ProfitScore Update – October 2023
Exploring the Impact of Basis Trading in Financial Markets The SEC is about to pass new rules impacting basis trading in US Treasuries. Why should you care? First, let me give you a little background on basis trading. In the complex world of finance, the…
ProfitScore Update – September 2023
To the clients and friends of ProfitScore: The Inverse Dance of Equities and VolatilityEquities and volatility, two vital financial metrics, often engage in a rhythmic dance, moving in opposite directions. Here’s a glimpse into their inverse relationship. The Inverse Tango: Historically, when stock prices (equities) rise,…
ProfitScore Update – August 2023
To the clients and friends of ProfitScore: In the previous month, we explored the consequences of passive indexing on correlations. This month, we shift our lens to optimizing correlations within portfolios. As finding uncorrelated asset classes becomes increasingly complex, we’ll delve into the merits of…
ProfitScore Update – July 2023
To the clients and friends of ProfitScore: One of the most fundamental and important parts of investing is achieving diversification through low or negative correlation. With the stratospheric rise in passive index investing, diversification is becoming harder and harder to find. Below is a chart…
ProfitScore Update – June 2023
To the clients and friends of ProfitScore: A recent study from the US central bank has set off alarms in the financial sector, signaling a record increase in American businesses under financial distress and the possibility of intensified ramifications from the Federal Reserve’s war on…
ProfitScore Update – February 2023
To the clients and friends of ProfitScore: With the rise in popularity of 0TDE (0 days to expiration) options, investors should be wise about the impact this might have on markets. Remarkably, more than 40% of S&P-related options have a same-day expiry, or 0DTE, according to…
ProfitScore Update – January 2023
To the clients and friends of ProfitScore: January was a good month for both equities and fixed income. After finishing 2022 down more than -18%, the S&P 500 rebounded in January, posting a positive return of 6.3%. Similarly, the U.S. Agg, being down -13.01% for 2022, bounced…
ProfitScore Update – December 2022
To the clients and friends of ProfitScore: Contrary to what most bulls want to hear, the bottom for this current bear market cycle may not be in yet. Historically, a bear market has never ended before a recession has begun. Here is a snapshot of…
ProfitScore Update – October 2022
Inflation Adjusted Equity/Bonds To the clients and friends of ProfitScore: With all the talk of inflation, there is one element that you don’t see much. The S&P is down -17.75% through October, but adjusting for inflation puts the S&P down -23.05%. For reference, the S&P…
ProfitScore Update – August 2022
To the clients and friends of ProfitScore: As has been previously mentioned ProfitScore has two trading constructs for both our treasury program and our equity program. Specifically for our Equity program, we use two systems, one is for low volatility and one is for high…
ProfitScore Update – July 2022
To the clients and friends of ProfitScore: One of the core tenants of ProfitScore trading discipline is the concept of “market states.” ProfitScore believes that knowing what market state you are in dramatically increases your chance of success. ProfitScore specializes in trading equities and US…
ProfitScore Update – June 2022
To the clients and friends of ProfitScore: ProfitScore is primarily a research and development firm, we try and outsource as many business processes as possible that detract from our core. One of our most important fundamentals at ProfitScore is “hypothesis-driven” research where ideas are first…