Add some keywords to the search function to narrow it down --->
I just signed up, where do I log in?
There are no logins or member areas at VTS. I realize you may be used to that in other services, but I've chosen to do everything through the daily email so that people can get everything in a single place.
Every VTS daily email will have:
Section 1: All the Volatility Dashboard metrics updated just before the daily email goes out.
Section 2: The blog section which will usually include an article or video.
Section 3: All the trade signals clearly explained so you can follow any, or all of the strategies quickly and easily.
Everything you need to follow VTS is in the daily email.
What time do VTS emails go out?
VTS emails are sent out every single trading day, even when there are no trades that day.
The official time for VTS emails is they are sent out
before 12:00 pm eastern time but I often send them a little early between 11:00 - 12:00 eastern time.
In nearly 8.5 years running VTS I've never missed a deadline, so expect the VTS daily email by 12:00 pm eastern time at the latest.
What time do VTS Options emails go out?
VTS Options emails are only sent out on days when there are new trades, or closing trades.
* Expect about 8 VTS Options emails per month on average.
VTS Options emails, on days when there are new trades, are sent out before 1:00 pm eastern time so you'll have several hours to execute any positions.
I'm not getting any emails, what do I do?
If you're not receiving any emails from me, please check your junk folder
These days spam filters are getting more strict, so if there's nothing in your inbox you can check the junk folder first and approve the sender. Emails will only ever come from these email addresses depending on the service you're subscribed to:
Please approve those senders if you're having issues getting the emails.
Why am I getting multiple identical emails?
Due to spam filters becoming more strict these days, I feel it's safer if I send out both a primary email and then a secondary "backup" email as well. These will all be clearly titled for you.
Primary titled: "
Daily Trade Signals (the date)"
Secondary titled: "
Backup - Daily Trade Signals (the date)"
Please just get in the habit of reading the primary and deleting the one that says backup.
* I also have a free general VTS newsletter. Occasionally when I feel one of my daily blogs or videos is interesting I will send it to the free VTS newsletter.
These emails will always be labelled with a
specific title. Anytime you see a blog with a formal title in it, you can delete that too. Paying subscribers have already seen these.
I can't find my question in the Q&A
If you can't find your question in this list:
1) Use the search function. It's the little icon at the top right. Type in a keyword or two and see if anything comes up.
2) Email me directly and ask ( firstname.lastname@example.org )
* I will be adding to this list constantly so feel free to check back on occasion.
You have so many articles and videos, where do I start?
Apologies, I launched VTS in January 2012 and have done a daily blog every day since. This means there is a massive amount of content and it can be a little overwhelming for new members.
1) Everything I deem most important will have a blue hyperlink in the VTS daily emails. If you want to get started I'd focus on those. The strategy videos, the specialty volatility dashboard metrics, the Cash VIX Term Structure etc.
2) All my videos are on the
YouTube channel here. You can subscribe to the channel, hit the notification bell next to it, bookmark it, and start watching anything that interests you.
3) In the "Blog" section on my website, you can click
articles and see if any of those interest you.
I just signed up, do I take the trades now or wait for new positions?
Thanks for joining the VTS Community! There's two ways people general do this:
1) Start now. Since all the trades I take are optimized for the day they are given, technically every daily trade signal is actionable for that day. If you feel comfortable you can take the positions you see in the daily email and start immediately.
2) Wait for new positions. If you feel more comfortable, you can also wait for the next fresh change of position in a strategy before starting. So for example if we are currently in GLD Gold in the Tactical Balanced strategy, you could wait until the strategy moves from GLD Gold into IEF Bonds and then take the IEF Bonds trade when it happens.
* If you're signed up for
VTS Options, for those I would just wait and only take any new trades. Options trades are more time sensitive, so I wouldn't recommend taking any of the trades we have open. Wait for fresh new positions before jumping into VTS Options.
How can I upgrade from VTS to include VTS Options as well?
