Introducing the Weekly Income Strategy from Capital 19

Generate consistent weekly returns by selling weekly option spreads on e-Mini S&P
500 futures

Capital 19 Global Investment

  • Bought to you experienced, Sydney based, investment advisers, Capital 19
  • Traded by proprietary traders on behalf of dozens of existing clients
  • Superior, proven trading results over four years

Average monthly return of 1.4% and +90% winning months since inception in 2012

  • Equivalent to 18% annual return
  • Maximum drawdown of 2.54%
  • Longest trough to peak duration is 2 only months
  • Excellent risk/reward characteristics make the Weekly Income Strategy a natural compliment to traditional equity investments

Capital 19 has been advising Australian investors on US investment strategy since 2007

  • User friendly and feature rich trading platform gives you better trade execution
  • Low commission structure means your investment works harder for you
  • There are no addition fees required to participate in the Weekly Income Strategy
  • Minimum starting for Weekly Income Strategy is only $10,000
  • Start with one contract and scale as your account size grows

The Weekly Income Strategy leverages several sources of trading edge to provide superior trading results

  • Selling expensive options provides a significant trading edge which compounds quickly when consistently replicated
  • Selling far-out-of-the-money put option credit spreads with a very high 95% plus chance of profit
  • Selling weekly expiring options provides rapid time decay with almost immediate profits accruing to the investor
  • Weekly options premium increases with market volatility providing a natural hedge against market volatility
  • A single position is continuously monitored by systems and traders to provide you with peace of mind
  • The e-Mini S&P 500 futures options are one of the most liquid contracts available with extended hours trading ensuring low trading costs and excellent execution

Weekly Income Strategy Monthly Return

For more information on the Weekly Income Strategy download the Weekly Income Strategy Portfolio Analysis report and contact the representatives at Capital 19.

To request more information about the Capital 19 Weekly Income Strategy, simply fill in the form below and a representative will be in touch shortly.

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Weekly Income Strategy Trade Log

Strategy, Trade Selections & Commentary by Luke Neal & Greg Rynehart of

    Capital 19

24th February 2017 - Consecutive Winning Trades 60

We closed our position last night for profits of US$32.50 per contract.

It’s been a pretty uneventful week since we placed our last trade. Markets were closed on Monday for the Presidents Day bank holiday, and since Tuesday the S&P 500 has moved just slightly higher.

We will aim to get into the new trade as soon as possible tonight to take advantage of time value.

New Trade Details:

Market 2363
Expiry March 3rd
Sold Put Strike 2275
Bought Put Strike 2145
Pts below 88
% below 3.8%

17th February 2017 - Consecutive Winning Trades 59

Markets have been surprisingly strong this week, notching up a 7 session winning streak. This consistent buying reduces volatility and makes it hard for us to generate decent premium when selling options.

Today we will be closing out our position in the Feb 17th expiry puts for a gain of US$25 per contract. A little lower than usual due to the reduced volatility.

But the good news is volatility has increased in the last two sessions so we are going into tonight hoping for a better outcome on our next trade.
New Trade Details

Market 2343
Expiry February 24th
Sold Put Strike 2250
Bought Put Strike 2120
Pts below 93
% below 4.0%

10th February 2017 - Consecutive Winning Trades 58

Today we will be locking in our 58th consecutive winning trade. This time for a profit of US$30 per contract.

The Trump rally continues in stocks and last night they notched up yet another record high. The S&P500 is now over 2300.

There were a few quotes from Confucius floating around the office the other day and we realised he must have been an option trader. For example

“A man who moves a mountain begins by carrying away small stones”

This is exactly what we do here. Even though our weekly profits are small, by the end of the year, we have created a mountain.

He also said:

“Our greatest glory is not in never falling, but in rising every time we fall”

Whilst it has been over a year since our last loss, we will have one again at some point in the future. But we have a process to deal with it. We have had falls in the past and we have risen to new highs after them every single time. I see no reason why next time should be any different.

