Couldn't agree more. Your AMZN thesis on AWS is totally solid. Considering how AI is accellerating, what if the generative AI boom pushes AWS demand even harder than current projections? That 'boring roller coaster' could be the calm before a very fun storm.
My portfolio was a (boring) rollercoaster this week too. Drew down to -0.4% and ended up 0.4% on the week.
The explanations of position selection were helpful. Lots of thoughts and too little time to dictate them all. Three major questions I think you could help with:
1) In your options trading, are you interested in holding these till expiration, or is this more of a short-term play with a long runway, just in case? It's unclear to me why the April strike was selected for Amazon over a LEAPS. Not sure how you're accounting for timing in this trade, and whether you're interested in holding through the tail risk of February earnings, if you intend to roll, etc.
2) When selecting between stock positions and leveraged single-stock ETFs, what is the criteria (even if it's rough) for deciding between the two instruments? I've only ever utilized leveraged positions for extremely short-term trading (1 week max) because I'm not willing to bear the black swan risk of getting wiped out x2 or x3 by holding these positions long-term, but I'm interested to hear your reasoning.
3) When selecting between stocks, what is your prioritization between fundamental and technical analysis? Do you tend to value one over the other? And does that influence your time frames for the trades? I ask because I have never considered holding leveraged positions for fundamental reasons, since I have assumed that LEFTs are short-term trading vehicles and that technicals reign supreme on short timeframes. Perhaps there is a difference in opinion about how long one should or could hold these kinds of 2-3x leveraged instruments.
Very curious to hear your thoughts. Thanks again for the time you take to reply to these. I know I don't ask easy questions.
1) That’s a good way to frame it: a short-term trade with a long runway. The April AMZN contract was selected primarily due to liquidity (high open interest), a reasonable strike relative to spot, and implied volatility in my preferred range (~30–50). That IV level gives enough movement potential without being so elevated that stops are constantly threatened.
The intent isn’t to hold to expiration. I’m looking for opportunistic gains (generally 20%+), similar to the META call, though that target is flexible depending on price action and broader conditions. If there’s no attractive exit ahead of AMZN earnings, I would likely hold through earnings while tightening risk; for example, raising the stop to around -30% if price action allows. I don’t currently plan to roll the contract.
2) On leverage: I agree with your characterization that leveraged ETFs are typically short-term instruments, and I manage them as such from a risk perspective, even if the intended holding window can extend into the 1–4 month range.
For example, once METU crossed ~10% unrealized gains, the stop was moved to breakeven, eliminating downside risk. From there, profits are managed incrementally, trimming or hedging as gains reach 20% and beyond. While my selection criteria for leveraged positions in this portfolio has been intentionally loose, that’s a function of the portfolio itself being highly aggressive and experimental.
In personal accounts, I do intend to use leverage selectively, but with much stricter criteria. I haven’t historically used leveraged ETFs in those portfolios (mainly due to being under 18), which is why I don’t yet have a rigid checklist for when a stock “earns” leverage.
3) As for fundamentals versus technicals: both matter, but they play different roles. Fundamentals shape conviction and direction, while technicals largely determine timing and risk management--especially with leveraged instruments.
My (admittedly non-consensus) view is that if you have high conviction in a directional move over a defined time horizon, say, a 30% upside versus a 10% downside over a few months — then controlled leverage can make sense, provided risk is actively managed. That doesn’t make it universally appropriate, but it fits my risk tolerance for this portfolio.
Appreciate you pushing on these points. They’re good questions, and they help clarify where my thinking differs from more conventional approaches.
Thanks for taking the time to go over these. I appreciate it.
While reading your post, I did have another question that I thought would have a quick answer. If any, what benchmark are you putting yourself against with this portfolio?
I understand that there are issues with benchmarking in general, especially with actively-traded portfolios. So I was curious to hear your thoughts on that. I wasn't sure if you had a native benchmark that you already watch, or if you prefer not to have one at all.
The notes on OI and IV makes a lot of sense. Lots of moving parts to consider; it's a major reason for why I don't use them as much as I could likely benefit from. Watching how these positions continue to unfold will be instructive, I imagine.
It's very interesting to see the dichotomy you've created between this portfolio and the personal account. Is it that you're not suitable for this strategy, or that you believe your personal strategy is superior? I did not want to assume that you lacked confidence in this strategy, per se. You come off as confident in your abilities as a trader. Not trying to poke at anything -- just to understand.
I get that it's easier to take extreme positions in paper than it is in a live account. That's why I bring up personal risk tolerance. We can build portfolios that are not necessarily for us. Just trying to understand if that's the reason or if it's a lack of confidence in this portfolio to deploy into real capital (very fairly, you called it an experiment) or something else I haven't considered.
When my free month expires, I'll be re-upping it for sure. These kinds of candid conversations are helpful to my thinking at large, and the more traders/investors that I can engage with at this level, the better.
I don’t anchor this portfolio to a single formal benchmark, but I do often reference the S&P 500 to provide context for the magnitude of moves (e.g., “outperforming the S&P this week”). If I were to choose a more natural benchmark, the NASDAQ would likely be the closest fit given the portfolio’s composition, though I treat that more as a 'directional reference' than an actual target.
