OptionPundit

Category: OP Newsletter

  • OPNewsletter – May’09 (+9.48%), Jun’09 (Open)

    OPNewsletter closed May’09 for +9.48% x-commissions and +6.76% inclusive of commissions. As I stated earlier, after many months of waiting, we crossed our 60% portfolio investment target. It’s always an advantage if the capital was preserved. Yes we did have a few months of low returns, but that preserved capital is an out performance (vs general markets) already and now we can start using this preserved capital for further gains vs. wasting energy in recouping the losses. Just 1 single covered call (X) was more than enough to cover OPN fee  (and triggered no adjustment needs).

    Sign-up for the OPNWaitlist here.

    Maximum investment incurred was +64.4% (reached on April 23) and since then we continued to use that as basis for returns calculation even though we were generating credit since then for the next two weeks. Here is the tally-

    • IWM, USO and UPS were almost breakeven
    • USO was closed for +0.8% (after Mar @ >+22% and Apr@>+13%)
    • GDX closed for +18.38% in May
    • X closed for 23.29% gains
    • HAL was closed for +22.69%
    • AMZN was closed for +15.83% and
    • IBM was closed for +23.01%

    This doesn’t include bonus speculative trade on Visa earnings (V) that was closed for +35%, CSX , GS, GOOG and others some of which didn’t make much money or closed for breakeven. We have already opened our June’09 income portfolios and invested almost 35-38% of capital. After a few months gap, we opened a 160 points wide RUT Iron condor for $2.20 credit which is already making money in two days.

    If you would like to join OPNewsletter, pls sign-up for the waitlist here.

    Profitable Trading, OP

  • OPNewsletter : May’09 (+11.2%), Jun’09 (Opening Shortly)

    It feels great when a single covered call option spread (done only @ 7.3% of 10K portfolio) can deliver OPNewsletter monthly subscription fee, cover commissions and still deliver profits, without making adjustments throughout the holding period. And what if the newsletter doesn’t get a single cent if doesn’t deliver profits? Welcome to OPNewsletter (A “No Profit, No Fee” Newsletter)! It is up +11.2% (x-brokerage) and +8.5% including commissions for May’09 alone (a 16th positive month out of 17 months.).

    As I stated earlier, after many months of waiting, we crossed our 60% portfolio investment guideline. It’s always an advantage if the trading capital was preserved. Yes, we did have a few months of low positive returns, but that preserved capital is an out performance in itself (vs. general markets) and now we can start using this preserved capital for further gains vs. wasting energy in recouping the losses.

    Maximum investment incurred this month was +64.4% and we are continuing to use that as basis for returns calculation even though we are now in credit generation phase. We have +51.19% in cash (assuming 10 k portfolio) that we can start using for opening June’09 portfolio shortly.

    We are nicely positioned to reap further gains and we still have 2 weeks to go for May expiration. I don’t have to worry so much about the market fall as that will further benefit our portfolios particularly IWM.

    1. USO is up +5.36%
    2. UPS is up +4.8%
    3. IWM is up +7.19%
    4. GDX is up +4.04%
    5. X covered call was rolled after +23.29% gains
    6. HAL was closed for +22.69%
    7. AMZN was closed for +15.83% and
    8. IBM was closed for +23.01%

    OPNewsletter has been using Fundamental, Technical, Greeks’ as well as Market Psychology for trade analysis to create our portfolios and diversified into different sectors (Markets, Gold, Oil, Tech, Retailer, Transports, etc).

    dow-may-1-2009We didn’t do an Iron Condor for the 2nd month as I still don’t feel it is the right environment. Though, in retrospect it may seem that it is/it was but I am not convinced. See attached chart, Dow up almost 45 points in 3minutes before close, manipulations any one?

    I am thankful all the OPN members (old as well as current subscribers). Thanks for advocating OPN to your friends, colleagues and trading buddies. This has been helpful in adding constant stream of new members and still maintain the quality.  I am also thankful to all the members for participating in the forum and expanding knowledge horizon of other members.

    If you would like to sign-up or benefit from Jun’09 portfolios of OPNewsletter, pls click here to sign-up for the waitlist.

