Results for Week 1/10: BASON remains hedged & profitable
Results for Week 1/10: BASON remains hedged & profitable
The VIX went down, markets went up. Precision still around 2%.
The competition is open again for week 2/10. Get in, have your say on our 5 indicators and 4 stocks, and keep pushing for that $1000 prize!
Last week our predictions were much more conservative than what the markets ended up with. On Tuesday most of our users saw the market only slightly edging up towards the end of the week. In other words we all saw a continuation of a trend that happened consistently over the past few weeks. The BASON therefore gave very conservative estimates as well.
But the market overshot those estimates, this time by roughly 2% for both the Dow and the S&P. The dip was finally bought, as the VIX went down below 16 for the first time since August. For the past year and a half, whenever there was a correction in the markets volatility traders would chase the VIX down over the next few days, and the result would send the S&P back up. This failed to happen throughout September, but has materialized once again last week. The VIX went down rapidly on Thursday and Friday, and markets shot up.
However, despite not capturing this turn in fortunes (also, we no longer track the VIX), our predictions were still profitable for traders who took advantage.
Last Thursday evening we told you what we were buying.
“…we bought SPY $428 calls with 15/10 expiry date (using the lower boundary of the C.I. for the strike price), and we used an iron condor for the SPY 15/10 431/432 to 440/441 (so a slightly narrow margin).
Our call is likely to give us around $600 profit, and our iron condor gave us $400 when we sold it, so if it expires outside our C.I.s, we stand to lose in total $600. So if SPY ends up above 441, we will be at $0 for this week. Hedged!”
How did we do? Actually even better than anticipated. We made an $824 profit (70% return) with the SPY 428 calls, and lost $600 on the iron condor. Hedged indeed! :)
Those who used the same strategies made money, so congrats to them! It would have been even better had the BASON delivered greater precision, but even when this precision drops from <1% to 2%, money can still be made.
NOTE: Remember, by participating in the competition and leaving your email in the user profile, you get our predictions before everyone else (on Wednesday morning). Leaving your email is the only way for us to contact you. If you want it, ofc.
Weekly performance
Now for the actual predictions. Published last Thursday based on our Tuesday users, we got the following:
As usual, BASON’s precision was lower than the weekly volatility of each indicator and stock. And by some margin. However in each case the BASON underestimated the final value of an indicator or stock. The 10-year T-bill and the oil prices were within good margins, as was the AAPL stock, but the Dow and the S&P broke the 2% precision window. The most volatile assets, BTC, GME, TSLA, and AMC all had higher errors (5% to 10%), which is a bit too much, but this is exactly what we had at the start of our survey initially. After a while these volatility-induced errors corrected, and we expect them to do the same over time in this competition.
This week, the new leaderboard will be up and running, where you will be able to track your weekly performance compared to the rest of the crowd. So jump in before it’s too late, and beat everyone else!
DISCLAIMER: This prediction survey is still in its testing phase. Neither the survey nor its results act as investment advice of any kind, nor should they be considered as such. The results of the survey need not correspond to actual market preferences or trends, so they should be interpreted with caution. Oraclum bears no responsibility for your investment choices based on these predictions.
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