Dear friends and Quastic visitors. My name is Jan Kaška, I am a member of the investment committee of the Charles Bridge GMF hedge fund, the author of many investment strategies – working mainly with options and structured products – and a long-time investor in the financial markets.
New series about trading inefficient ETFs with the help of the options
I have prepared for you the series about trading options which are linked to the ETF/ETN, and which are also characterized by certain inefficiency. In my articles, I would like to teach you how to use this inefficiency for your advantage. You will just need to understand certain details:
- how these ETF funds work, respectively, on what basis they are built
- how and based on what their value develops over time
- how to take the potential opportunity with adequate reduction of the risk
- my point of view on what kind of money-management and trade management is ideal for this type of investment
I would like to present the entire series in following steps:
- what is alpha and what are the types of approaches to generate alpha
- why I consider the option trading of inefficient ETFs/ETNs as the best alpha source
- what is contango and backwardation
- how to find out if the market is in contango, what methods use for it
- how to use contango in your favor
- introduction to ETF/ETN – why I consider them as ideal candidates for long-term short position
- contango and its influence on ETF funds
- practical examples of the inefficiency
- ETF comparison based on contango
- leveraged ETF and its use
- trading strategies suitable also for small accounts – I will analyze individual strategies (pure short, naked options, vertical spreads and advantages and disadvantages associated with them)
- entry signals – when and in what situations it is appropriate to open the trade
- position management
- methods of closing the trade
- more advanced trading methods – especially the analysis of inverse ETFs, trading pairs
You do not have to worry about anything …
Some of you may find some of the terms in the series difficult – but you do not have to worry about understanding the matter. I’ll always explain the topic on specific examples, including resources where you can find the most up-to-date information you need.
All the information are based on my long time experience with trading these strategies, which I consider to be very robust, basically suitable for any market environment and available also for smaller investors. But I will not forget to mention also the limitations and risks that are associated with this type of trading.
Personally, I believe you have something to look forward.
P.S.: Of course I will be very glad to hear your comments and suggestions, which you can put down in the post below.