That's great, glad you're interested in exploring options trading as well. I do feel like it's a fantastic diversification tool for a broad portfolio, and it's more fun than regular trading as well!
Please email me (email@example.com) and let me know you want to upgrade, I can do it for you.
VTS: 80$ per month
VTS + VTS Options = 96$ per month
Do you offer an annual discount?
Yes, if you're interested in the service and really want to dive into it for a year, I do offer a substantial discount.
Annual subscription to everything, both VTS + VTS Options:
921$ / year
* Equates to 76.75$ / month, a 20% discount on the monthly subscription.
Click here to subscribe
What is the minimum capital required to follow?
As with all investing, higher levels of capital mean it's more efficient in terms of trade fees and scaling allocations.
Having said that, I do realize we all start with smaller accounts and I have made all my strategeis accessible for people trading on smaller account sizes. It's not a hard rule, but in general:
To follow VTS: Above 5,000$ it will start to become more efficient
To follow VTS Options: The model portfolio is based on a 10,000$ account, and all trades can be taken in the exact allocations on just 10,000$ in capital.
* If you have less than that, I suggest skipping the short put trades which are the most capital intensive. If you do that, it can be done on about 5,000$ of capital.
How should I allocate my capital to the strategies?
I'm not a registered advisor in your area and I can't give out any personalized investment advice. How you allocate your portfolio will depend on you and your long term investing goals.
However, my diversified
Total Portfolio Solution is what I feel is the
optimzed way to allocate and it's what I personally do. If you'd like to track my own investing as close as you can, I invite you to allocate the same way.
* These allocations do change periodically depending on market conditions, and the most up to date allocations are always clear in the daily email. Currently these are the portfolio allocations:
Do I have to follow all the strategies for it to work?
How you allocate your portfolio will be up to you, but no you don't have to follow everything I do exactly. If you're experienced and you understand the risks, you can make adjustments to match your goals.
- For example, some subscribers just follow one or both of the Volatility specific strategies (Tactical Volatility strategy and VB Threshold strategy)
- Others are more interested in traditional asset classes and will only follow the Tactical Balanced strategy and Defensive Rotation strategy.
It's up to you. I trade exactly the
Total Portfolio Solution but you can design your own ideal portfolio. Just note, the more you deviate from what I do, the less reliable the correlations may be. Smaller changes are ok, but you may want to avoid large deviations.
How long have you been managing VTS?
I launched VTS in January 2012 with the following strategies and all three have remained core positions the entire ~8.5 years.
Tactical Balanced strategy - 2012
Tactical Volatility strategy - 2012
VTS Options - 2012
There are also several other strategies that have made appearances in the Total Portfolio Solution depending on market conditions, and are always on stand by if conditions warrant their inclusion.
Aggressive Vol strategy - 2012
Conservative Vol strategy - 2012 (retired now since VB Threshold is highly correlated)
VB Threshold strategy - 2015 (currently in the TPS)
Breakpoint strategy - 2016
Defensive Rotation strategy - 2020 (currently in the TPS)
Where can I see the trade history of the strategies?
For many years I used to post that information on the website. Unfortunately I've had some issues with "copycat" services subscribing and using my signals as their own to resell. My only recourse against this is to not provide the full trade history. It's not a cure, but the combination of having no trade history, plus no ability to intelligently answer questions about navigating past environments, it's my hope that their subscribers will be unsatisfied with their answers to questions and realize it's not a legit service.
It's one of those situations where a few bad actors have ruined it for everyone, I apologize for that.
Remember, all the monthly results are on the website, and if you ever want to know anything about specific market periods, email me and I'll send you a chart of the performance over that time period and why it happened the way it did.
Where can I download the historical data for the Volatility Barometer
This is a VERY common question, and I'm happy to see it! The VTS Volatility Barometer is in my opinion the best measure of market volatility out there. I'm glad so many people want that data.
Currently, this is my proprietary information and must remain in house :)
I may release those values at some point in the future, or perhaps release time delayed values, but currently the only way to see those values is through subscription.
