OptionPundit

Category: OP Newsletter

  • OPNewsletter Feb’10 +6.55% (Open), Mar’10 (Opening)

    While the US Markets have suffered one of the steepest loss since Mar’09, OPNewsletter is enjoying gains for both income as well as speculative trades. As I shared earlier, we avoided the significant portion of correction as we invested only 36.5% capital, most of which was already converted into cash by 3rd week of Jan. Preservation of capital is something that one should never underestimate. I still recall when many members didn’t really preserved capital when I mentioned, a final call, to get out on Sept 15, 2008. I can’t share those heartfelt e-mails in which a lot of members mentioned about how bear market of 2008  wiped out their trading capital.  If you preserved capital during such volatile times that in itself is an out performance. At OPNewsletter, Preserving capital is preferred to investing in a “potential” opportunity.

    As of Friday close, OPN Feb 2010 portfolio is up +6.55% excluding speculative trades.  We have already started opening Mar 2010 Income portfolios. If you would like to enjoy both from Income as well as speculative trades, pls sign-up for the PONewsletter waitlist.

    Here are some details on speculative trades this month so far-

    1. Leader of the speculative pack was Mastercard (MA). As I was unsure about the earnings this time, this was a pure gut play via buying a cheap lottlery ticket with chances of 50/50 (more than neighbourhood lotteries. Sometimes you need to honour your gut as well (Pls don’t forget to ask your questions to Curtis, the author of “Trading from your Gut” ). The Feb $220 Puts, went all the way from $0.90 (purchase price) to over $6; but I suggested not to be greedy. Profits +377%!!
    2. Alcoa (AA) earnings- Loss; though those who converted into a bear call spread as I mentioned post earnings might have eventually broke even or made profits.
    3. FXP (ProShares UltraSh FTSE/Xinhua China 25). We purchased FXP stocks vs. options anticipating downward move in China stock markets on Jan 12, 2010; Profits +22% profits.
    4. ISRG profits were +20%.
    5. Then we played FSLR and I again mentioned a few times about $119 level; Profits +70%.
    6. $330 was an interesting price point on CME. We shorted CME via $330/$320 Bear Put spread when it was crossing $330 and decided to close early. Profits +16%.
    7. Just like Google (GOOG), AAPL is also a most watched earning event. Our strategic non-directional trade (for a range and without risking too much capital) for earnings paid-off nicely, and members closed it for +20% profits.
    8. Launch of iPad was probably a most buzzed tech news in the recent past. Even before Steve Jobs announced iPad, I suggested for a bearish trades, directional via straight puts (this was one of very few trades of straight options; I am mostly a spread trader). At OP, we have done it time and again during every Apple WWDC (Check it our here).

    We have already started opening Mar 2010 Income portfolios. If you would like to enjoy both from Income as well as speculative trades, pls sign-up for the OPNewsletter waitlist. Pls read subscriber’s testimonials that might help you understand more about OPNewsletter.

    Here is one from Kevin-

    I would be more than happy to share my thoughts with you about the newsletter service you provide to members. First off, let me begin by saying that your level of commitment to your subscribers is top shelf quality, and greatly appreciated. I have enrolled in a couple of other “advisory-type” services in the past, and could never duplicate the promised results that were advertised. Not so is the case with your service. Once a recommendation is posted, your timely adjustments certainly reflect what is going on in the market real time, and the attention you pay to detailed risk management is HUGE. It is very apparent you are trading what you are recommending, and the focus is living to trade another day. I can honestly say I did not expect this type of performance when I initially enrolled, but am quite elated and content with the service thus far. I would highly recommend your service to any option trader at any skill level. The answers you provide to your members are great in that you seem to realize a newbie does not need complex discussions, and the very advanced trader does expect more elaboration than “do this, or do that”. I also believe that your advertised results are accurate and repeatable by any member willing to spend the time required to learn this craft. I could highly recommend this service and would be more than willing to elaborate further if requested.

    Thank you for this opportunity to share my experiences, and keep up the great work”
    Warmest regards,
    Kevin Sass
    Gilbert, AZ, USA
    Trading Experience: Options Trading exclusively since Feb 2007

    Markets are at important crossroad. Currently oversold in short-term, but overbought in the medium and long term. Trade carefully.

    Profitable Trading, OP

  • Testimonial of the Week

    For US stock market, it was almost a flat week in general. However, beneath the surface, market internals are suggesting a short term pull back. Albeit, this is an interesting market that has been trending up defying all technical (probably except one) or fundamental indicators. This is a market that is overvalued, overbought, overbullish, facing with rising yield conformation and much more, but guess what, “market can remain irrational longer than you can remain solvent”.

    Dow Jan 15 2010Look at the chart attached, and you will notice that Dow has been pretty much trending in a channel for the past 9 months. As soon as it hits the upper channel, it pulls back and similarly when it hits lower channel, Dow rises. However, look closely and you will notice that, in the past 6 weeks, for first time Dow has been creeping slowly up but towards the bottom of the channel.  Is there a change in Market’s mood? we’ll only know in retrospect.

    Here is the OPN testimonial of the week from one of the oldest member of OPNewsletter.

    Dear OP,

    I have been a keen reader of your blog for almost a year and when you initially started OPN I jumped in rightway knowing this is once in a lifetime opportunity to learn from somebody who is the top of his game. What I admire most about you/OPN is not just the trades but the education and the personal touch. I feel like I am communicating with a mentor and friend.

