In the final part of the “Top Dogs” series, Tom & Tony discuss how to manage expectations in a large portfolio, $250k+.
In, Tom and Tony review their entire portfolio and discuss adjustments they have made to their positions by at 50%, re-establishing new core positions and tested positions. To help offset risk with their short 1,500 IWM shares, they sold covered puts and additionally got long 5 in QQQ.
Since the start of the series, the portfolio is up roughly three percent. The portfolio showed that Undefined Risk Strategies outperformed the Defined Risk Strategies.
The guys explain two adjustments they are planning for in the upcoming week; closing out 2 of the 5 Covered Call contracts in the QQQ, and rolling the Goldman Sachssince there is less than 2 weeks to .
Tom and Tony remind viewers that although the portfolio has seen profits since the start of the series, losses can inevitably happen. For example, if a trade had a 68% probability of profit, it implied that there was a 32% probability of loss. Drawdowns do happen and they typically expect that to happen about 32% of the time over many occurrences.
Going forward, Tom and Tony plan to sell puts against their short stock and sell calls against their long stock. They will also look for defined-riskand ETFs as they take off their current positions.