Introduction

Hi! My name is Ian. You haven’t heard from me in a while. Why is that?

Well, shortly after covid happened in the US, I switched jobs, and then got really into trading derivatives and options. In 2021 it was very successful, in 2022 it was the opposite, in 2023 I refined it and made a strategy. Tack on another couple job changes within the industry, and there wasn’t enough time or willingness, in all honesty, to sit and write about economics. Which is really unfortunate on my part, as the past few years were quite consequential, with many home repairs and jockeying with credit card debt have left me not able to invest much until very recently. Coming out of the debt tunnel and back into the light, has led me to prioritize working toward the next phase of my investing and professional career. And as the next chapter of my journey commences, I am excited to share regular updates from my hedge fund, I-Dog Capital.

You may know me as the Millennial Economist, so you might be asking yourself, what is he doing talking about hedge funds and day trading? Well here’s a little about my investing style, to start. I am a mostly conservative young investor, and I try to take small, calculated risks to make predictable, but growing, gains. I prioritize income return over straight capital gains, within reason. I guess you can call me old-fashioned, but that’s what you get when your introduction to investing was reading The Intelligent Investor. That’s mostly come through dividend growth investing.. Since 2020, though, I’ve skewed more into the options trading, and more recently, embracing the idea of capturing yield, but not chasing it. In fact, my personal investing Rule #1: Take profits, don’t chase profits. I trade the Wheel, sell Covered Calls/Puts, Vertical Spreads, and the occasional Condor or Straddle, but stay away from the riskier multi-leg trades. And I almost always sell options, and hardly, if ever, buy them.

But more to the point, I took this step because I wanted to get into writing again, and writing with a consistent schedule, and related to something I enjoy. I will still be writing about economics, and taxes, and politics, and central banks, and all that good stuff, in fact, this monthly schedule will incentivize me to write even more. And just as important, I truly do believe that most people in this country have unrealistic expectations of what the world of high finance and day trading is like. And I admittedly am among them. But I want us to get there together. I am not taking partners, I don’t ever really plan on that, but I suppose if you asked nicely enough… a discussion for some decades down the road. But you’ll see how much, or how little, work happens, and how it all works. I’m very excited to grow the fund.

I created I-Dog Capital in 2022, back when I was riding high, and thought I had what it took to strike it out on my own. I quickly realized I was not there yet. As such, I’ve had to change plans, and I-Dog Capital will be starting more or less from scratch. I initially deposited a small seed amount of $2,000. Now, for the first time in a long time, I am in the position to contribute and grow the fund. My intention is for this fund to be transparent, informative, and a way for people who otherwise have no understanding of hedge funds to get a taste for what the space is like! As most hedge funds are proprietary and hidden away, I-Dog Capital will be a public fund, with these updates showing trades and positions, free for everyone to see.

My Positions

Since its inception in 2022, I-Dog Capital has traded almost exclusively on the S&P 500. Due to capital constraints, the fund would sell put options on SPLG, the smaller S&P 500 index fund, with expiry in 30 days or more. My preference is to sell options that expire in 7 days or less, but SPLG, due to not being as liquid, did not have a large enough options chain, so monthly contracts have been the norm.

The fund’s current holdings are as follows:
– ($2.50) in -1 SPLG March 15 56 Put
– $1,858.76 in cash reserves
The fund’s total value is $1,856.26.

My Performance

The fund’s performance in February was 2.06%. The fund’s performance Year-To-Date is 2.56%. Since inception, the fund has returned -14.4%.

My Trades

The fund executed one trade in February. There was no February SPLG Put to roll forward, so the fund sold one March 15 56 Put for $40. This means the fund sold a contract giving the buyer the right to sell the fund 100 shares of SPLG, at $56, by March 15. For that privilege, the fund was paid $40.
SPLG currently trades at $59.65, so our put option has lost much of its value, and currently trades at $2.50, for a $37.50 unrealized gain.

As the contract we sold short carries a notional value of $5,600, we are almost fully utilizing our account’s 2x margin, with a maintenance excess of $1,037.

The Fund’s February P/L was $37.50.

Insights

This is the area in the monthly newsletter that I will periodically expound upon various topics, including things I see in economics, relating to the fund, or other issues or things I want to talk about. Any questions I receive from readers will also be answered in this section. Who knows, they may turn into their own musings? This first issue touched on quite a few topics, so if you’d like to ask about anything you’ve read, from trading & investing, to my personal financial history, to whatever your heart desires, please feel free to ask away!

Conclusion

As you can see, the fund is starting out quite small, but as we expand, the trades will get more interesting. I think the first “Insight” will be explaining my trading style a bit. I hope you stick around and see just how big I-Dog Capital can become!

Categories: I-Dog Capital, Uncategorized