I liked the look of my unrealized gains on two UVXY puts this morning and tried a limit order.
music selection: “E-Pro” — Beck
I was able to sell both UVXY170120P00003000 and UVXY170120P00010000 at favorable prices. The three strike (15 pre split) was originally purchased on 18MAY2015 for 1.12 a contract. I was able to sell today for 1.50 a contract. Over 60 days in trade that comes out to an annualized return of 206%. Celebrate!
I similarly purchased the 10 strike put on 19JUN2015 for 3.70 a contract. I was able to sell today for 4.25 a contract. Over 28 days in the trade that comes out to annualized return of 194%. Celebrate some more!
Since launching the blog, I have had annualized returns on UVXY puts of 30%, 206%, and 194%. That is an average return of 143%. This is why buying long dated puts on UVXY is my highest conviction idea. For sure, there is a small chance of losing the entire investment but there is a strong chance of radically outperforming the market. As long as you keep your position size small, you should recover nicely from any black swan events that result in a loss on the trade. Also, it is wise to exit the trade when the put is in the money to book gains or cut losses.
I’ll be back Monday with a new trade to establish a new position in UVXY puts.
Devour your prey raptors!