    Looking forward to opening June’09 income portfolios,

    Profitable Trading, OP

  • OPNewsletter (Outperformance)- May’09 +6.1%

    Option Trading is equally useful to retail traders and can generate consistent income if used properly. Hope you enjoyed the free trade alerts for some earnings play (You may sign-up for the Basic membership that is free till Dec 2009)

    A Fantastic week for OPNewsletter! We played HAL, IBM, UPS and AMZN for earnings and all these one day players nicely added value to the portfolio. We chose to close HAL and AMZN and to keep IBM and UPS for further gains. These were special circumstantial opportunities and we took full advantage without having to worry which direction stocks will move post earnings.

    After many months of waiting, we crossed our 60% portfolio investment guideline. Maximum investment incurred was +64.4% and we shall continue to use that as basis for returns calculation even though we are now in credit generation phase. We have 42.5% in cash (assuming 10 k portfolio). The capital preservation strategy worked nicely. We moved out of markets in early when OPN subscribers were clearly warned of the upcoming market meltdown when I shared the need to stay away should Dow slips below 10,697. That was on Sept 15th, well in advance before the real disaster struck. As I always say, if you know how to preserve trading capital, you can always make it back to market. At OPNewsletter, Capital preservation is always a higher priority than missing a potential investment opportunity.

    Net, overall OPNewsletter is up +8.62% (x- brokerage commissions) and +6.13% (including commissions). We are nicely positioned to reap further gains and we still have 3 weeks to go for May expiration. I don’t have to worry so much about the market fall as that will further benefit our portfolios.

    • USO is down -1.34%
    • UPS is up +3.67%
    • IWM is up +6.08%
    • GDX is up +8.46%
    • X is up +13.01%
    • IBM is up +19.88%
    • HAL was closed for +22.69% and
    • AMZN was closed for +15.83%

    (If you would like to join for “No Profit, No Fee” OPNewsletter, pls click here to sign-up for the waitlist)

    We have reached our investment capital deployment goal for the month and I am not planning to add any more investment capital unless there are opportunity that I don’t want to miss at all. I am not expecting any major adjustments except in IWM if markets make strong move up. The probability favors downside.

    Looking forward to 16th positive month for OPNewsletter.

    Profitable Trading, OP

  • OPN Apr’09 +12.5%, 15th Positive Month (Out of last 16)

    Get ready for an action filled week that has lot of economic data flowing in, traders returning from holidays and banks announcing earnings. Of course, Banks have to have positive impact due to “relaxation” in Mark-to-market accounting rules. This week is also flooded with other earnings and option expiration schedule, an excellent environment for exceptional opportunities.

    April was another winning month for OPNewsletter. 15th out of last 16 months. In spite of the whipsaws we observed, this month didn’t require much adjustment, almost sitting idle generating cash for OPN trades. OPN has successfully rolled over the portfolios for May holdings (If you would like to sign-up for OPNewsletter, pls click here).

    OPN closed +12.54% x-commissions +9.10% including commissions. We used up almost 38% of our capital. That’s a pretty good returns considering that we could sleep well without worrying about adjustments. If not the last few days volatility of X, the results would have been far better, but that also didn’t result into any significant adjustments and we closed +11.78% based on the way OPN calculates for intra month and >+6% even assuming the max capital.

    IWM and USO portfolio closed for +13.97% and +14.55% based on OPN way of calculation. Essentially the returns are much higher when compared with less capital involved (OPN uses the maximum capital invested at any point as the base for the whole month vs only for the duration it was used). For more information on OPNewseltter, pls click here. This was the 2nd running month of profits for USO. Last month we closed USO portfolio for +22.8%.

    The above result doesn’t include results from speculative trades i.e. SKF +100%, AAPL +100%, NKE and FDX Put and so on. Some of these free trades and also the SKF smiling, BAC Trade, and AA Earning play were shared for free with the registered members. You may want to sign-up for the Basic Membership (Free until Dec 2009) that I use to share free trade alerts for registered members.

    Net, a great month and looking forward another one. We have already started May income portfolios and are positioned to take advantage of market moves. If you would like sign-up for OPNewsletter, pls click her e for OPN Waitlist.

    Profitable Trading, OP

  • OPNewsletter (Apr’09) +7.6%, 15th Positive Month Out of 16

    A terrific week and 3 cheers to the Bulls for sustaining the momentum. Finally, my witty Oct’08 remark on “Mark to Market” relaxation a.k.a “do-what-you-want” came true; G-20 supported by $1trillions and a market that went down nearly-2% and then back up +6.5% to close overall +5.75% (Dow). Ups-n-down, and then up up and up. There is no doubt markets are overly stretched but continuous strength in the face of overbought indicators is a sign of strong momentum. Markets continues to discount all the bad news and turns bullish mad on almost at every ray of hope; I hope that light at the end of tunnel is not another locomotive.

