ITPM Flash is a video series from the Institute of Trading and Portfolio Management (ITPM), founded by Anton Kreil, that provides market insights from the Institute’s senior trading mentors.

Disclaimer

This blog post is for informational purpose only and no investment advice. Always do your own research! Read the disclaimer here >>>

ITPM Flash Ep45 – Summary

In this episode senior trading mentor Anthony Iser demonstrates one more time why he is the god of trade idea generation. In this episode the focuses on the US housing market.

The Macro Background

Macro economic indicators are down 14% top to trough which usually indicates a recession a head.

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ITPM Flash Youtube

Unemployment rate has ticked up recently which indicates weaker markets a head.

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ITPM Flash Youtube

The Sahm-rule says: when the labor market weakens, it tends to snowball which indicates weaker markets a head.

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ITPM Flash Youtube

Lumber prices have come down ober the last 2-3 month which indicates weaker economic conditions. Around 70-80% of US lumber demand come from US housing. This area could be a good one to look out for a possible trade idea generation.

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ITPM Flash Youtube

US Construction Sector

There is a shift in the US construction sector on it’s way. Existing home sales are ticking up and will be back in growth territory soon. This means, that more and more existing homes are coming to the market which will probably hurt construction companies. More Supply on the market means less demand for new constructions and reducing profitability of construction companies.

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ITPM Flash Youtube

ITPM Flash Ep45 – Conclusion (Trade Idea Generation)

Anthony Iser talks about shorting KBH (KB Homes) which is a US construction company. There are a big companies like TOL but they have a lot of cash buyers (so upper class). Smaller housing companies have illiquid options chains which make them hard to trade.

If you look at company metrics their profitability is declining which is good for Anthony’s thesis. He talks about initiating his trades with a classic options calendar spread.

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ITPM Flash Youtube

The options trade below is the one Anthony Iser said he put on (this is no financial advice). He buys 3X Jan 70 puts and sells 2X 70 Aug puts which is a 3:2 ratio calendar spread. His best scenario would be that the price stays above 70 in August so his short leg expires worthless. Afterwards the price needs to go down. He could sell another short leg in between August and January to raise additional credits a long the way.

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ITPM Flash Youtube

Risks of the Trade

If rates come down in the near future people could be stepping back into the housing market. There is a lot of demand waiting on the sideline. Anthony tries to mitigate this risk by going out longer than usual (until January) which is way longer than the usual 20-60 day time horizon. Another potential risk that balance sheets are quite strong. Companies won’t get into trouble that easy.

About me

The Institute of Trading and Portfolio Management (ITPM), founded by ex-Goldman Sachs trader Anton Kreil, helped me on my journey to become a profitable retail trader

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Review of ITPM Courses

The courses of the Institute of Trading and Portfolio Management helped me massively to become a profitable retail trader. I genuinely believe that ITPM provides the best trading education on the market – but not everything is perfect. Find out more in my reviews

Results of my Mentoring with Anton Kreil

In September 2022 Anton Kreil asked me and another one of his former mentees, if we want to do a webinar with him. After the Thailand class in April 2022 and the following mentoring with Anton from Mai to July 2022 I thought it was great opportunity to show what I have learned and how I have progressed

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ITPM Thailand Mentoring

After completing my first ITPM Course, the PTM 1.0 (the predecessor of the PTM 2.0), I knew I want to do a mentoring. After a thorough analysis I decided to attended the April 2022 Thailand mentoring class

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