2026 Q3 PM Note

At the end of Q2, I had spent roughly 150 hours building this project and still could not say that it was worth it. Too much activity, too much reliance on option premium, and too many trades trying to recover from earlier mistakes.

For Q3, the portfolio returned 14.62% in CAD against 2.14% for the S&P 500 Total Return benchmark in CAD. That is meaningful progress! But as always there is important context to the exact timeframe when measuring investment returns. All it takes is an outlier to make huge material changes.

The goal is to build discretion that makes money over time and leaves me better off than simply holding SPY. Each quarter should help me figure out which decisions deserve more confidence and which habits need be purged.

The most useful price reversal during the quarter was IBIT. It hurt in Q2, then became the largest core contributor in Q3. The passive 20% IBIT allocation needs time to work and it looks like bearish trend for crypto during 1H 2026 has put in some type of bottom on the chart for now.

Looking at activity, total transctions fell from 72 in July to 54 in August and 34 in September. By September, none of my daily exposure limits breached which speaks to how quiet the market got during this time as well. My active trading still contributed positive absolute returns while I was touching the portfolio less. That is the results I wanted after May and June chaos.

The VIX started falling below my bottom limit for VIX (16) during August and half the month of September. The market got quiet and volatility was dampened across the board providing less opportunity for active trading. About mid-September volatiltiy started to look bottomed out, there was a small spike into FOMC mid-month, and to me the market is looking to grow volatility thoughout Q4, so i’m expecting a new type of regime to unfold soon.

As of October 2 today, I switched SPY into RSP, increased equity exposure, and I’m holding short one OTM NVDA call. I expect volatility to pick up, but i’m trying to maintain passive exposure and avoid selling any OTM puts. The NVDA call is uncovered. In my mind this is defensive positioning for October even with an uncovered call. I am still positioned to gain equity risk premium with a larger RSP exposure but this in combination with being short one NVDA call means I am short the risk of big-tech and “AI economics”. I also sold covered calls on IBIT position in september but they will hopefully just expire mid October. 100k bitcoin could easily be real in the next 6-months from my view so I’m trying to not cover updside but I couldn’t resist in September.

Discretion includes knowing when my view will no longer grow capital. With the lower activity and passive positioning I have currently, it makes discretion easier since I can have several days or weeks to make my next decision. The downside of less trading activity means my short-term income potential is reduced. When/if volatility picks up, then there should be more opportunity for short-term income if I can stomach the risk and the mental bandwidth it requires. Success for me really depends on how detached I can be from chaos/noise in a high volatiltiy regime.

Q3 gives me more confidence in continuing this project and reporting performance publicly for educational purposes. There is a lot of things to keep from Q3, I hope it is the first of many.

-Carl

My own capital. Returns are time-weighted and pre-tax; after-tax outperformance remains unmeasured. Not investment advice.