The RUT “Bull” Trade Tom Clark tom@thomark.com.

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Presentation transcript:

The RUT “Bull” Trade Tom Clark tom@thomark.com

Disclaimer

www.lockeinyoursuccess.com

Why I like the “Bull” trade so much Simple – Rule Based No technical analysis No stock selection No adjustments! Check once a day One position a month Totally non-discretionary Never a decision to make No judgment calls to make

Trade Rules

Credit Spread P&L Graph

Why RUT? Not highly correlated with S&P 500 High priced Smaller Cap (vs. S&P) High priced Index not stock Cash Settled, Preferential Tax Treatment No single company risk More Domestic (less foreign exposure) less sensitive to currency exchange issues Volatility different from S&P 500 (RVX vs. VIX) Highly Liquid Not a crowded trade

Risk Mitigation Conservative capital allocation/management Don’t second guess exits Use market order w/Stop loss otherwise stay in Early profits when presented with the opportunity Stay out of Bear markets (how to identify?) Take / Re-deploy profits, don’t compound Black Swan hedge?