We will do our best to get you the best combination of low risk and high return strikes we can each trade. It is hard in this low volatility environment. But not impossible.
New Trade Details

Market 2304
Expiry February 17th
Sold Put Strike 2225
Bought Put Strike 2095
Pts below 79
% below 3.4%

3th February 2017 - Consecutive Winning Trades 57

We started to get excited on Monday and Tuesday when we saw some selling but it did not last. At least we have seen volatility move off its lows for now.

As I write this we are not yet out of our current position but we will be soon. This will bank another profit, our 56th in a row. This time it will be US$32.50

The market has now completed 79 days without a 1% down day. That is the longest streak since 2006 and the fifth longest in history. Surely this cannot continue much longer.

Next week does look quite good at this point. Our trade tonight will look like this. As always, please confirm if you want us to place it for you.

New Trade Details:

Market 2275
Expiry February 10th
Sold Put Strike 2175
Bought Put Strike 2045
Pts below 100
% below 4.6%

25th January 2017 - Consecutive Winning Trades 55

We are not yet out of our trade in the Jan 27th expiry puts, but the way the market has moved this week, and with more than 100 points buffer, we probably will be tomorrow. That will result in profits of $30.00.

Then, while everyone is recovering from excess sausages and beer, we will get into a new trade on Thursday night to maximise our time advantage.

We have noticed that Thursdays seem to offer much better pricing than Fridays. We don’t know why this is, just that it is. We have also noticed that option pricing is changing and the premium for our bought puts is going up and up. Which is slightly annoying

There are a couple of things we can do about this and if it becomes a real problem we will adjust the strategy in future. For now, we will proceed as normal.

This new trade will likely occur on Thursday, however, if the market has a big fall, we won’t enter until Friday. It should look something like this:

New Trade Details:

Market 2275
Expiry February 3rd
Sold Put Strike 2185
Bought Put Strike 2055
Pts below 90
% below 4.0%

20th January 2017 - Consecutive Winning Trades 54

We were quick enough to make a move on Wednesday night and got about 1/3 of our contracts filled. We will close out tonight for profits of US$25.00 per contract

Options prices are looking much healthier for next week. The selling we’ve seen over the last two sessions has led to the VIX moving up 8.9% to 13.04

Let’s hope we get even more selling heading into tonight’s session.

New Trade Details

Market 2257
Expiry January 27th
Sold Put Strike 2150
Bought Put Strike 2020
Pts below 94

14th January 2017

Apologies to everyone for we were unable to find a trade last night that satisfied our risk/reward characteristics.

We have therefore not entered a new position in the Jan 20th expiry puts.

This is unprecedented in the four and a half years we have been trading this strategy. Never before have we been unable to place a trade. But volatility has never been this low before either.

We do not think the market is presently offering us just reward for risking our capital.

There are options available we could have sold, but that would have placed us too close to the market, which we deem too risky. The market will probably rise further now and next week we could look back and say “see, it would have been fine”. But we like to play with the deck stacked in our favour and right now it isn’t.

We could also look at trading a longer dated option but we don’t like to do that either as a key part of this strategy is keeping the time in market as short as possible.

The secret to trading options is knowing when not to trade. Sometimes it just isn’t worth it.

For now we will sit back and wait to see what unfolds. Things will look different next week.

5th January 2017 - Consecutive Winning Trades 53

US Stock markets have been very positive so far in 2017. Which is slightly disappointing.

We saw some selling last week and started to get excited. Volatility was building and we thought we could be in for a nice period of increased profits.

But that has changed this week and stocks are making new highs and volatility is falling once more.

We will go back to hoping and praying for some nice volatility.

Still, it does mean we get to kick off the new year with a win. We will be locking in profits of US$30.00 during the course of today or tonight and then placing the following new trade for next week’s expiry.

New Trade Details

Market 2264
Expiry January 13th
Sold Put Strike 2180
Bought Put Strike 2050
Pts below 84
% below 3.7%

29th December 2016 - Consecutive Winning Trades 52

We will take profits on our current open position tonight and lock in US$27.50 per contract.

This will mark the last closed trade for 2016 and bring our current run of winning trades to 52.

We have been lucky this week and seen a slight tick up in volatility. It is still very low and so we are still very cautious in our approach to strike selection.

We will open a trade today that will expire on January 6th 2017 and mark the start of a new year of trading.

