01

Jan

Our Top 10 Trades of the Decade

With the start of 2020, we are looking back at our best trades of the past decade.

10. Going long Spanish government bonds as the European debt crisis got resolved

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TOP IOTAF TRADES OF THE DECADE: Number 10: going long Spanish government bonds as the European debt crisis got resolved. It was the beginning of the decade and European peripheral debt markets, specially in countries like Portugal, Italy, Ireland, Greece and Spain, were under pressure as these countries, named the PIIGS nations, were experiencing deficits that were larger than what was agreed on by the EU Maastricht agreement. As traders and investors felt that there was a chance these counties could in fact default on their debt their bond markets collapsed. We went LONG Spanish bonds on the first sign of a resolution to this crisis, which was the famous TROIKA agreement by the EU, IMF and ECB to bail out these countries debt markets. An AMAZING trade which will go down in history as one of the best trades of the century, especially as European bonds skyrocket on the eventual quantitative easing program that led to trillions of dollars worth of purchases of these bonds by the European Central Bank. For every $1000 invested on this trade in futures or options, you would have made $100,000. Not bad! #tradesofthedecade #bonds #spain #traders #investors #realmoneyteam #piigs #europe

A post shared by IOTAF (@iotaf) on Dec 28, 2019 at 12:34pm PST

9. Buying way out-of-the-money front-end put options on the British pound an hour before the Brexit vote results were released.

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TOP 10 IOTAF TRADES OF THE DECADE: Number 9: Buying way out-of-the-money front-end put options on the British pound an hour before the Brexit vote results were released. This Trade is one of my favourites because the market had returned to P1 from the day the referendum vote was announced, $1.50 GBPUSD, implying that markets were fully underestimating the risk of a Brexit vote result. The months heading into the vote the British pound had been extremely volatile reacting to every poll and rallying when Bremain was ahead and crashing down as Brexit showed a higher chance of happening. Then as Bremain polls started dominating by a large margin the “risk” of Brexit priced in by the market was close to zero, showing a huge asymmetric risk opportunity going short the pound. We held an emergency strategy session from Europe that night and decided to short Sep16 $1.2500 put options which at the time were trading very low. As the results came out, the British pound collapsed the most ever, making this trade one of the most profitable of the decade. For every $1000 of money put at risk you would have made $25,000 in less than a few hours. Given the time frame and risk reward via our well calculated options strategy this was definitely a no brainer for us experienced traders! #gbpusd #england #brexit #forex #stocks #bonds #options #fortune #money #realmoneyteam

A post shared by IOTAF (@iotaf) on Dec 28, 2019 at 6:29pm PST

8. Going short stocks on the first sign of Trump likely to win the presidency until futures limit down, then going massively long stocks and short bonds

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TOP 10 IOTAF TRADES OF THE DECADE: Number 8: Going short stocks on first sign of Trump likely to win the presidency until futures limit down. Then as markets settled in and a republican sweep was announced, reversing and going massively long stocks and short bonds. This trade was definitely the most exciting presidential elections trade I have ever had in my 20+ years of trading experience, especially because of all the drama heading into the elections and the very well publicized differences between Hilary Clinton and Trump. It was obvious that a Hilary win would be short term positive for stocks but medium term negative, and viceversa, a trump win was seen as very bad for stocks short term but positive long term if republicans controlled the house and the senate. After hours of research and preparation we held a two hour long strategy session on our trading floor and decided to short stocks if “RED” was in the lead and hold the shorts if Trump was likely to become president. That trade in itself was good but nothing in comparison to our MEGA trade which was to reverse at limit down and turn massively long stocks on a republican sweep. It happened at around 2 am in the morning and to this day stocks haven’t turned back, causing one of the biggest rallies in history thanks to Trump’s pro-capitalist policies, deregulation and his influence on the fed to keep the expansion going by cutting rates and expanding the Fed’s balance sheet. For every $500 invested in e-mini Dow futures you would have made $65,000. Thanks Trump! #trump #maga #kag #noimpeachment #politics #stocks #bonds #forex #markets #traders #realmoneyteam

A post shared by IOTAF (@iotaf) on Dec 28, 2019 at 6:48pm PST

7. Shorting stocks as the Fed shrinks its balance sheet

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TOP 10 IOTAF TRADES OF THE DECADE: Number 7: Shorting stocks as the Fed shrinks their balance sheet. It was the end of 2018 and the federal reserve was in full on tightening mode: hiking interest rates and most importantly shrinking the size of their balance sheet by not reinvesting the proceeds of bond maturities. After 10 years of ultra easy monetary policy stance the federal reserve under Janet Yellen felt it was necessary to take away some of the extraordinary accommodation that was put in place to fight the consequences of the Great financial crisis on 2008. As the markets digested the implications of such monetary policy tightening it was an easy and obvious trade for us to be short equities into the final rate hike of 2018. The outcome? One of the best shorts of the decade as all US equity indices crashed in the final quarter of 2018. For every $400 invested on this trade by shorting e-mini Dow futures you would have made $25,000! Not bad for a few weeks of work! #iotaf #markets #trading #strategy #stocks #bonds #forex #commodities #oil #gold #crypto

