prior to the financial crisis. Numerous ETF’s and ETN’s have been created as a way for traders to hedge volatility risk or gain exposure to it. Some of these are leveraged 2 and 3 times. To say they can be risky would be an understatement.

50 Best Trading Quotes

While trading quotes can be taken out of context, and it is crucial to have a full understanding of what the trader meant at the time, they can also give traders important insights.  I asked some of my followers for their favorite trading quotes. There were a lot of great suggestions, but here are the top 50 inspirational trading quotes that I’d like to share.

The Incredible Winning Trade in SVXY

Shorting volatility via different products like SVXY or XIV has been a very popular and profitable strategy in the last few years. We know what happened on February 5. VIX spiked over 100%, causing a complete collapse of SVXY and XIV, wiping billions of dollars.

The Naked Put, A Low-Risk Strategy

The naked put is a low-risk strategy, despite commonly held beliefs to the contrary - guest post by Michael C. Thomsett. The market risk of the naked (uncovered) put is identical to the market risk of a covered call. However, the two strategies also have important differences:

 

The Lessons From the XIV Collapse

The popular short volatility product XIV will liquidate after the harrowing after-hours decline. Credit Suisse has officially announced that the XIV has reached an acceleration event. This is a very bad outcome for anyone who owned one of these products such as XIV, SVXY, VMIN, EXIV, IVOP, XXV, and ZIV.

The Astonishing Story Behind XIV Debacle

During the market's closing hour on Monday, February 5th, some sort of "flash crash," likely triggered by margin calls, attacked the CBOE Volatility Index (INDEXCBOE:VIX), also known as the "fear index." What was a bad day, turned into a never before seen move. Here is it: 

10 Questions Traders Ask

In trading, as in life, sometimes the best solutions come after a problem has occurred. For this reason, I have decided to provide you with a slightly different blog post, or slightly different perspective. Instead of writing on a certain topic, I have decided to take the time and compile one based on a recent e-mail from one of my followers.

Volatility During Crises

This is a guest post from Bill Luby. It was published in his VIX and More blog in December 2012, but still remains very much relevant today. With VIX spending most of the last year around 10-11, today's 30% spike is a good reminder that volatility is not dead yet.

Systematic Trading 101

A trend trader’s goal is to systematically ride the waves in price action for as far as they will go. There are two different types of traders: discretionary traders and systematic traders. Lets examine the differences between those two types of traders.

Distressed Real Estate Investing

Investors often are looking to diversify from the stock market and options and frequently turn to real estate as another asset class. Many like the idea of "owning" something tangible, that they can go look at, or know they physically possess. They may purchase rental properties, commercial buildings, developments, or a variety of other possibilities. 

Why not do it yourself?

If you have been trading for a while, for sure you have heard that most traders under-perform, including the so called professionals, the big funds, the "smart money". As it turns out, I had nothing better to do and decided to take a look at how some of those pools of institutional money performed in 2015 when all was said and done.

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