This segment, the seventh in a twelve part series for larger accounts of $250,000 to $2.5 Million builds on the previous segments and discusses trading around our core portfolio. The series is aimed at larger accounts but everyone can learn some important lessons from these segments.
Our core portfolio is our starting mechanism. The exact makeup of your core portfolio is not nearly as important as what you do with it to improve cost basis, how you put on positions of both defined and undefined risk and how you trade around those positions.
Previous segments have shown our model core portfolio and a series of positions one could add to the portfolio. There has been some market movement and a decline in IV since we placed those positions. This segment will give you ideas of how to manage and trade around them.
A quick review is followed by looking at the trades we established a few weeks ago. We now have some decisions to make. The portfolio was made up of highly liquid stocks with high IVRs. Tom and Tony explain which trades we close (both winners and losers) and why and which we roll and why.
The undefined risk trades are examined first followed by the defined risk trades. The P/L as of yesterday and the change in IVR is noted for each and the entire trading portfolio. The importance of being mechanical, diversification and selling high IVR are stressed and the examples in the portfolio drive that home.
Watch this segment of “Top Dogs” with Tom Sosnoff and Tony Battista for the details on the portfolio, what trading decisions we would make and why. The information here, in the previous segments and in the one that follow can increase your chance of success especially when compared to what the typical advisor would recommend.