The Daily Bread

Vol #10 - October 9th, 2020

This week we started a new feature, it’s called the Daily Bread.

Every day this quick video series finds a trade that highlights the power of options. Sometimes they’re specific stocks in the news, sometimes they’re broad market indices reacting to a tweet from the President.

But how does that fit into options portfolio management?

Finding new ways to use our strategies is how we stay engaged with the markets. I wouldn't be as passionate about finding better ways to manage portfolios, if I didn’t believe there were interesting opportunities in the markets.

The allure of picking the correct stock and riding your insight into the sunset can be a siren song. But active investing isn’t for everyone. It’s for a very small segment of the population, and it’s full of risk.

Whether you want to be the next Paul Tudor Jones, or simply stay afloat, the one challenge everyone does face, is making better money decisions.

Thinking about how volatile stocks like Regeneron ($REGN) or Plug Power ($PLUG) will react to the news is a fantastic case study for options and trading geeks. Knowing how markets behave in the extreme cases, makes the simplicity of systematic strategies all the more alluring to me.

The more time I spend in the markets, thinking about trading different names, the more frequently I come back to Occam’s razor - the simplest solution is often the best.

When you’re actively trading it’s finding intuitive and high reward low risk trades like we highlight in Daily Bread. But when you’re managing savings as a passive investor, it’s about buying a broad basket of stocks and systematically diversifying with options.

Looking at the markets every day presents interesting opportunities. I believe there is an edge for investors who are engaged and use strategies tactically. But much more importantly, the quest for opportunity provides insight into why it’s so important for everyone to add a little bit of different to your portfolio.

Thanks for joining us,

Mark Phillips
CEO

What clients are asking us:

• What about model portfolios?

  • We’re increasingly hearing requests for a simple package that clients can sign up for exposure to several strategies at once. We love this idea. Shortly we’re going to be releasing a model portfolio concept on our portal that will allow you to get a basket of options strategies that fits your goals.
    Amplify. Diversify. Protect.

• When I can see more from Harvested?

  • Next week Mark Phillips will be hosted on Tradier’s OptionsBrew podcast by Kevin "Lex" Luthringshausen. There’s going to be a lot to talk about, and we’re excited to offer invites to the live audience. You can also stream it on Youtube.

• What about profit targets?

  • There’s a lot of great research about how locking in opportunities at certain profit targets can enhance returns. If you’re interested in parameterizing strategies with this, please reach out, as we’re developing more features.

Happy Friday

There’s no such thing as a free lunch.

This truism has stood the test of time since it was first introduced in 19th century New York City taverns. Traders still say it today when they question the motives behind a trade that seems too good to be true, but the original loss leader was serving a free meal.

Free lunches encouraged imbibers to stick around and keep buying drinks. There were a range of dining options that varied with the price of the drink you were willing to buy, but for the most part this was the fatty greasy fare of saloons. While this certainly encouraged further drinking, there was also a certain social function performed.

The winter of 1894 was brutally cold in Chicago. Much of the burden of feeding the poor fell to saloon keepers and their free lunch programs. There were an estimated 6000 taverns at the time, of which approximately half had some sort of free lunch program.

Pictured here is the "Majetic Saloon" one of the typical Chicago area taverns that served workers from the nearby US Steel plant on the far south side of the city.

Free lunches saw their demise with the temperance movement. While there are vestiges of complimentary hospitality in the casino industry, overall loss leader tactics have become much more sophisticated, and we have to settle for peanuts at the bar these days.