27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
Between January 4 and February 11, inclusive, the S&P 500 lost 10.31 percent. However, since February 12, the index recuperated 12 percent, closing around $204.79 on Thursday.
A while ago, Jason Goepfert (@sentimentrader) pointed out on his Twitter account (which has more than 27,500 followers) that this will be the sixth time in 50 years that the S&P 500 has managed to erase a 10 percent year-to-date correction – the S&P is now up 0.45 percent year-to-date.
The chart below illustrates his point.
Source: Sundial Capital Research
The last time that the S&P 500 had seen such a rebound was in late 2011, when it managed to erase a loss of 11 percent. Interestingly, after all of such rebounds seen in the past 50 years, the S&P went on to gain at least 9.9 percent in the year that followed. However, statistics also show it is unlikely that the S&P will surge on Friday, as the index rarely rose in the day following the recoup.
However, what investors can expect is the index to post gains over the next three-month period. In all five cases seen in the past 50 years, the S&P posted gains in the three-month period that followed the recuperation. In fact, three months after the recuperations seen in the chart above, the S&P had gained an average of 2.1 percent. A year after the rebound, the mean return ascends to 13.8 percent.
Disclosure: Javier Hasse holds no positions in any of the securities mentioned above.
27% profits every 20 days?
This is what Nic Chahine averages with his options buys. Not selling covered calls or spreads... BUYING options. Most traders don't even have a winning percentage of 27% buying options. He has an 83% win rate. Here's how he does it.
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