New Trade Details

Market 2246
Expiry January 6th
Sold Put Strike 2160
Bought Put Strike 2030
Pts below 86
% below 3.8%

22th December 2016 - Consecutive Winning Trades 51

The US market has just closed and saw some selling right at the end which delayed us from locking in our profits this morning. However, as another few hours of time erode today and premiums decrease, we will lock them in tonight for US$32.50 per contract.

Next week the US will be closed on Monday for Christmas holiday, but unlike us who take 2 days, they will be back at it again on Tuesday.

The shortened week means less days in the trade, hence less risk. The offset is lower premium, but as there is a direct linear relationship between risk and reward with options it all balances out.

New Trade Details
Market 2261
Expiry December 30th
Sold Put Strike 2190
Bought Put Strike 2060
Pts below 71
% below 3.1%

15th December 2016 - Consecutive Winning Trades 50

Right now we have not yet closed our current open position. Our strike is all the way down at 2155 and the market is trading at 2252 so we have a massive 97 point buffer with only one trading session to go.

The result with such a massive gap is almost inevitable. At some point tonight we will be closing out for a profit of US$35 per contract.

We would like to be in a position to immediately re-enter the market, hence the email today, even though we are not quite out yet.

The Fed last night increased interest rates as expected. They are now at 0.50%-0.75% (the US quote a tight range rather than an exact figure). The last time they did this was exactly 12 months ago in December 2015.

In her statement, Yellen described a growing economy, low unemployment and positive consumer sentiment. The Fed thinks inflation will head towards their 2% target over the next two years and a neutral monetary position would be around 1.4%. They think they are likely to increase rates 3 times in 2017. But then she stressed they are not on a plan and will adjust to economic conditions as they prevail.

The stock market did not like this and sold down 18 points, which is exactly what we wanted. With any luck this selling will continue tonight and we can get a great trade away in the lead up to Christmas. Presently the new trade would look better than last week and we would like to get some new put spreads sold while traders are still emotional and before they calm down and reassess.

New Trade Details
Market 2252
Expiry December 23rd
Sold Put Strike 2140
Bought Put Strike 2010
Pts below 112
% below 4.9%

9th December 2016 - Consecutive Winning Trades 49

The US stock market has shown good strength this week and made a big move higher today. This has taken all the value out of our current puts and we are presently sitting here and hitting the offers when the market makers put them up for us.

By the time you read this, we will be out of our position in the December 9th puts for a profit of US27.50 per contract.

Next week is a special week that only occurs 4 times a year.

Presently we are trading the underlying December futures contract. That expires next Friday, the 16th, when the US market closes.

Because the underlying is expiring on the same day as the options, option expiry is moved to the Friday morning. This effectively means one less trading session for our puts.

Less trading sessions means less premium but also less risk.

We want to get into our new position in the December 16th expiry puts tonight because of this.

The new trade will look something like this:

New Trade Details
Market 2237
Expiry December 16th
Sold Put Strike 2145
Bought Put Strike 2015
Pts below 92
% below 4.1%

2nd December 2016 - Consecutive Winning Trades 48

We are not quite out of our current sold puts yet, but we will be by tonight.

The market has fallen in the last couple of sessions which has held value in our puts a little longer than usual.

It would actually be good if we had a massive crash tonight, but I very much doubt we will get that lucky.

When it closes later today we will lock in US$25.00 per contract. The low volatility recently is lowering our profits. But the good news is there is a bit more vol around this coming week so we should get a better trade on tonight. More selling would help.

New Trade Details
Market 2193
Expiry December 9th
Sold Put Strike 2070
Bought Put Strike 1940
Pts below 123
% below 5.6%

25th November 2016 - Consecutive Winning Trades 47

This very shortened week has seen markets push to new all time highs. Who would have thought Donald would win the presidency and markets would react by hitting new highs?

This is why it is pointless trying to predict markets and why we love to keep things simple and just sell put options spreads instead.

The market was closed last night for Thanksgiving and will re-open at 10am Sydney time this morning. When that happens we will lock in our 47th consecutive winning trade. A little less than normal at US$25 per contract. Option premiums adjust to the shorter week. It’s a concept of “profit per day” – with less days comes less profit. But it all goes into the pot and we are on track to a 20% year. Touch wood.