How do I access VTS Options?
For 8 years from 2012 through 2019, VTS Options was part of the main VTS service, it was all combined in one.
However, since VTS has been growing every year and the body of work is substantial at this point, it's become necessary to split into two dedicated services and I did that in late 2019.
Some VTS subscribers aren't interested in options trading and I don't want to overload the regular VTS emails with options content and diminish their experience.
Now that VTS Options is a separate service, I can expand the options trading discussion and really dive into the wonderful world of options!
VTS: Tactical ETF rotation strategies
VTS Options: Dedicated Options trading - Email me if you want to upgrade for 16$ / mo.
Do I need special permission to trade options?
Yes, you'll have to contact your broker and request options trading approval. Most brokers have different options trading levels.
- To trade just the Tactical Volatility strategy, the lowest level of options approval is enough. This strategy only uses long only puts and calls which is considered level 1 so any basic permission is enough. Nearly all brokers should give you this permission if you ask.
- To access the full VTS Options portfolio, you'll need higher levels of approval that include spreads and naked positions. Each broker has different requirements to be granted approval, but they tend to be based on experience. So if you tell them you've had experience trading options that should be enough.
* If you don't yet have experience, it'll take time to build it up to gain permission, so you may consider opening a
paper trading account and following along with the strategies until you do get approval for the higher level spreads.
Can I trade the Tactical Volatility strategy without using options?
The VTS Tactical Volatility strategy simulates short volatility and long volatility positions through what is called stock replacement. By using long put options and long call options, we can simulate the Volatility ETPs and make them safer and more profitable.
Short Volatility positions - We use Long VXX Put Options
Long Volatility positions - We use Long 1/2 VXX Call Options
If you don't want to use options, you can substitute those with volatilty ETPs:
For Short Volatility positions - Use Long SVXY instead
For Long Volatility positions - Use Long 1/2 VXX instead
* The 1/2 VXX means that you'll only allocate 1/2 of capital to those long volatility trades.
Using the volatility ETP replacements should accurately track the Tactical Volatility strategy with only minor differences over time.
Are the VTS Options allocations based on the options portfolio only, or the Total Portfolio Solution?
VTS Options is a dedicated service, so all allocations that I state in the VTS Options emails are for the options portfolio only.
Example, if VTS Options takes an Iron Condor trade with a 20% allocation, that means it's 20% of the VTS Options portfolio size. Any capital you've dedicated to the VTS Options service will be allocated 20% to that trade in the example.
* Now because VTS Options is only 20% of the Total Portflio Solution, a 20% Iron Condor in the VTS Options strategy would only be 4% of the Total Portfolio Solution.
Click here for an example of a VTS Options email. The trade is a 5% allocation, and it means it's
5% of VTS Options only.
Are the VTS Total Portfolio Solution results real or a backtest?
The short answer: Real since January 2012.
The long answer: I go over this in detail in this blog post here:
Real performance vs backtests
Why don't you short the S&P 500 instead of buying gold? (Tactical Balanced strategy)
Short answer: I'm only ever holding gold in the Tactical Balanced strategy during times of elevated fear and high market volatility. During these times, the performance of gold is not only much higher, but also smoother with lower drawdowns.
Long answer: I go over this in detail in this blog post:
Short S&P 500 instead of Gold?
Do you offer private coaching or one on one mentoring?
No, everything I do is community wide to help everyone as much as I can.
To be honest I'm not a believer in the "mentoring" services out there and I don't find them to be of much value for people. The vast majority are just taking advantage of people's lack of experience.
If you're looking for specific advice, you'd be better off just paying a registered advisor who is licensed to address your personal investment situation. Any "mentors" or "guru's" out there are not going to be legally allowed to offer any specific advice to you. And if they are, that's illegal. Only registered advisors in your specific jurisdiction can address your personal situation.
I manage VTS from the perspective of sharing every detail about my own trading, my own portfolio, and my own investing philosophy. Naturally it applies to a lot of other people out there as well and if you find value in it then great, but I'm not registered in your jurisdiction and can't offer any specific investment advice to you.