No offense taken at all. I’m comfortable saying that I’m not yet willing to deploy this strategy in my personal accounts. That’s less about doubt in the ideas themselves and more about acknowledging where I am in the learning curve with leverage and aggressive positioning. This portfolio gives me the space to explore those mechanics, make mistakes, and refine the process in a way that’s transparent for readers and constructive for me.
I wouldn’t frame one strategy as superior to another, investing is highly personal, and what works depends heavily on risk tolerance and objectives. There is meaningful overlap between this portfolio and my personal holdings, with the primary difference being the use of leverage.
I appreciate you engaging with the work at this level, and I’m glad you’re finding value in it.
You're welcome, Nate! Looking forward to a time when there are more folks here as well. But without the first person leaving comments, few others will. I see your notes get a lot more traction than article comments, but I think that's common for a lot of finance writers.
On benchmarking: I would have assumed that NDX is the benchmark (followed your logic there), but I understand that SPX is the most popular index, and so for publishing's sake, that checks out. I wonder what a natural leveraged benchmark would look like. It feels a little crude to use an unlevered instrument to measure a portfolio built on the aggressive use of leverage as its core strategy. But just using TQQQ would also feel crude, I think. Hard to say from my view what would be appropriate.
Definitely understand that about investing as a personal endeavor. I assumed that you are in the "accumulate as much as possible" phase, and perhaps wrongly, because it is based on this portfolio, assumed that you are the most aggressive percentile of investors (not traders, per se). It's interesting because I don't get that as much from the articles that you write about fundamentals or the videos you make about how not to fall for gurus and overly aggressive promises, and hence, dichotomy.
I'll be very curious to follow up about how your conviction in this strategy evolves over time, and if you eventually deploy it as a whole or in pieces (if you do).
Yes, it’s difficult to find a benchmark for this type of portfolio; hence why I haven’t set one in particular.
That is a good catch! I try to inspire beginners to just start investing and developing their own strategy without being sold the ‘millionaire overnight’ facade—especially on social media. Once my newsletter is clicked on, I blare the importance of fundamentals and the tried and true ways of finding ‘good buys’ so others can educate themselves without being sold too. As for this portfolio, I’m experimenting ways to take the same stocks with solid fundamentals and capitalizing to the max with them, even if that means more risk.
And yes, as previously mentioned, not ready for the big leagues with this strategy just yet. But I’ll keep you updated if that changes!
Couldn't agree more. Your AMZN thesis on AWS is totally solid. Considering how AI is accellerating, what if the generative AI boom pushes AWS demand even harder than current projections? That 'boring roller coaster' could be the calm before a very fun storm.
My portfolio was a (boring) rollercoaster this week too. Drew down to -0.4% and ended up 0.4% on the week.
The explanations of position selection were helpful. Lots of thoughts and too little time to dictate them all. Three major questions I think you could help with:
1) In your options trading, are you interested in holding these till expiration, or is this more of a short-term play with a long runway, just in case? It's unclear to me why the April strike was selected for Amazon over a LEAPS. Not sure how you're accounting for timing in this trade, and whether you're interested in holding through the tail risk of February earnings, if you intend to roll, etc.
2) When selecting between stock positions and leveraged single-stock ETFs, what is the criteria (even if it's rough) for deciding between the two instruments? I've only ever utilized leveraged positions for extremely short-term trading (1 week max) because I'm not willing to bear the black swan risk of getting wiped out x2 or x3 by holding these positions long-term, but I'm interested to hear your reasoning.
3) When selecting between stocks, what is your prioritization between fundamental and technical analysis? Do you tend to value one over the other? And does that influence your time frames for the trades? I ask because I have never considered holding leveraged positions for fundamental reasons, since I have assumed that LEFTs are short-term trading vehicles and that technicals reign supreme on short timeframes. Perhaps there is a difference in opinion about how long one should or could hold these kinds of 2-3x leveraged instruments.
Very curious to hear your thoughts. Thanks again for the time you take to reply to these. I know I don't ask easy questions.
Cheers!
Hey Jack — appreciate the thoughtful questions.
1) That’s a good way to frame it: a short-term trade with a long runway. The April AMZN contract was selected primarily due to liquidity (high open interest), a reasonable strike relative to spot, and implied volatility in my preferred range (~30–50). That IV level gives enough movement potential without being so elevated that stops are constantly threatened.
The intent isn’t to hold to expiration. I’m looking for opportunistic gains (generally 20%+), similar to the META call, though that target is flexible depending on price action and broader conditions. If there’s no attractive exit ahead of AMZN earnings, I would likely hold through earnings while tightening risk; for example, raising the stop to around -30% if price action allows. I don’t currently plan to roll the contract.
2) On leverage: I agree with your characterization that leveraged ETFs are typically short-term instruments, and I manage them as such from a risk perspective, even if the intended holding window can extend into the 1–4 month range.
For example, once METU crossed ~10% unrealized gains, the stop was moved to breakeven, eliminating downside risk. From there, profits are managed incrementally, trimming or hedging as gains reach 20% and beyond. While my selection criteria for leveraged positions in this portfolio has been intentionally loose, that’s a function of the portfolio itself being highly aggressive and experimental.
