Fifth Street

Capitalize on Short Term Moves

Uses volume analysis to sense bullish price breakouts with quick exits to minimize risk

Benefits

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    Uncapped Upside

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    Low Margin Requirements

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    Uses Option Leverage

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    Defined Risk

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    No Overnight Risk

Considerations

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    Moderate Win Rate

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    Execution Risk

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    Not All Upward Moves Captured

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    Quick Exits

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    Active Management

Further Info

Proprietary Skyward strategy capturing short term bullish moves in the SPY identified by analysis of trading volume anomalies. Through backtests we have found that using optimized temporal exits generates higher Sharpe ratio and risk reward metrics. 

We use options to minimize capital investment, with the attempt to capture higher upside benefiting from option leverage. We have found our signal to be effective across numerous symbols in addition to the SPY. This strategy has remained effective through periods of high volatility, though option price increases caused by the volatility do increase the necessary investment. As part of this strategy, we analyze the option chain to find the optimal strike, evaluating if there is a better risk/reward ratio in pivoting to a spread. This has shown good results in backtests and live trading.

This strategy requires a high level of attention. If you are away from your desk most days and want to leverage this strategy connect with us here and we can explore ways to provide fully automatic tools to support your trading.