Bitcoin vs. Altcoin OutlookBitcoin has been on a solid streak this week, just about a full recovery from the Segwit2x mayhem this weekend. The Altcoin index has retraced significantly, and other than a brief test of -1.4%, the spread indicator has been solidly positive for the past three days, indicating that Bitcoin is providing better returns at the moment. At this point a retracement is inevitable, and it may be a good idea to take some profits from BTC, and consider investing in some Altcoins, like ETH or LTC, which seem poised for a breakout.
If you're interested in getting access to the crypto spread or altcoin index, sign up at quantguy.net!
Spread
30 Year, 2 Year Spread Making New LowsThe spread between the 30 year US treasury bond and the 2 year bill has made new lows as the yield curve in the US continues to flatten. Anticipate a pullback at some point, but the curve will likely continue to flatten as investors price in a rate hike despite dovish comments from Bullard at the Fed.
This pullback will be confirmed by a green triangle on the Kovach Reversal Indicator. If you're interested in using this indicator, check out quantguy.net.
Bitcoin Regains Crypto ThroneAfter the fallout from the Segwit2x drama this weekend, the Altcoin index has tanked and the crypto spread indicator is on fire. It is solidly in positive territory indicating that funds are flowing to Bitcoin from the Altcoins. Ethereum and Litecoin did not seem to benefit at all from the frenzy this weekend, it was all Bitcoin Cash which has since retraced. Consider adding to a position in Bitcoin, but be aware that historically, we've pulled back a bit further before the bulls regain control.
If you're interested in the crypto indicators, you can check those out as well as others at quantguy.net
Bitcoin and Altcoin and Spreads! Oh My!The Altcoin index (blue line) continues to grow while Bitcoin is pulling back, which indicates that funds are flowing from Bitcoin to Altcoins. The Altcoin spread indicates that Altcoins are providing better returns at the moment. Historically this is transient. Although there has been a lot of tumultuous news lately, e.g. Segwit2x fork being cancelled and Bitcoin Cash threatening to become the new Bitcoin, these do not appear to be that significant.
Consider adding to a position in Bitcoin in anticipation of funds to flow back to Bitcoin soon.
If you want access to the Crypto Spread, Altcoin Index, and more, sign up at quantguy.net
Bitcoin Retracement Might Be Short LivedThe fallout from the Segwit fork cancellation has taken its toll on Bitcoin, for the moment. Kovach Momentum Indicators suggest that there is still a lot of steam behind Bitcoin's massive rally. Also, the Kovach Crypto Spread indicator suggests that funds are flowing from Bitcoin to altcoins. Consider adding to a Bitcoin position, but be prepared, as Bitcoin may dip further.
Interested in the Kovach Momentum Indicators or the Crypto Spread Indicator? Sign up at quantguy.net
Ethereum Breakout Likely to ContinueThe fallout with the Segwit fork cancellation bleeds into Altcoins as funds flow from Bitcoin. The Kovach spread indicator on the bottom measures this quantitatively. It has dipped into negative territory meaning that for the moment, altcoins are providing investors with better returns. Consider adding to your altcoin position on every pullback.
To gain access to the Kovach Crypto Spread indicator and more, sign up at quantguy.net
Dec wheat is looking cheapWhen we look out a year and a bit Wheat is looking to be at a big premium to this Dec wheat, so at this extreme will add in a long dec/dec calendar tot eh already short put position.
Please hit me up if anyone has any questions when looking to try one of these low cost spread trades.
Soy beans set up spread longSoy on the year over year spread is getting to its widest point and could be setting up a good buying spot. This is a great way to get long beans from this low with great reduction of buying power. After a confirmed bounce off bottom and if we still have enough time will look to adding a theta component to the trade. Please feel free to ask questions.
EURUSD STRADDLE SPREAD / BINARY TRADEEUR/USD News trading Straddle strategy on Nadex
Limit positions placed at 11PM U.K time (21/08/2017)
All positions were initiated overnight. All contracts expire 3PM EST (8PM UK Time)
Binary Buy > 1.1880
@8.00 Risk $8.00
TP: 55.00
Spread Buy 1.1810 - 1.2060
@1.1830 Risk $20.00
TP: 1.1885
Spread Sell 1.1560 - 1.1810
@1.1794 Risk $16.00
TP: 1.1735
Binary Sell > 1.1740
@92.00 Risk $8.00
TP: 45.00
Max Risk: -$52.00 + -$4.00 (Fees) = -$56.00
Max profit if price hits BUY targets:
Binary Buy = +$47.00 Spread Buy = +$55.00
Binary Sell = -$8.00 Spread Sell = -$16.00 Fees = -$6.00
Total: $72.00
Max profit if price hits SELL targets:
Binary Sell = +$47.00 Spread Sell = +$59.00
Binary Buy = -$8.00 Spread Buy = -$20.00 Fees = -$6.00
Total: $72.00
The figures above are max risk / max profit, I could make anywhere between -$56.00 to +$72.00 on this trade.
I will update around 8pm UK time on the outcome.
CLOSED: OIH Aug credit spreadThe bear call credit spread strategy gives a decent probability of profit, defined risk, and expresses a bearish opinion that the underlying will move lower.
The IVR on OIH reached above 70% and July 12 with a bearish opinion I sold the 25/26 call spread, 2 contracts @ 36 credit ea.
The $25.36 break even was quickly tested the following days, but eventually I closed a week early at 5c.
In hind sight I should have just closed the short option at 5c and let worthless long call expire to avoid the broker fee.
Clear positive divergence here on the weeklyAs the current price has been decreasing, the relative strength of CTRV continues to increase. This has also bounced off of a signal previously returning huge gains in the last year.
Why selling OTM spreads is guaranteed to wipe out your profitsTrading without a risk management is gambling. Gambling relies on hope.
Selling OTM spreads depends on a 75% success rate and surviving a few big losses. The RR is very low if you are aiming to collect 25% of the spread. I traded 12 months solely on BullPut and this has taught me well. It's a losing strategy based on the misconception of high win rate and "consistent" income.
Using ITM spreads, you can enjoy higher RR and live to make another trade. I took a calculated loss on AAPL with RR 1.6.