Howard Trading wishes you peace and happiness during this holiday season. May the upcoming year be full of opportunities and achievements that will bring you to greater heights. Happy New Year!

As Christmas draws near, we at Howard Trading wish you and your families a Merry Christmas! We hope your holidays will be filled with joy and laughter through the New Year.

It is with the deepest sadness and respect we acknowledge the passing of her Majesty, Queen Elizabeth II. For the people of Great Britain, the Commonwealth and many others around the world her departure is a tremendous loss. Her Majesty was a role model for us all about the dedication to family, duty and service. May god bless her and keep her. God save the King.

These are critical functions that anyone operating in a financial institution expects to be undertaken and completed to a high standard. They are the bedrock, along with counterparty credit and collateral risk quality, of any asset backed or collateralised lending business.

Done well, they add certainty to the risk management and trading process, done poorly they can and will cripple a business.

Crypto platforms are more and more illustrating they have been moving way too fast without a clear view on the fundamental risks within the business. We are believer’s in the technology, there is a place for it, however the guardrails just are not yet in place fully and need to be. Here is a great example of how it can, and does, go wrong from time to time.

Crypto.com accidentally transfered $10.5M to client instead of $100 refund

If you want to discuss how we can help your organisation put those guard rails in place, enhance your risk management capabilities and reduce your operation risks, then reach out.

We are pleased to announce our Private Company First Quarter Trading Results.

Our business generated a 47.04% return for the quarter on our capital base, comprised of monthly returns in Jan (-0.35%), Feb (+13.26%) and Mar (+34.13%).

We started the year with a cross-asset net long volatility exposure. Our portfolio was positioned around Gold, US Shale Pipeline Equities and US Interest Rates. Despite the market making new highs in January, we had concerns with the continued melt-up in equities, as we were reaching and exceeding key valuation metrics, while volatility measures in these asset classes registered near all-time lows.

Our presence in Hong Kong allowed us to witness at first hand the depth, breadth and seriousness of this pandemic as it unfolded in real-time. As the financial impact of the COVID-19 pandemic became apparent in early February we expanded our portfolio risk to incorporate S&P500, Nasdaq and Russell2000 and GBP/USD volatility structures.

The coming quarter should be viewed with trepidation. The world faces the competing forces of looser Monetary Policy, combined with a Fiscal Stimulus, which seek to address GDP declines in the economy, while the health crisis continues to manifest itself. Derivative markets already point to a major re-pricing of forward earnings and dividend distributions.

We’d like to thank our trading execution partners from Interactive Brokers and Saxo Bank. Thanks to Chatham House, Geopolitical Futures and Stratfor for their unique perspectives.

Re-affirming our social commitment we expanded our 2020 donation programme to include Feeding Hong Kong, Operation Mask Lift and Hong Kong’s Save The Children Coronavirus Relief Fund. Finally, our thoughts are with the individuals and communities, including all the healthcare and essential workers, who have and are impacted by the COVID-19 pandemic.

We recently moved our business activity to a “Work From Home” model. We have a couple suggestions for how to make the transition easier and some tools that can help support your business.

For us defining a routine had the most significant impact, the who/what/when of the household meant that – save for the odd intrusion – we could find time to do some of what we needed to achieve. And yes, ear plugs do make a difference.

Ensuring clear and open lines of communication across the team is paramount. Slack is a great messaging tool to deploy and can be defined around functional themes or projects so the discussion can be shaped around a topic and not “getting people up-to speed”.

Real time communication is important and a regular daily call (or two calls) help maintain openness and transparency across the business. Google Duo has been excellent for group video calls of up-to 8 people. Noise cancelling headphones work a treat.

Information sharing can be made easier with Dropbox, the Fremium version is good as a starter, while the Dropbox Professional package is $25 per month, you can cancel anytime and provides you with sufficient storage and user access to manage how you transfer data across a small team when email files just won’t work.

In our case our Brokers, Data Providers, Research Providers, Business Service Providers and Vendors are all struggling with the same challenges so maybe take the time upfront to connect with them and ask them how you can streamline access, communication and the business activity upfront rather than when you have an issue.

Finally, look to use some alternative resources to help support your business. We’ve worked with a company of virtual assistants to support specific aspects of our business. If you choose to then consider what you want to deploy to your virtual assistant(s). Aim to be specific, make any objectives sufficiently detailed, documented and provided clear guidance on how to escalate issues.

Hope this helps.

With the current concerns surrounding the CoronaVirus global equity, fixed income, credit and commodity markets the question we have is how rapidly are markets re-pricing risk assets and will this be another opportunity to sell volatility?

In a two-part commentary, we will review the VIX Listed Options Market and the CBOE’s Put and Call Index.

So to the VIX Options. Taking a snapshot view of the VIX futures pricing over the last few days shows a sharp move in the front end of the curve supported by a parallel move up, with the curve now in backwardation we’d expect to see significant pressure on the front end in the coming days.

Our proprietary heat map of listed VIX Options shows there are significant concentrations are in the one-month maturity. Upside risk has pronounced concentrations at the 24 and 25 strike calls while it is the 13, 14 and 15 strike puts that appear to anchor the downside normalisation.

We hope you find this helpful.

The New Lunar Year is here bringing in new opportunities and challenges for all of us. Sending you our warmest wishes of prosperity and success this year of the Metal Rat. From all of us at Howard Trading, Kung Hei Fat Choi!

Thanks to the team at the Visual Capitalist who prepared an excellent graphic on 2019’s Asset Class Performance, it was a Bull Market in EVERYTHING.

We hope you find this interesting.

Read the full report here: How Every Asset Class, Currency & Sector Performed in 2019

With the start of a new decade, may you reach greater success and happiness than the last decade. We wish you a Happy New Year from all of us at Howard Trading Limited!