OptionPundit

Category: OP Newsletter

  • OPNewsletter (Jul’09) +3.55%

    Last week markets tried very hard to rally but ended in negative territory. Market’s character can now be defined by more of “withdrawal of demand” vs anything else. For overall OPNewsletter, we have invested 38.7% of assumed 10K capital. As of last Friday close, we are up +3.55% x-commissions and +2.2% including commissions. I usually aim for +60% capital deployment but overriding philosophy here is “preservation of capital is more important that missing a potential investment opportunity”.

    As of Friday closing, here is an update on OPN portfolios-

    • IWM is down -0.47%
    • X is up +4.50%
    • GDX is up +5.13%
    • DIA is up +5.26%

    This doesn’t include returns on speculative trades of either VIX or RIMM.

    As I shared earlier, market internals are deteriorating day by day. I don’t know when will the tide turn upside down. [b]If you have a long stock portfolio, you may want to erect defense lines while the IVs are lower and defense will be cheaper]. There is no harm in reducing the gains in order to protect and preserve capital. Making money is not difficult, preserving it is.

    If you would like to sign-up for the OPNewsletter, pls click here to reserve your place. Or if you would to read what other customers think, pls click here to read subscriber’s testimonials.

    Profitable Trading, OP

    (This post is 2 days old, original post was published on the forum for OPN Members)

  • A Record Month OPN (Jun’09) up +14.7%

    June 2009 was a record month (2009) for OPNewsletter! Overall June’09 OPN is closed up +14.7% (x- brokerage commissions) and +12.1% (including commissions). We invested almost 60% of 10K assumed capital across various sectors and diversified strategies. All the portfolios were closed positively. Overall an excellent performance that was almost double the OPNewsletter objective of 5-7% per month.

    Here is an update by individual portfolio-

    • GDX was closed for +5.15%
    • UPS was closed for +8.9%
    • X was closed for +13.85%
    • RUT was closed for +23.08%
    • DIA was closed for +22.89%
    • IWM was closed for +26.07%

    This doesn’t include returns on speculative trades on POT, GDX and GMCR, MCO and AAPL (Pls read here on OP calculates it’s results)

    To Reinforce what I said last week, and I still believe in it-

    Believe it or not, market internals are deteriorating day by day and the surprising thing so far is that it is still holding very well. I have trimmed my personal stock holdings by almost half (as lot of those increased by almost 60-70% in a few weeks time). The only holdings where i still continue to hold (or rather increase on every pull back) is gold. But pls don’t follow it without full due diligence as gold trading is not for everyone.

    This time around, our strategy was slightly different vs. usual way of adjusting. We were short delta all throughout the month, expecting for a sharp correction which didn’t arrive but markets didn’t rally either and didn’t go beyond the expected upsides break-even. This was a well thought out technical as well as psychological analysis that helped determine what to expect and when to move. We were short delta and as soon as markets fell, our results improved.

    This was another record setting month for RUT Iron condor. Since re-opening OPNewsletter in Jan’09, OPN’s RUT Iron Condor never lost money and just one condor alone was more than enough to pay for the subscription.

    We have started to open Jul’09 income portfolios. If you would like to sign-up, pls click here to join waitlist.

    Profitable Trading, OP

  • OPNewsletter Jun’09 up 11.7% (Open), Jul’09 (Opening Soon)

    Another turbulent but positive week for the broader markets. I sent out a note to OPN Subscribers and Basic Members (Free, till dec’09) that don’t trust the sharp rally post employment numbers. The rally did disappeared.

    Overall OPNewsletter gained almost 3% this week, we did raise investment capital by a few percent behind some adjustments. Overall OPN is up +11.77% (x- brokerage commissions) and +9.27% (including commissions). We have invested almost 60% of 10K assumed capital across various sectors and diversified strategies. As of Friday closing we have 44.11% cash available that we can start employing for July’09 portfolios.

    • RUT Iron Condor was closed for +23%
    • GDX increased to +7.95%  from +2.27%
    • X portfolio increased to +12.37% from +10% last week
    • UPS increased to+6% from -2.33% last week
    • IWM portfolio decreased to +13.3% from 17.78% last week
    • DIA increased to +19.6% from +3.4% last week

    So far 100% winning record on RUT Iron Condor wins since I reopened OPNewsletter in Jan 2008. That is “Consistent Income” from option trading. The above returns doesn’t include returns on speculative trades on POT, GDX and GMCR.

    Though we are short delta, Theta and Vega are in our favor. Just one more down leg in the markets and our results will significantly sweeten by few more percentage points. But again, hope is not a strategy. Believe it or not, market internals are deteriorating day by day and the surprising thing so far is that it is still holding very well. I have been trimming my personal stock holdings as lot of those increased significantly over past few weeks. The only major holdings where I still continue to hold (or rather increase on every pull back) is gold. But pls don’t follow it without full due diligence as gold trading is not for everyone.

    If it walks like duck, if it quacks like duck, it might possibly be duck. The markets are showing symptoms of “Bear Market Rallies” so I shall count for higher probability on that. But as I always mention, be prepared for this rally as a “bull rally” too. Anything can happen and a true market participant is ready for both possibilities.