Fortunately, I have thousands of articles and videos you can learn from completely free :)
Can I contact you directly to speak?
Due to the fact that I'm managing a very large community, I would definitely prefer people try to get all their questions answered through the website, the articles and videos I release, and through email.
However, if you have an important issue to discuss and it can't be done through the regular channels, then yes we can set up a time to speak either through Skype, or video calls like FaceTime, Google Hangouts, Zoom etc.
When I allocate my capital to your VTS strategies, do I put 100% of my money in each trade position?
I can't give out any personalized investment advice, but if you choose to follow the VTS Total Portfolio Solution in the allocations that I detail in the daily emails, then here's how it's done.
20% Tactical Balanced strategy (MDY, IEF, GLD)
- You'll allocate 100% of the capital reserved for this strategy into the positions we take.
Example) If we are allocated to MDY, you'd put 100% of your capital reserved for the Tactical Balanced strategy into MDY. It's all capital in the trade.
20% Tactical Volatility strategy (VXX Puts, cash, 1/2 VXX Calls)
You'll allocate 100% of the capital reserved for this strategy into the positions we take.
Example) If we are allocated to VXX Puts, you'd put 100% of your capital reserved for the Tactical Volatility strategy into VXX Puts. It's all capital in the trade.
* Note, our VXX Calls trades only use 1/2 allocation size, so you'd put 50% of your Tactical Volatility capital into VXX Calls, and 50% would remain in cash.
20% VB Threshold strategy (TLT, ZIV, SPY, TLT, 1/2 VXZ)
You'll allocate 100% of the capital reserved for this strategy into the positions we take.
Example) If we are allocated to ZIV, you'd put 100% of your capital reserved for the VB Threshold strategy into ZIV.
* Note, our VXZ trades only use 1/2 allocation size, so you'd put 50% of your VB Threhsold capital into VXZ, and 50% would remain in cash.
20% Defensive Rotation strategy (VGLT, VIG, VPU)
You'll allocate 100% of the capital reserved for this strategy into the positions we take.
Example) If we are allocated to VPU, you'd put 100% of your capital reserved for the VB Threshold strategy into VPU.
20% VTS Options strategy (fully dedicated options service)
Consider this an entirely separate service, and I give full trade allocations for each position we take so you'd just allocate based on those instructions in the emails.
What are the tax implications of following your strategies?
There's three reasons why I don't address tax implications for individual subscribers:
1) I'm not a tax expert and it would be irresponsible for me to speak on what I haven't extensively studied. I try to stay in my own lane and tax law isn't my expertise.
2) VTS community members are from all over the world and naturally every country has different tax laws.
3) Even within the same country, every individuals tax situation will be different depending on their income, their job, their family structure, etc.
It would be best to consult a tax expert in your area to make sure you are getting the correct information.
If I miss a trade signal, do I take the trade the next day or skip it?
All the VTS trade signals in the daily emails are actionable on the day they are sent. That means that if you miss a trade signal, or if you're a new sign up and still in cash, it's perfectly fine to take any of the trade signals on any day that the daily email still shows that position is active.
Example: If the Tactical Balanced strategy went long MDY Stocks on the 1st of the month, and you joined on the 10th of the month and are still in cash, if the daily trade signal says "Maintain current Long MDY Stocks position" it means that even if you're not currently in the trade, you can take the trade that day.
* Now some people do like to wait for the next fresh change of position and that's fine if you prefer that. But it's also ok to take any of the trades in the daily emails on the day they are sent. Those signals are active trades to both maintain if you're in it already, or initiate it if you're not yet in it.
For VTS Options:
Because options trades are more time sensitive, if you miss a trade signal it's best to skip that trade and only take any new positions on the same day they are sent.
