If you are seeking diversification for your stock, bond, and commodity portfolios, Carbide Capital can be considered for its steady growth and non-correlated returns. Carbide Capital was founded by the former head trader of the multi-billion dollar hedge fund, Universa Investments.
The Carbide Absolute Return Program is a discretionary options strategy focused on the S&P 500. Since inception 16 months ago, the program has provided its investors consistent growth with a 9.17% annualized return net of all fees. In comparison to the S&P 500, Carbide from Sept 2014 to December 2015 returned 12.41% vs 2.02% for the S&P 500. Carbide’s largest drawdown of 3.76% occurred during last summer’s correction and was quickly recouped with a 3.82% gain the following month.
The market has become increasingly volatile as fears of a global slowdown continue to pressure equities. With the extent of the slowdown in China unknown and plunging commodity prices, this volatility will likely continue for some time. Additionally, stock valuations remain high and earnings and revenue continue to decline. On the positive side, rate increases will likely remain subdued and sentiment is extremely negative. The market appears nearly as oversold as it was last August, before a major rally ensued.
The economy in the US still appears relatively strong, outside of the energy space. Unless there is a shock to the system, we do not see a recession in the near future. If any positive news develops, such as a stabilization in commodity prices, the market could resume its uptrend. It is unlikely to be smooth sailing, however, as investors still have 2008 in their minds and fear another major bear market may be developing. Our base case is this is just a nasty correction and the bull market will resume. The higher volatility will make it difficult to own risk assets outright, but opportunities in the options market should be plentiful. When fear is rampant in the stock market, elevated option premiums make our strategy more attractive.
This article is distributed for informational purposes only and should not be considered as investing advice or a recommendation of any particular security, strategy or investment product, and does not constitute an offer to sell, nor a solicitation of an offer to participate in the Carbide Absolute Return Program. The author's opinions are subject to change without notice. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this article may be reproduced in any form, or referred to in any other publication, without express written permission of Carbide Capital Inc.
Past results are not necessarily indicative of future results. Performance data is unaudited and subject to revision. Futures and options trading is a high risk investment that should be made after consultation with independent qualified sources of investment and tax advice. The risk of loss from the trading program can be substantial. You should therefore carefully consider whether such trading is suitable for you in light of your financial condition.
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2. Martin Luther King Holiday Trading Hours
Click on image below to enlarge
Please see a snap shot of major markets trading hours for this Sunday night and Monday morning trading schedule in observance of Martin Luther King Jr. Holiday. For in depth schedule
9:00 AM CST - NAHB Housing Market Index(Jan)
3:00 PM CST - Net Long-Term TIC Flows(Nov)
FN: Jan Lumber(CME)
6:00 AM CST - MBA Mortgage Purchase Index
7:30 AM CST - Building Permits & Housing Starts(Dec)
7:30 AM CST - Core CPI & CPI(Dec)
LT: Feb Crude Lt(NYM)
Feb Platinum & Palladium Options(NYM)
7:30 AM CST - Initial Claims-Weekly
7:30 AM CST - Philadelphia Fed(Jan)
9:30 AM CST - EIA Gas Storage
10:00 AM CST - API & DOE Energy Stats
2:00 PM CST - Dairy Products Sales
3:30 PM CST - Money Supply
7:30 AM CST - USDA Weekly Export Sales
9:00 AM CST - Existing Home Sales
9:00 AM CST - Leading Indicators(Dec)
2:00 PM CST - Cattle On Feed
2:00 PM CST - Cold Storage
2:00 PM CST - Milk Production
FN: Feb Crude Lt(NYM)
Feb 2,5,10 Year Notes Options(CBT)
Feb Bonds Options(CBT)
Feb Canola Options(CBT)
Feb Wheat Options(CBT)
Feb Corn Options(CBT)
Feb Oats Options(CBT)
Feb Rough Rice Options(CBT)
Feb Soybeans,Soymeal,Soyoil Options(CBT)
* Please note that the information contained in this letter is intended for clients, prospective clients, and audiences who have a basic understanding, familiarity, and interest in the futures markets.
** The material contained in this letter is of opinion only and does not guarantee any profits. These are risky markets and only risk capital should be used. Past performances are not necessarily indicative of future results.
*** This is not a solicitation of any order to buy or sell, but a current market view provided by Cannon Trading Inc. Any statement of facts herein contained are derived from sources believed to be reliable, but are not guaranteed as to accuracy, nor they purport to be complete. No responsibility is assumed with respect to any such statement or with respect to any expression of opinion herein contained. Readers are urged to exercise their own judgment in trading!