Since April our HFEA strategy finally picked up as the markets started rallying and our core SPXL position rallied over 20%. We keep holding our position and keep selling covered calls and put spreads. If the market keeps moving higher, SPXL will follow strongly up.
Initially, I dedicated $15,000 to this strategy. That represented approx 15% of our portfolio. When the SPXL underperforms the market and my position goes down and is below my cost basis (my position is in red), I add new shares to my portfolio. I deposit cash and buy shares. Once this bear market ends, and trust me, it will, as no bear market lasts forever, I will stop buying new shares but trim the position and save cash from selling for the next bear market. This is a standard balancing approach. Keep my position at about 15% of my main portfolio. When it moves to 20% (or more), I sell enough to bring the position back down to 15%. If it moves down to 10%, I will buy enough to bring it back to 15%, and so on.
In today’s bearish market, I am adding new cash and buying even though it hurts my short-term net-liq. However, I expect this to change soon.
| MONTH | NET-LIQ | PROFIT/ LOSS |
PROFIT/ LOSS %% |
| June 2022 | $12,199.81 | $5,276.32 | 76.21% |
| July 2022 | $15,551.55 | $3,351.74 | 27.47% |
| August 2022 | $13,414.80 | -$2,136.75 | -13.74% |
| September 2022 | $10,454.70 | -$2,960.10 | -22.07% |
| October 2022 | $16,809.60 | $6,354.90 | 60.79% |
| November 2022 | $18,659.90 | $1,850.30 | 11.01% |
| December 2022 | $16,562.20 | -$2,097.70 | -11.24% |
| January 2023 | $15,010.60 | -$1,551.60 | -9.37% |
| February 2023 | $13,990.20 | -$1,020.40 | -6.80% |
| March 2023 | $13,132.00 | -$858.20 | -6.13% |
| April 2023 | $15,222.60 | $2,090.60 | 15.92% |
| May 2023 | $13,808.00 | -$1,414.60 | -9.29% |
| June 2023 | $14,273.50 | $465.50 | 3.37% |
| July 2023 | $14,981.00 | $707.50 | 4.96% |
Our HFEA strategy increased value since April 2023 by 14% and in July 2023 by 4.96% while the entire market increased by 9.86% in the same period and in July gained 2.96%. Overall, the HFEA portfolio is up 18.82%. I think that is still a good result.
HFEA charts
Strategy Net liquidation value
The chart above illustrates how volatile the account can be during volatile markets. The best approach to this strategy is to buy and forget. Watching the position too often can bring you diarrhea.
Strategy vs SPY Net liquidation value
Strategy performance vs. SPY
Leave a Reply