Can I trade your strategies in my IRA account? (RRSP account for Canadians)
You'll have to contact your broker if you have any issues with this as I'm not American and don't address specific account structures. Having said that, as I understand it:
Since VTS strategies use ETFs and long only single leg options, all the VTS strategies should be accessible in tax sheltered account types. Again though if you have issues please contact your broker.
For VTS Options:
Since some of our options trades require margin accounts, there will be several of our trades that aren't accessible in cash accounts like IRAs or RRSPs. Due to this, it would be best to follow VTS Options in non tax sheltered accounts.
* If you are experienced you could use both account types, placing trades within the IRA that are allowed, and any that aren't would be placed in non IRA accounts.
My 401k account doesn't have an option for gold, what do I do?
I'm not American and have no experience with 401k accounts so it would be best to contact your employer for assistance here, but I've had numerous subscribers mention that finding funds for gold is difficult within 401k accounts.
If you're in this situation you may consider holding bonds instead of gold. The performance won't match exactly, but both bonds and gold positions within the Tactical Balanced strategy are for safety when we don't want to be holding stocks. So you may replace gold for a broad bond market fund for that purpose.
I live in Europe and don't have access to US based ETFs due to MiFID II, KID, PRIIP regulations, what do I do?
I have a full article you can check out on this subject
(European Investing Solutions)
1) ETF replacements. You can contact your broker as there are several European based ETFs that will be suitable replacements for the US based ETFs my strategies use.
2) Using stock replacement through options is another alternative that may work. Since stock replacement involves long only options, these may be accessible for you. I have a 2-part stock replacement series here you can check out if you want to know how it's done. When you get used to it it's just about as quick and easy as buying ETFs so don't let the options component scare you.
What is the Sharpe Ratio? What does the Sharpe value mean?
The Sharpe Ratio is a metric that measures the risk adjusted return of a portfolio or strategy. By taking into account both the rate of return vs a risk free rate, as well as the standard deviation of the return, it's a way to better measure the long term effectiveness of a strategy or portfolio.
Sharpe Ratio values > 0 mean the portfolio/strategy is better than the risk free rate
Sharpe Ratio values < 0 mean the portfolio/strategy is worse than the risk free rate
* The higher the Sharpe Ratio value the better
What is the Ulcer Performance Index? What do Ulcer Performance Index values mean?
The Ulcer Performance index is a metric that measures the risk adjusted return of a portfolio or strategy. By taking into account the rate of return vs a risk free rate, as well as the standard deviation of those returns, it's a better measure of the long term effectiveness of a portfolio/strategy.
The Ulcer Performance Index ONLY uses negative returns in the standard deviation calculation, which means it's a much more useful and effective metric than the Sharpe Ratio.
Ulcer Performance Index values > 0 mean the strategy is better than the risk free rate
Ulcer Performance Index values < 0 mean the strategy is worse than the risk free rate
* The higher the Ulcer Performance Index value the better
What is Maximum Drawdown? What do Maximum Drawdown values mean?
Maximum Drawdown is a metric that measures the largest peak to trough loss for a portfolio or strategy. It is in my opinion one of the most important, yet most overlooked metric for measuring the long term effectiveness of a portfolio/strategy.
What is Correlation to the S&P 500? Why is Correlation to the S&P 500 important?
Correlation is a metric that measures how closely one asset or strategy tracks the performance of another asset or strategy. So correlation to the S&P 500 is a measure of how closely an asset or strategy tracks the performance of the S&P 500.
The S&P 500 is the largest stock market index in the world and the most widely tracked benchmark for investing performance. The problem with the S&P 500 though, like any stock market index, is it suffers very large drawdowns (losing periods) during recessions.
Investors who set up their portfolios to closely track the stock market will see their investment account do well during bull markets, and do very poorly during bear markets. This cycle of ups and downs causes long term performance to suffer greatly.
In my opinion one of the most important performance metrics is showing a lower correlation to the S&P 500, which allows investors to get off the hampster wheel and actually make long term forward progress.
How do we use risk adjusted return metrics to improve our investing results?
Understanding and using risk adjusted metrics can help investors both properly assess investing performance, as well as improve their long term investing results.