A post shared by IOTAF (@iotaf) on Dec 29, 2019 at 4:16am PST

6. Shorting WTI oil as US production soars

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IOTAF TOP 10 TRADES OF THE DECADE: # 6: Shorting WTI oil as US production soars, then trading OPEC and OPEC+ interventions and lack there of, resulted in some of the most profitable trading opportunities of the decade. It all started with crude oil prices recovering from the 2008 financial crisis and OPEC supply cuts causing prices to climb above $100/barrel, resulting in US shale producers ramping up production massively, essentially making the United States the largest crude oil producer in the world. As US crude production more than doubled, the market was still complacent and trading above $100/barrel. This discrepancy eventually ended, and when a technical breakout took place on the bottom of the wedge formation, oil crashed more than 70pct, making our trade one of the most profitable ever. For every $1000 investment in WTI crude oil futures you would have made $80,000 in profits. The following years were as good if not better, as OPEC first was unable to agree on a supply cut, sending prices tumbling 5pct in one day; followed by the eventual “production cut” deal made not only within OPEC but with countries outside of the cartel such as Russia and Brazil. The famous OPEC+ deal caused a huge rally in oil futures and our long trades once again made a lot of money. Then OPEC+ decided to ramp up production as WTI had risen above $75/barrel, making us go short on that announcement and making a killing on the short. Then OPEC+ once again decided to cut production and eventually extend and deepen the cuts as the Aramco IPO needed a strong oil price. Combine that with the Saudi oil attacks, reintroduction of Iran sanctions and plenty of verbal intervention by oil ministers etc, oil was definitely amongst the most profitable markets to trade last decade. All in all, our performance in oil was superb, with at least 250X our initial capital invested! #oil #opec #markets #trading #oilsupply #oilinventories #derivatives #gasoline #crackspread #iotaf #trading

A post shared by IOTAF (@iotaf) on Dec 29, 2019 at 8:58am PST

5. Going long Western Canada Select Crude Oil the day Alberta announced mandatory production cuts

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TOP 10 IOTAF TRADES OF THE DECADE: Number 5: Going long Western Canada Select Crude Oil the day Alberta announced mandatory production cuts. This trade made it to our top 10 because of how easy and straight forward it was. Essentially all you needed for this trade was a basic understanding of supply and demand and as soon as the Alberta government decided that a production cut was needed to stimulate prices, WCS, Canada’s oil benchmark, couldn’t go anywhere but up. Less supply = higher oil prices. We gathered one morning at the IOTAF offices after the news and decided to go all in on WCS. We did it via an ETF as well as derivatives contracts. The outcome? The easiest money we have ever made. Over 1000pct return on out of the money call options ! For every $1000 invested we made $10,000 in profits. Easy breezy lemon SQUEEZY! #iotaf #markets #oil #alberta #canadianoil #stocks #bonds #forex #tradingschool #montreal #miami #monaco #realmoneyteam

A post shared by IOTAF (@iotaf) on Dec 30, 2019 at 3:39am PST

4. Going long the FAANG+MT stocks

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TOP 10 IOTAF TRADES OF THE DECADE: #4: Going Long the FAANG+MT stocks: for someone who traded during the .com bubble of the 90s and the eventual burst in 2000/2001, it was an easy trade to go long and stay long the dominant players in the technology industry. In particular the ones that dominated their respective industries as well as newcomers who revolutionized the way we interact with others, watch TV and move from point a to point b. To us the key players were: Facebook: dominating social media, which is the new way we communicate and interact with others, and the best advertising tool ever created. Everyone has a Facebook, Instagram or wassapp account. Apple: dominating the communication and productivity devices we use on a daily basis. Put a phone, a laptop, a watch and an iPad on everyone on earth. Amazon; dominating the online market place which still only accounts for less than 20pct of retail sales. Netflix: dominating the way we watch TV shows and movies. Google: dominating the internet and everything around the internet. Tesla: dominating electric vehicles and following the biggest global trend towards a more efficient and healthier planet. And Microsoft, a pioneer in technology which reinvented itself into a giant in cloud services and software profitability. Being invested in all those companies, and the people who run them like Elon Musk and Jeff Bezos, proved to be one of the best trades of not only the decade but the century! A $1000 investment in each of this companies at the beginning of the decade would be worth $8000 in Microsoft, $10,000 in Apple and Facebook, $14,000 in google, $15,000 in Amazon, $21,500 in Tesla and a whopping $329,000 in Netflix!!! A combined portfolio of $7000 invested on January 1st 2010 with $1000 in each stock would now be worth $407,500!!!! I hope your portfolio manager managed that level of return because that’s how much we made for every $7000 invested in these stocks! A financial education beats traditional education !!! #iotaf #stocks #faang #microsoft #facebook #apple #amazon #netflix #google #tesla #tradesofthedecade #realmoneyteam #investments #beststocks