We are probably going to have a long night of trading ahead of us. The markets will close at 1pm New York time so it is only a half day and very few people will be trading as they are recovering from turkey overload. That will mean thinner markets and a lot of effort to place our orders. Still, the good thing is we will be able to sleep at 5am due to the early close.

New Trade Details

Market 2206
Expiry December 2nd
Sold Put Strike 2125
Bought Put Strike 1995
Pts below 81
% below 3.7%

18th November 2016 - Consecutive Winning Trades 46

After the excitement of the last two weeks, everything has died down and we are back to boring.

At this moment, we are trying to close our open trade. That might not happen until later today when Europe comes in, but it will occur and we will be locking in US$37.50 per contract.

Next Thursday is Thanksgiving and the market is closed. The day after, Friday, expiry day, the market is open for only half the day. Usually absolutely nothing happens as businesses run on skeleton staff so everyone can have a four day Thanksgiving weekend.

What that means is we really only have 3 sessions next week.

With options volatility drying up once more and a shortened week, we want to get out of our present trade and into our next one today, before it is too late.

New Trade Details

Market 2172
Expiry November 25th
Sold Put Strike 2100
Bought Put Strike 1970
Pts below 72
% below 3.3%

11th November 2016 - Consecutive Winning Trades 45

Profits taken of US$42.50 per contract.
What a week this has been! In what was very possibly the most divisive and ugly election in US history, Donald has pulled off the most unlikely of wins.
In short, things could not have gone better for us.
You might have seen headlines yesterday about markets ‘plunging’, ‘taking’ and other sensational sounding and worrying phrases.
What happened was the markets expected a Clinton victory and initially rallied but then when Trump took over the lead it led to a round of knee jerk selling. When it was at the height of uncertainty the S&P500 fell just over 100 points, triggering the circuit breakers and trading ceased.
(these circuit breakers kick in at a 5% fall and are one of the protection factors for our strategy. The best bit is we don’t have to do anything for it, the exchange does it for us)
When trading re-opened it was apparent Donald had won and although this does worry markets (more on that below) it isn’t anywhere as near as bad as an unknown outcome.
At no point during any of this did we even have the slightest concern. We are sitting on the 1870 strike so even at its worst, we were still 158 points away from any trouble.
When the markets opened last night all that selling was bought back and the S&P actually finished up 27 points!
But this one week of market action isn’t the best bit. The best bit is what a Trump presidency means for markets and that is, no-one knows. Which should lead to a lot of uncertainty in coming months and we thrive in these conditions.
I heard a Fast Money trader speak yesterday afternoon. I respect Guy Adami very much and he said that markets have lived on Fed Policy for years. That has led to our extreme low levels of volatility as everyone knows the Fed will act if things get bad. However, Trump’s statements pre-election sound as if his presidency will not like the Fed dabbling in markets. Guy is worried that a Trump presidency deny the Fed their market calming actions.
I sincerely hope he is correct.
It would be wonderful if we saw a state of turmoil and a nice increase in volatility. That is perfect for our weekly income strategy.
Hillary was going to give us more of the same. That will probably not happen with Donald. Hopefully Donald will shake things up and upset a lot of people. Markets won’t like it and volatility will increase.
So, no matter what you might think about Donald, for us making money with our Weekly Income Strategy, the future is looking very bright indeed.
Thank you America for voting in Donald and sending us your money every single week. We will happily continue to take it from you as often as we can.

New Trade Details:
Market 2160
Expiry November 18th
Sold Put Strike 2010
Bought Put Strike 1880
Pts below 150
% below 6.9%

4th November 2016 - Consecutive Winning Trades 44

We are not out of position yet but we should be out sometime today locking in a profit of $37.50 USD per contract.
It’s been a really interesting week this week with the S&P500 falling every day. It’s been the longest losing streak since 2008.
Even though the markets have closed lower every day, the moves have been slow and gradual and we are still more than 60 points away from our strike price with only one session to go.
Hillary still looks to be winning the US election race, however Trump has managed to inch closer and make the race a bit tighter. It’s certainly not as one sided as it looked last week.
The changes in the election and market movement down have caused an increase in options volatility, which as you know, we love.
The increase in vol will push us a long, long way away this week.