    Trade carefully, Trade profitably, OP

  • OPNewsletter Jun’09 is up 8.6% (Open)

    A turbulent but positive week for the broader markets, as well as for OPN. OPNewsletter is up +8.6% (x- brokerage commissions) and +6.6% (including commissions). This excludes returns from bonus trades on GDX straight calls, GMCR and POT. Though we have started generating credit thus increasing the cash portion, we are still assuming 57.3% of 10K as maximum capital invested to calculate OPN results. 10K is a model capital, but these are pretty much scalable to several times.

    Sectors include – Steel, Gold, Transport, Overall General Market and Strategies include Iron Condor, Calendars and Covered Calls.

    • GDX is down from +5.3% to +2.27%
    • X is flat +9.6% last week to +10%
    • UPS is up -5.11% last week to -2.23%
    • RUT Iron Condor is up from +18.27% to +22.12%
    • IWM is flat 17.78% last week to +18.28% this week.
    • DIA is up from +3.4% to +6.6%

    This doesn’t include returns on POT (>+30%), GDX (almost double) and GMCR(>+5%). If you would like to join OPNewsletter, pls click here.

    I shared another free trade idea [those who are either Basic Member (Free until Dec’09) or OPN Members received the alert] on Moody’s (MCO) which is also in positive territory inspite of MCO moving up.

    My Bias- I am still in the bear’s camp but I am also doing selective buying.

    Have a great weekend, profitable trading, OPПодаръци

  • OPNewsletter Jun’09 is up 7.34% (Open)

    OptionTrading|Recent Market MovementA week in which Dow moved between +2.5% to -1.75%, S&P500 from +3.25% to -1.5% and RUT from +4.75% to -1.50%, and all closing in negative territory, OPNewsletter gained +2% that too after increasing capital investment by 36% over last week. Overall OPN is up +7.35% (x- brokerage commissions) and +5.3% (including commissions). This excludes bonus trade gains from GDX straight calls, GMCR and POT. We have invested almost 57.3% of 10K assumed capital across various sectors and diversified strategies.

    Sectors include – Steel, Gold, Transport, Overall General Market and Strategies include Iron Condor, Calendars and Covered Calls.

    • GDX is up from -2.27% last week to +5.3% (and BTW GDX moved almost $5 in last week, and those straight speculative calls might have doubled)
    • X is up from -1.15% last week to +9.6%
    • UPS is down from +3.88% last week to -5.11%
    • RUT Iron Condor is up from +9.6% to +18.27%
    • IWM is up from +12% to +17.78%
    • DIA is up +3.4%

    This doesn’t include returns on POT (>+30%), GDX (almost double) and GMCR(>+5%). If you would like to join OPNewsletter, pls click here.

    This 2nd leg of rally since early May has been characterized by thin volumes. The volume is increasing on the down days and reducing on the up days, showing signs of increasing market fatigue and probably some degree of further market weakness could be ahead. Will a limited correction be followed by another attempt at new rally highs? Or, is it possible that a decline back to the March lows, or below, could occur in the weeks or months ahead? As Market Veteran Richard Russell of Dow Theory says- “Dollar down, bonds down, gold up, it all fits together — trouble.”

    We’ll address more issues when market returns to full trading volume post long weekend holidays.

    Profitable Trading, OP

  • OPNewsletter (Jun’09) +5% (Open)

    US stock markets in general declined from -2 to -3.5% across various indices while overall OPNewsletter Jun’09 portfolio are up +5.0% (x- brokerage commissions) and +3.11% (including commissions). We have invested almost 42% of 10K assumed capital across various sectors and diversified strategies; we still have 15-10% for deployment to go. Sectors include – Steel, Gold, Transport, Overall General Market and Strategies include Iron Condor, Calendars and Covered Calls.

    (Sign-up for the OPN waitlist here)

    As I mentioned earlier, It’s always an advantage if the trading capital was preserved. We are now beginning to redeploy this preserved capital as per original objective for furthering gains vs. wasting energy in recouping the losses. The performance of the portfolios for the first week as stands on Friday closing-

    • GDX is down -2.27%,
    • X is down -1.15%
    • UPS is up +3.88%
    • RUT is up +9.6%
    • IWM is up +12%

    Check out here for May Performance. In order to limit quantity (as it increase “trade fill” chances for members) OPN subscription is by invitation only, if you would like to join OPN, pls sign-up for the waitlist here.

    I shared a free trade (sign-up for the basic membership that is free util Dec’09) on GMCR. The Covered put spread is up +3.2% and bear debit spread almost +10%. Jury is still out there if it is topping out or it is just a minor correction on the upward move.

    Here is another thought for a potential trade- I am generally bullish on gold (and been vocally so since Bernanke cut his first interest rate during late 2007 and I called out, in Oct/Nov’07, potential bear market ahead). $39 is a resistance area for GDX and so is about $1000+ for Gold. If you have risk appetite and capital that you may afford to have losses on, get into straight calls for either GLD or GDX. Gold hasn’t seen the mad rush yet and I think next leg lies ahead of us. But don’t be greedy and risk only what you can afford based on appropriate capital allocation.

    Trade carefully, Trade profitably, OP