Trading strategies and structuring a portfolio to show a high Sharpe Ratio, high Ulcer Performance Index, low Maximum Drawdown, and low Correlation to the S&P 500 can greatly improve results.
What trading platform should I use? Which banks have the best software?
These days most of the major trading platforms are pretty competitive and are all going to have all the functionality you need to execute any of the trades at VTS. There's no special platform or additional requirements needed for our trades so you can just use what you're comfortable with. For me personally, I use two:
ThinkorSwim from TD Ameritrade. ThinkorSwim (TOS) is my favourite because of how nice it looks, so all the videos you see me make are using TOS. It's also very user friendly and easy to use so I could definitely recommend it to any traders out there. The analysis tools aren't the best in the industry, but I find them pretty good and definitely adequate for most people's needs. There's backtesting software, scanners, easy to use paper trading if you're a beginner trader and don't want to use live capital yet, TOS has everything you need.
Interactive Brokers. The main reason why I also use Interactive Brokers (IB) is for the cheaper commissions. Now these days even commissions are getting very competitive and there isn't as much of a difference, but I still execute some of my trades with IB. However I have to warn you in advance, their trading platform is just about the ugliest I've seen and compared to TOS and a few others, IB and their Trader Workstation looks like it was designed in 1980's. But I assure you, beyond the appearance, it's robust and definitely good enough to handle anything you need.
Can the Volatility Barometer ever get to 0% or 100%?
The VTS Volatility Barometer is a comprehensive volatility index that I created which uses many individual volatility metrics in its calculation. It is normalized to give readings between 0% and 100% depending on overall market volatility.
Can it go to 0% or 100%?
Technically, yes. Realistically, no
Let's take 0% for example which is for extreme low volatility. If all 13 of the individual metrics that are being used right now all themselves reached their lowest level in history on the exact same day, then the overall Volatility Barometer would also reach its lowest level in history and give a reading of 0%.
On the flip side, if volatility was so high that every one of the individual metrics hit their highest possible reading on the same day, then the Volatility Barometer could technically give a reading of 100%.
However, that is highly unlikely. The lowest reading ever was 13.82% and the highest reading ever was 90.55%.
Why does the Volatility Barometer only go back to 2011?
Some of the individual metrics that are being used in the Volatility Barometer only have data going back to 2006. Since the barometer is being normalized on a scale from 0% to 100%, it takes a few years for the readings to be robust enough to be effective. I've chosen to start the useful measurement period on January 1st, 2011. It can go back a little further, but I feel those readings would be less reliable.
Volatility Barometer since January 1st, 2011:
What was the lowest Volatility Barometer reading since inception?
The lowest reading ever was on July 21st, 2017 when the Volatility Barometer hit 13.82%. It's only been below 20% on 5.2% of trading days since inception, and below 15% only happens in the most extreme of low volatility environments. Now 2017 was one of the lowest volatility years on record for the S&P 500 so it's not surprising that the VB low was during that stretch as well. It'll be interesting to see how long we go before seeing another reading below 15%. Given what the economy looks like right now, it could be a while...
Lowest Volatility Barometer reading since inception:
What was the highest Volatility Barometer reading since inception?
The highest reading ever was on March 12th, 2020 when the Volatility Barometer hit 90.95%. It's only been above 80% on 5.6% of trading days since inception, and above 90% is reserved for only the most extreme volatility events. March 2020 definitely qualifies as we saw the VIX index actually surpass the levels it reached in the financial crisis in 2008. So not a surprise that the Volatility Barometer recorded it's highest level during this stretch as well.
Highest Volatility Barometer reading:
What is the VTS Volatility Barometer?
The VTS Volatility Barometer is a comprehensive volatility index that I created which uses many individual volatility metrics in its calculation to give the most robust and accurate measure of overall market volatility. These readings are very useful in timing trade entries and exits.