    For OPN portfolios, so far, are doing fine this month as well. We increased our investments by almost 3.65% last week and in spite of this increase, we are up overall +7.6% x-commissions and +5.3% including commissions for April portoflios.

    • IWM Portfolio is up +7.46%;
    • X portfolio is up +17.2%,
    • USO portfolio is up +6.88%;

    So far we have deployed 37.8% of assumed 10K capital.

    This is the 15th month of positive gains for OPNewsletter (out of last 16) since I reopened it in Jan 2008 and this period includes one of the worst bear markets, at least of my life time. The success spells for the consistency and for the promise from OP “Powerful option trading strategies for Consistent Income“, month after month. And hence earning the buck for the work i.e. “No Profit, No Fee“.

    I shall start looking for May’09 portfolios soon. If you would like to sign-up for the OPNewsletter, pls click here.

    I hope you read a big picture post. There have been multiple +20% type rallies and even this time around as well. But this time it is different, it is on sustained buying power as well as sustain drop in selling pressure. But hey markets can do anything, anytime, so just be cautious and if you do plan to go long, you may wanna go in increments.

    If you would like to trade alongside OPNewsletter, pls click here

    Have fun, Profitable Trading, OP

  • OPNewsletter- Mar’09 +8.8%, Apr +2.4% (Open)

    March’09 portfolios were closed +8.8% (excluding commissions) and +5.6% (including commissions). I used up about +46.7% of the assumed 10K capital for OPNewsletter. This result doesn’t include excellent results from bonus trade alerts.

    market-movement-mar09-opn-portfolio When compared with broader markets, this was probably one of the best months for OPNewsletter. Look at the major market movements since we opened the Mar (Mid Feb’09) portfolio. RUT traveled almost -20% south; and DOW, S&P500 and Nasdaq ranging from -14% to -16%. All this was followed by sharp snap back rallies. Isn’t this amazing, almost 20% back and forth move in one month. I have not researched to find if this is one of its kinds or has happened before. But whatever be case, this is not income trader’s best friend. This was surely not an easy period. In fact one of the toughest and most volatile periods, at least of my lifetime (leaving aside Oct 1987 crash). Hence preserving capital and delivering just positive results itself is good enough. One of the strategy I used was to focus only what was opened and keep cash free to make adjustments as needed. This served nicely without really triggering panic due to shortage of capital. For Option Trading Strategies, We used multiple strategies i.e. Calendars, Credit Spreads, Digonal Spreads and so on. I however, decided not to open an Iron Condor this month anticipating extreme movements which also served nicely (There is not a single losing Iron Condor since re-opening of OPNewsletter).

    For OPNewsletter, The best performing portfolio was USO which delivered +22.8% and it was also rolled over to Apr. I expect this portfolio to deliver +50% by July. The worst portfolio was ABT which was almost break-even (+0.89%). MCD delivered +5.5%. A tough month though, it required greek’s analysis, technical analysis, gut feel and past experiences with similar situation (VISA, May 2008) helped sail through this month.

    Some of the excellent intraday trades, results not included in OPN tracking, were +42% on SRS, +58% on VIX, CF arbitrage of $6, DECK for +220%, AZO (+27%, +39%, +73%), SKF +20% to +50%, FDS lost to break-even, NKE earnings +22%, DELL earnings amongst others. As mentioned, These results are not part of OPN tracking.

    We are nicely positioned for Apr’09 portfolios as well and so far invested only +19.7% of assumed 10K capital. I shall be opening a few more portfolios next week, if you would like to join, pls sign-up for the OPN waitlist.

    Those who could trade intra-day, markets offered wonderful trading opportunities, specially on the Expiration day. A smiling butterfly was shared with all the free members as well, that resulted into >+100% gains. Hope folks who followed invescafe/speculative trade alerts (some of those listed above), probably had some good opportunities that I played for intraday trades.

    (You may want to sign-up for the Basic Membership (Free until Dec 2009) that I use to share free trade alerts for registered members).

    I have been experimenting with several underlying/strategy combos over past 3-4 months, with real money. I think I am ready for opening new Portfolios/newsletter(s) to take advantage from current environment. I shall share more on this later.

    One final message, markets are not out of woods yet, pls don’t let complacency set-in, these are extraordinary time and it requires one to be taking extraordinary steps.

    Trade Carefully, Trade Profitably, OP