In personal accounts, I do intend to use leverage selectively, but with much stricter criteria. I haven’t historically used leveraged ETFs in those portfolios (mainly due to being under 18), which is why I don’t yet have a rigid checklist for when a stock “earns” leverage.
3) As for fundamentals versus technicals: both matter, but they play different roles. Fundamentals shape conviction and direction, while technicals largely determine timing and risk management--especially with leveraged instruments.
My (admittedly non-consensus) view is that if you have high conviction in a directional move over a defined time horizon, say, a 30% upside versus a 10% downside over a few months — then controlled leverage can make sense, provided risk is actively managed. That doesn’t make it universally appropriate, but it fits my risk tolerance for this portfolio.
Appreciate you pushing on these points. They’re good questions, and they help clarify where my thinking differs from more conventional approaches.
Hi Monk (Monk Investments? Something else?),
Thanks for taking the time to go over these. I appreciate it.
While reading your post, I did have another question that I thought would have a quick answer. If any, what benchmark are you putting yourself against with this portfolio?
I understand that there are issues with benchmarking in general, especially with actively-traded portfolios. So I was curious to hear your thoughts on that. I wasn't sure if you had a native benchmark that you already watch, or if you prefer not to have one at all.
The notes on OI and IV makes a lot of sense. Lots of moving parts to consider; it's a major reason for why I don't use them as much as I could likely benefit from. Watching how these positions continue to unfold will be instructive, I imagine.
It's very interesting to see the dichotomy you've created between this portfolio and the personal account. Is it that you're not suitable for this strategy, or that you believe your personal strategy is superior? I did not want to assume that you lacked confidence in this strategy, per se. You come off as confident in your abilities as a trader. Not trying to poke at anything -- just to understand.
I get that it's easier to take extreme positions in paper than it is in a live account. That's why I bring up personal risk tolerance. We can build portfolios that are not necessarily for us. Just trying to understand if that's the reason or if it's a lack of confidence in this portfolio to deploy into real capital (very fairly, you called it an experiment) or something else I haven't considered.
When my free month expires, I'll be re-upping it for sure. These kinds of candid conversations are helpful to my thinking at large, and the more traders/investors that I can engage with at this level, the better.
Cheers!
Jack, feel free to call me Nate.
I don’t anchor this portfolio to a single formal benchmark, but I do often reference the S&P 500 to provide context for the magnitude of moves (e.g., “outperforming the S&P this week”). If I were to choose a more natural benchmark, the NASDAQ would likely be the closest fit given the portfolio’s composition, though I treat that more as a 'directional reference' than an actual target.
No offense taken at all. I’m comfortable saying that I’m not yet willing to deploy this strategy in my personal accounts. That’s less about doubt in the ideas themselves and more about acknowledging where I am in the learning curve with leverage and aggressive positioning. This portfolio gives me the space to explore those mechanics, make mistakes, and refine the process in a way that’s transparent for readers and constructive for me.
I wouldn’t frame one strategy as superior to another, investing is highly personal, and what works depends heavily on risk tolerance and objectives. There is meaningful overlap between this portfolio and my personal holdings, with the primary difference being the use of leverage.
I appreciate you engaging with the work at this level, and I’m glad you’re finding value in it.
You're welcome, Nate! Looking forward to a time when there are more folks here as well. But without the first person leaving comments, few others will. I see your notes get a lot more traction than article comments, but I think that's common for a lot of finance writers.
On benchmarking: I would have assumed that NDX is the benchmark (followed your logic there), but I understand that SPX is the most popular index, and so for publishing's sake, that checks out. I wonder what a natural leveraged benchmark would look like. It feels a little crude to use an unlevered instrument to measure a portfolio built on the aggressive use of leverage as its core strategy. But just using TQQQ would also feel crude, I think. Hard to say from my view what would be appropriate.
Definitely understand that about investing as a personal endeavor. I assumed that you are in the "accumulate as much as possible" phase, and perhaps wrongly, because it is based on this portfolio, assumed that you are the most aggressive percentile of investors (not traders, per se). It's interesting because I don't get that as much from the articles that you write about fundamentals or the videos you make about how not to fall for gurus and overly aggressive promises, and hence, dichotomy.
I'll be very curious to follow up about how your conviction in this strategy evolves over time, and if you eventually deploy it as a whole or in pieces (if you do).
Cheers!
Yes, it’s difficult to find a benchmark for this type of portfolio; hence why I haven’t set one in particular.
That is a good catch! I try to inspire beginners to just start investing and developing their own strategy without being sold the ‘millionaire overnight’ facade—especially on social media. Once my newsletter is clicked on, I blare the importance of fundamentals and the tried and true ways of finding ‘good buys’ so others can educate themselves without being sold too. As for this portfolio, I’m experimenting ways to take the same stocks with solid fundamentals and capitalizing to the max with them, even if that means more risk.
And yes, as previously mentioned, not ready for the big leagues with this strategy just yet. But I’ll keep you updated if that changes!