It's normalized to give readings between 0% and 100% depending on overall market volatility. You can learn more about the Volatility Barometer in this video:
Can leverage be added to the Tactical Balanced strategy?
Although it's not suitable for all investors, there is a leveraged version of the Tactical Balanced strategy, for those investors with higher risk appetite. Please understand though, adding leverage to a strategy will always increase the risk and the expected future drawdowns. If you've weighed the pros and cons and understand how leverage works, then you can check out this video for full details:
How do I rebalance my portfolio to the right allocations?
This will depend on whether your money is in the same account, or spread out among multiple accounts.
If your money is in the same account: In this case you don't need to rebalance because it happens automatically through what we call constant portfolio rebalancing. Because we're actively trading 2-3 times per month on average per strategy, every time you make a new trade, just buy the allocation size that matches the
percentage desired, and it will always be the right position size.
If your money is in multiple accounts: Now you'll have to do some rebalancing and there's two general methods you can choose:
Threshold method is where you rebalance everytime a specific strategy becomes too large or too small based on a chosen threshold. For example, if you intend for VTS Tactical Balanced to be a 20% allocation size, but over time it becomes 25% or 15%, then you could use that 5% difference as the threshold to trigger a rebalance. Or if you want to rebalance less often, you could do a 10% threshold.
Calendar method is where you rebalance based on a set time schedule. So maybe you could choose once every 6 months, or once per 1 year. When that time frame expires, you rebalance your accounts so they have the right amount in each by transferring some funds from one into the other to maintain the desired amount, and you'd also rebalance the strategies so each of them has the desired amount in each.
Please check out this 3 part series on Threshold, Calendar, and Constant portfolio rebalancing:
Can I program any of your Volatility Dashboard Metrics in Ninjatrader, Trader WorkStation, ThinkorSwim, or any other softwares?
Unfortunately, I have no programming ability at all so I won't be able to help you do any coding or design any automated systems.
There was a time a few years ago when I considered taking courses and learning, but I just don't have the bandwidth for that right now. I manage all my VTS strategies and my entire business with basic Excel spreadsheets which is plenty good enough for anything I need in my own work day to day.
Are the signals for the leveraged strategies the same as the unleveraged versions?
Yes, both the standard VTS strategies and leveraged version of each are materially identical as far as signals go. The only difference is the underlying ETPs and the leverage factor used.
- If the
VTS Tactical Balanced strategy is in MDY stocks, the
Leveraged Tactical Balanced will just be using 2x MDY (or MVV) instead.
- If the
VTS VB Threshold strategy is allocated to SPY stocks, the
Leveraged VB Threshold will just use 2x SPY (or SSO) instead.
All the timing signals for both the standard and leveraged versions are identical.
What does the "future roll" mean when you are calculating the Adjusted M1:M2 VIX futures and VX30:VIX roll yield metrics?
Future roll is just a term that makes sense in my head, but semantically you may hear it differently in other places. It just refers to what percentage of the VIX futures are being rolled forward every day with the rebalancing.
So let's say there are 20 trading days in the current cycle just to make the math easy. The constant maturity contract starts with a 100% weighting to the front month M1, and a 0% weighting to the back month M2. Then with each day it will be rolling 5% of its holdings forward with the rebalancing.
100% / 20 trading days = ~5% a day
If there's 19 trading days in the current cycle, then 100% / 19 = 5.26% a day
If there's 24 trading days in the current cycle, then 100% / 24 = 4.17% a day
That number can then be used to help calculate a more accurate representation of contango and roll yield, because it takes into account the weighting of each VIX future based on the number of days to expiration in the current cycle.
Where is the best place I can learn about all these Volatility Metrics that you talk about in your YouTube videos?
I think the two best resources to help you understand the basics of the Volatility market are the following:
1) The VTS Volatility Dashboard Metrics articles that are on the website:
Click the link here
2) I have a "Volatility ETP" playlist on the YouTube channel with many videos that are specific to the fundamentals of the volatility market and the various volatility products:
Click the link here
Do I have to understand all the volatility metrics you talk about in order to follow your work?
