47.57 -0.36 (-0.75%) Sell

AMTD is a falling knife, continues to bleed every investor trying to catch it

13 min read

TD AMERITRADE HOLDING CORP significantly underperformed today. It lost -0.75% to close at 47.57. During the last week it lost -2.52% and saw a maximum drawdown of -4.41% before bouncing back.

[Themes containing AMTD]

Buy-and-Hold investors in AMTD experienced a maximum drawdown of -15.3% over the last three months. It lost -15.3% during this strong down trending period. There were both Long and Short signals during this period, where the short signals were significantly more profitable than the long signals. The net profit from Short signals was +10.36%.


AMTD has been underperforming the SP500 index in recent time, after having outperformed till 20 Apr, 2018. Over the last 2 years 11 months and 14 days, AMTD outperformed the SP500 index on 52% days.

During the last three months AMTD was mostly loss making and delivered on average -0.25% per day. It's best return during this period (of +2.84%) was on Monday, 26 Nov, 2018. While it's worst loss in the same period (of -5.45%) was on Tuesday, 4 Dec, 2018. There was initially a bearish trend during this period which started on 26 Sep, 2018 and went on till 2 Oct, 2018. The trend delivered -5.51% losses to investors. This was followed by a bullish trend that started on 29 Oct, 2018 and ended on 1 Nov, 2018. This bullish trend delivered +3.81% to investors.

AMTD had 8 profitable and 4 loss making months over the last year. During the last year, number of profitable months of AMTD and SP500 index were the same. AMTD was also a more risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -11.6% compared to -7.75% returned by SP500 index in Dec 2018. AMTD had a shorter streak of profitable months than SP500 index. It only went up in 5 straight months during the last year.

Fortune sides with him who dares.
-- Virgil

AMTD is becoming more volatile overall. In comparison, the SP500 index is seeing a rise in volatility. During the last three months, there was a significant surge in AMTD's volatility from 19 Sep, 2018 to 24 Oct, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that AMTD has significant positive skewness in it's return distribution. This indicates that investors can expect AMTD to recover from drawdowns quickly. Which makes AMTD a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in AMTD derivatives at this moment can consider 'Bear Put Spread' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than AMTD. Therefore, SP500 must receive a lower allocation than AMTD in your portfolio. SP500 index usually has shorter drawdown period than AMTD.

On a general note (since you are interested in AMTD), two instruments that deserve special mention are ECYT and NFEC. They have significantly outperformed the overall market this year.

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