A post shared by IOTAF (@iotaf) on Dec 30, 2019 at 4:44am PST

3. Going long bonds as the Federal Reserve does a policy U-turn and decides to cut rates and re-expand their balance sheet

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TOP 10 IOTAF TRADES OF THE DECADE: Number 3: Going long bonds as the Federal Reserve does a policy U-turn and decides to cut rates and re-expand their balance sheet. This trade made our top ten because it required a very good understanding of fixed income markets and the federal reserve. After having hiked interest rates and contracted their balance sheet in 2018, the federal reserve decided to do a policy u-turn to sustain the economic expansion and cut rates three times during the summer of 2019. On top of that it decided to expand their balance sheet on what it called a not-QE expansion of $60 bln per month. Both factors, and an on/off trade war with China and risks of global growth slowdown from Europe to Asia caused bonds to skyrocket ! We played this trade perfectly by going long 20yewr+ bond ETFs, 30-year and ultra bond futures contracts and Options on the ETFs and futures. For every $400 invested in these trades we made $32,000 in profits! Who said bonds were boring?! #iotaf #markets #trading #bonds #toptrades #realmoneyteam

A post shared by IOTAF (@iotaf) on Dec 30, 2019 at 6:41am PST

2. The rise and fall of weed stocks

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IOTAF TOP 10 TRADES OF THE DECADE: Number 2: The rise and fall of weed stocks. This was an opportunity of a lifetime, for those like us who cashed out when the time was right. The day the federal government of Canada led by Trudeau passed legislation that would make cannabis consumption and growth legal in canada it was a no brainer to go Long every weed producer in the country. And that’s exactly what we did. The key to that trade was to ride the wave until the day when the first weed store opened to the public. And that’s also exactly what we did. The timing and execution of that trade was marvellous. The outcome? Well, $1000 invested in some of these stocks yielded an average of $50,000 at the top! Not bad for such an easy trade. The hard part of this trade was getting out as greed always prevents you from making the rational decision. Thankfully, all our teachings and training at Iotaf made us get out at the perfect time: one hour before the first store officially opened to the public. And that was the top for most of these stocks! We got in when nobody believed in this trade and we got out as the average retail trader was getting in! I guess that’s why we are the best while everyone struggles. We are the 1pct of traders that make what 99pct of traders lose! Thank you all for all those profits! It made it into a sensational decade full of money, travel and great times! #weed #cannabis #weedstocks #aurora #hexo #aphria #tilray #cronos #canopygrowth #stocks #traders #realmoney

A post shared by IOTAF (@iotaf) on Dec 31, 2019 at 9:06am PST

1. Without any dispute, the decade’s best trade was to be long bitcoin

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IOTAF TOP 10 TRADES OF THE DECADE: Number 1: without any dispute the decade’s best trade was to be Long bitcoin ! We are fortunate enough to have been introduced to crypto currencies from the early stages and this trade has definitely paid off! In 2008 the financial world was on its knees due to the fallout of the subprime lending market. With banks on the brink of collapse there was no better way to rescue the whole financial system, and the economy, but to print Trillions of dollars of new money to stimulate the global economies and to bail out the banks by passing the TARP (toxic asset relief program) and buying all toxic debt off their balance sheet, essentially taxing people and using the money to bail out the banks. In the process the federal reserve cut rates to essentially zero and introduced quantitative easing, a program which involves printing TRILLIONS of dollars to buy securities such as bonds and mortgage backed paper to estimulare the economy. During that time one thing became clear: the monetary system would never be the same and the need for a new “storage of value” currency was born. A digital currency which would have no central bank, would be completely decentralized using breakthrough blockchain technology that would ensure every transaction was true and unhackable while providing limited supply of these coins so that they would be inflation proof and preserve people’s wealth and value. Plus something so technologically advanced that would also serve as “means of exchange” and allow for easy transfer of funds to anywhere in the world without any intermediary like a bank. This amazing invention by a person nobody has met named “satoshi” is without a doubt the future of not only currencies but also a new monetary system. If you invested $100 into bitcoin when the first official exchange launched in 2010, that $100 would be worth $100,000,000 today and $200,000,000 at the height. Making bitcoin without a doubt the best investment of the decade!!!!!! Thank you all for reading this and have an amazing 2020!!!!! #bitcoin #crypto #iotaf #markets #trading

A post shared by IOTAF (@iotaf) on Dec 31, 2019 at 9:32am PST

Our Top 5 Trades of 2020

Joins us on Tuesday, January 14, 2020 at 6 pm, at our first public strategy session of the year, where we will discuss in detail our top 5 trades of the year.