Not at all. Please don't be intimidated by all the articles and videos. Those are only optional materials for the purpose of education, but you certainly don't have to follow or understand them in order to participate and follow my Total Portfolio Solution. There's essentially 3 kinds of subscribers at VTS:
1) Follow the trade signals only. Many VTS subscribers just view me as a better alternative to traditional asset management. They get a superior portfolio with much better long term performance, while experiencing much lower drawdowns so their stress level is reduced, and they can follow at just a fraction of the cost. Since I charge a monthly subscription fee rather than a percentage of assets, the more capital a person has the better it scales with respect too fees. If a person is living below their means and consistently saving money and adding it to their investment account, over time the subscription fees reach a point where it's no more expensive than an index fund. But traditional asset management that charges a percent of assets, it's always the same headwind of fees no matter how much money they have.
2) Follow the trade signals, and read/watch the educational material with interest. Beyond following the daily trade signals, some people prefer to try to understand the methodology behind my work which is great. I'm all for that and will do my best to let you peak behind the curtain so to speak. You can watch the YouTube videos, read the articles, and hopefully I will make you a more informed investor. VTS is still about the long term performance and following the daily trade signals, but if you want to learn a little more along the way, I'll do my best to provide that for you.
3) Follow the trade signals, with the intention of becoming a self directed investor. I would imagine it's a smaller portion of the VTS Community, but some of you are probably following my work in hopes that you can learn and understand how I've achieved my success, learn what all the volatility metrics are and how they can be used, so eventually you'll be ready to take the reins yourself and invest your own money. If this is your intention, I'm 100% on board with that as well and I will help you as much as I can.
* All videos, articles, and daily blogs are optional only and you're under no obligation at all to look at any of it. If you'd rather just take a few minutes a day and just follow the trade signals, that's just fine. You can mirror my portfolio and focus on things in your own life :)
Can I get in touch with other VTS Community members?
Out of respect to everybody's privacy, I won't ever divulge a single piece of their personal information. For this reason, no it won't be possible for you to directly speak to any other members.
I realize there's several reasons you'd be asking this and all are fairly benign. Maybe you just want to hear from someone who has had experience with VTS before you make a decision. Perhaps you want to pick the brain of someone specific to the country you live in. Maybe you want to talk to someone who uses the same broker you do. I can think of several reasons why you'd be asking this question.
But privacy has to be respected, so all information on VTS Community members will forever remain private.
The strategy I saw mentioned in a past video / article doesn't seem to be on your website anymore. Where is it?
Due to the fact that markets change over time, it's necessary for me to adapt my portfolio to best match the current market environment and put forward the portfolio allocations that I feel have the highest probability of success. For this reason, the strategies that are officially included in the Total Portfolio Solution will change over time.
- Something that may have been included in the portfolio in the past may no longer be suitable too today's environment. The
Conservative Vol strategy is an example of that. I feel the
VB Threshold strategy covers all the same bases, but is more suitable for the market going forward.
- We also have to be open to introducing new strategies that are better designed to handle a specific market, or perhaps add a level of correlation / diversification that will improve results. The
Defensive Rotation strategy is an example of this, where it adds a level of positive S&P 500 correlation that better handles this cycle of market crashes followed by steep and fast recoveries that we've been in for the last few years.
* This however does not mean we change portfolio allocations often. In fact, I mostly just allow myself a once annual audit of the strategies and the market at the end of the year, and make any changes only once per year at most to see if a better combination might add more value. And, we've gone several years where no changes were made at all so I don't mean to imply we adjust the portfolio often. We don't, in fact it's quite rare.
Does your performance record include trade fees?
Yes, since 2012 I have been adding a 5$ per trade and 0.50$ per option contract commission to the record. However, since the last few years has seen a race to the bottom as far as commissions go, I may at some point reduce that to a more realistic number since in 2020, nobody should be paying 5$ per trade anymore. But yes the official trade record since January 2012 does include trade fees.