New Trade Details:
Market 2085
Expiry November 11th
Sold Put Strike 1890
Bought Put Strike 1760
Pts below 195
% below 9.4%

28th October 2016 - Consecutive Winning Trades 43

This past week has been the slowest I can remember this year. The market has hardly moved at all, but that hasn’t stopped us banking yet another profit. This time for $35.00 USD
On Monday the market put in a small rally which was then subsequently eroded over the next 3 days. When I wrote this email last week the market was at 2136. Today it is at 2128.
The entire trading range for the week was only 2122-2148 which is only a 1% move from absolute top to bottom.
About the only thing on the horizon that can give us any joy will be the election the following week. Even that is looking like it will be a non-event too.
We’ll just keep plugging away and make what the market gives us. We won’t change our strategy. We’ll keep safety of capital as priority and accept however much profit the market wants to part with.
New Trade Details:
Market 2128
Expiry November 4th
Sold Put Strike 2040
Bought Put Strike 1905
Pts below 88
% below 4.1%

21th October 2016 - Consecutive Winning Trades 42

We are not completely out of our position yet but with any luck the remaining contracts will be closed later today locking in a profit of $37.50 USD per contract.
Back to boring…The market is in exactly the same position as last week and it appears we’re in for much of the same again next week. In terms of economic data next week there is very little to watch out for.
The US markets appear to be in a holding pattern as investors wait to see what the Fed will do and how much Hilary will win by. Its widely expected that the Fed wants more time and they don’t want to be seen as interfering with the election so rates will remain on hold until potentially December.
As an investor in this strategy I would say a rate rise would lead to a positive outcome for us as the USD should strengthen and it should also create some volatility. But if they don’t raise we could see the AUD heading towards the $0.80 level for the first time in 18 months.
All that aside, lets look at this weeks’ trade.
New Trade Details:
Market 2135
Expiry October 28
Sold Put Strike 2060
Bought Put Strike 1930
Pts below 75
% below 3.51%

14th October 2016 - Consecutive Winning Trades 41

We are presently working our way through the take profit orders on the October 14th expiry puts which will result in a profit of US$37.50 per contract.
We’ve had a good week in the markets with some selling coming through so volatility is on the rise and that leads to a better trade opportunity this week.
New Trade Details:
Market 2126
Expiry October 21
Sold Put Strike 2025
Bought Put Strike 1895
Pts below 101
% below 5.0%

7th October 2016- Consecutive Winning Trades 40

Profits taken this morning of US$35.00 per contract
We have a relatively quiet week ahead.September jobs numbers will be released tonight and are expected to remain strong, supporting a rate hike later this year. For a long time now good news has been good and bad news has been bad. Strong data earlier in the week has finally been good for the market which is a healthy sign that investors just might be warming up to the idea of a rising interest rate environment.
Sunday night we have the second Presidential debate followed by a bank holiday on Monday in observance of Columbus Day. Next week also marks the start of earnings season with Alcoa kicking off on Tuesday.
The nice thing is, all of the uncertainty surrounding these events is already priced in to weekly options, and we can take advantage of that.
So let’s turn our attention to tonight’s trade

New Trade Details:
Market 2155
Expiry October 14
Sold Put Strike 2070
Bought Put Strike 1840
Pts below 85% below 4.0%

30th Sept 2016 – Consecutive Winning Trades 39

We are not quite out of last week’s trade just yet with the market closing 14 points lower last night. We still have a good 50 points up our sleeve though so it’s only a matter of time before we’ll be out, locking in profits of US$30 per contract.

We are set up nicely now for entry into the new trade tonight, and hopefully we’ll see even more selling prior to getting our trade in. Selling before we place a new trade usually means higher profits and less risk because we can get a lot further away.

Here’s the trade we are targeting tonight.

New Trade Details:

Market 2143
Expiry October 7
Sold Put Strike 2030
Bought Put Strike 1900
Pts below 113
% below 5.3%

To request more information about the Capital 19 Weekly Income Strategy, simply fill in the form below and a representative will be in touch shortly.

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