17.22 -0.73 (-4.23%) Sell

OSTK investors dump it

13 min read

OVERSTOCK.COM, INC was among the worst performers today. It fell by -4.23% to close at 17.22. During the last week it fell by -8.7% and saw a maximum drawdown of -9.84% before bouncing back.

[Themes containing OSTK]

Buy-and-Hold investors in OSTK experienced a maximum drawdown of -40.5% over the last three months. It fell by -33.0% during this strong bearish trending period. There were no long signals during this period, where the short signal generated good profits of +33.0% for investors.


OSTK has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 3 Feb, 2016 to 8 Jan, 2018. Over the last 2 years 11 months and 10 days, OSTK outperformed the SP500 index on 50% days. Which indicates that on days OSTK outperforms the SP500 index, it's performance is marginally better than on the days it underperforms the SP500 index.

OSTK was profitable on 52% days in the last three months. During this time, it delivered on average -0.47% per day. It delivered it's best daily return of +23.26%, during this period, on Friday, 23 Nov, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 17 Sep, 2018 and went on till 21 Sep, 2018. This bullish trend returned +5.35% to investors.

During the last year OSTK had 4 profitable months and 8 loss making months. OSTK returned profits in fewer months than SP500 index. OSTK was also a more risky investment than SP500 index as it's worst month in the last year, Mar 2018, returned -39.98% compared to -7.28% returned by SP500 index in Oct 2018. OSTK had a longer winning streak of losing months than SP500 index. It went down in 5 straight months (from Aug 2018 to Dec 2018) during which period it delivered -67.05%. It is interesting to note that both OSTK and SP500 index significantly outperform during months when quarterly/annual results are announced.

Investing is a business, investment is a project and investor is a promoter.
-- Vijay Kedia

OSTK is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant fall in OSTK's volatility from 17 Sep, 2018 to 26 Sep, 2018. While there was a significant surge in the SP500 index's volatility from 25 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that OSTK has negative skewness in it's return distribution. This indicates that investors may need to stay invested through long periods of drawdown before expecting a recovery.

Investors trading in OSTK derivatives at this moment can consider 'Protective Collar' options strategy to receive better risk-adjusted returns.

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

Based on your interest in OSTK you may find it interesting to know that LULU, TWTR and ABMD are mid caps that have all shown remarkable performance and qualify to be on every investor's watchlist.

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