We are in month 2 of our cash out.
Our last Portfolio Reviews were back on September 16th and we had already lightened up back on August 17th ("Top of the Market Tuesday – Cashing Out While We Can") with the S&P 500 at 4,472. On September 16th, we were at 4,495 but that just meant we had a whole month to wriggle out of our positions without any panic. Now it's October 12th and the S&P finished the day yesterday at 4,361 – so down a bit, but not much overall.
Still, it's been a great month for our Short-Term Portfolio (STP), which is where we keep our hedges to protect our long-term positions as it's gone from $94,705 to $128,727 as of yesterday's close, a gain of $34,022 (35.9%) on just a 2.9% dip in the S&P 500. Needless to say we are highly leveraged to the downside but we still need to be certain we are adequately covering our long positions (more on those later) for what could be a 20% correction in the indexes that is unlikely to spare any position.
- SKF – An ultra-short on the Financials we added since our last reveiw. Between inflation, rate changes, lack of stimulus and China's property melt-down – I figured it was good to hedge in that sector (not that we're very invested in Financials). These are just straight- up long calls looking for a quick gain – none so far. If they pop to $10 the Delta is 0.75 so we should make 50% – that's our goal (+$1,500).