Executive Summary
Monotone chatter and feel-good tales.
China has been ranging for a decade.
A fifty percent return on equity in two months is hot enough.
1. Recap Situation
We introduced the MacDoζe Winter-Blows series and countered it with the monotony of Saint Nicholas chatter. We have empirically proven: that annual December rally folly is a lie. We are all adults, so let's get back to data, probabilities, and intelligent structuring of investment ideas, instead of feel-good tales for toddlers.
We also mentioned China and were convinced it would be back in the 2019-2020 trading ranges. It looks like we weren’t wrong about that, either.
Check out the original BrainDoζer below.
2. Why Now?
We believe that our maximum profit target at twenty-eight could be an inflection point. It might go north or south quickly from here in Q one. We are comfortable with a 52% return on risk capital in less than two months and look forward to the trade close.
3. Trade Execution
3.1 Trade Entry - Nov 16, 2022
Total: 2.60 Credit.
3.2 Trade Exit - Jan 4, 2023
Total: 1.35 Debit.
The absolute return on this trade is
2.60 - 1.35 = 1.25
The equity at risk was 2.40, resulting in a return on equity of
1.25 / 2.40 = 52.1%