    Learning from you is an incredible experience. Your depth of knowledge is vast and you can explain in a language one can easily understand. Prior to discovering your website my experience with options is primarily long calls , puts and vertical spreads at best. You introduced me to income trading and inspired me to learn a lot about options. These strategies suit my style where I don’t have to watch the market tick by tick.

    Your results speak for themselves. They are consistent and outstanding in a market as volatile as it can get over the last one year. I am looking forward to work with you for a long long time. Finally I want to thank all OPN members for making OPN an outstanding community.

    Sridhar A
    New York, US
    Investment experience: Stocks – 8 yrs, options – 5 yrs

    Sri has been an active OPN member and pulled together lot of resources on Option Trading/ OP’s style of trading so that other members can shorten their learning curve. He has also been actively sharing his trading knowledge with other members via OPN discussion forum. Thanks Sri. I sincerely appreciate the kind words and help.

    Continue to read more testimonials here.

    Profitable Trading, OP

  • Testimonial of the Week

    A very Happy New Year to all the OptionPundit readers. May this new year bring lots of love, good health, peace, success and prosperity to you and your loved ones! May the 2010 be a shining year that we shall remember as a year of transformation that brought lot of cheers to the world community and economy.

    This is to start a weekly column on OPNewsletter testimonials. I am always grateful for the trust you’ve placed in me and thank you for championing OPNewsletter.

    Hi OP,

    I find it hard to put into words the value of the service you (and the whole OP community) offer the individual retail trader and investor. In my opinion, this style of options trading is the only path to consistent and repeatable profitability. I also have not found another service that puts all of these strategies together the way that optionpundit.com does. It feels like a true group of friends and peers that are learning and growing together, not just someone taking our money and throwing out trade ideas. I sincerely appreciate the time and efforts you put into your service for your members, especially at the price you offer it for. True knowledge is priceless.

    Thanks Again,
    David Castello
    Ormond Beach, Florida, USA

    Continue to read more testimonials here. David is currently venturing into real estate, to benefit from opportunity that exist in the foreclosures. He has started a thread on OP Discussion forum and if you are interested in joining hands, why not drop a message on the forum.

    Happy New Year!

    Profitable trading, OP

  • How Large is OPN Portfolio?

    Contrary to what many newsletters might tell you, designing option trading strategies to invest large amount of capital is not easy. You can’t invest a big portion of your capital, for instance $200K, into a single iron condor (a strategy that is considered low risk, high probability yielding 4-5% month after month) unless it’s a very small percentage in your portfolio.

    Since OPNewsletter has been using $10K as a model capital for OPN portfolios, my earlier assumption was that subscribers invest roughly the same range for OPN strategies. However, members have been asking for strategies for large amount of capital. So before I start investing time and effort to design additional strategies, I wanted to assess current capital investment size in OPNewsletter. I, therefore, conducted a small survey asking subscribers to share details of their current capital allocation for OPN strategies and also to share additional capital they are planning to invest for OPN. I am very encouraged to share generic results that tell me a different story vs. my assumption.

    OPNewsletter Investments Overall 61.54% of OPN subscribers responded to this first ever capital investment survey. According to this survey-

    • Average/Subscriber is over US$65K,
    • Median investment was larger than US$32K; the future plan to invest is roughly double.
    • While 40% invest less than US$25K (but greater than US$10K), 2% of respondents invest over U$500K.

    In order to check genuineness of the above information, I then checked actual trading volume in options that OPN suggested. Here are two screenshots of MDY options trading volume and these are taken before and after the alert of creating a MDY Jan’10 Income portfolio.

    MDY Volume prior to the alert

    2009-12-09-StockAndOptionQuoteForMDY post opn alert

    The first picture is before the OPN alert was sent and next picture is after the close of the day. For additional confirmations, I also took snapshots of ThinkOrSwim’s spread book (I am not sharing that here).

    This wide range of investment size confirms that OPNewsletter caters to a wide range of investors. At the same time, this also entrusts more responsibility to carefully design portfolio and focus on risk management.

    Wishing you a Merry Christmas, a bright and happy Hanukkah, and the blessing of knowing your blessings. Always, I am grateful for the trust you’ve placed in me.

    Profitable trading, OP

  • OPNewsletter Dec’09 +13.2%; Jan’10 +3.7% (Open)

    Another excellent month for OPNewsletter delivering almost double of monthly aim (5-7%).  OPNewsletter returned 13.2% in Dec 2009 thus completing a full year without any monthly loss in 2009. Jan 2010 portfolios are already up +3.7% and we have invested 78% of portfolio capital across 4 different income portfolios.

    OPNewsletter has been consistently outperforming broader markets. Pls read customer reviews; If you would like to sign-up for OPNewsletter directly, pls click here to sign-up for the wait-list (subscription is by invitation only).

    For the benefit of other OP redears, I shall restate what I shared with OPN members earlier.

    For all the portfolios we are short delta. And pls note this is an intended directional strategy for a short period . I have chosen to be short delta as I am sensing a sudden move in near future; My guess is a downside move but it may happen on upside as well. If it is towards upside, I am ok to give away a few % from the portfolio gains but if this is a downside move, we shall reap larger gains both due “short delta” and “rise in IV“. This is a short term strategy, though. If that doesn’t happen anytime soon, we’ll adjust the portfolios to make it more delta neutral.

    Markets are not heading for another 50%+ run-ups from here. Most of the good news has already been factored and the economy now has to deliver.

    Could US default on it’s debt?

    (more…)

  • Few More Words from OPN Subscribers

    From time to time, I keep reviewing if OPNewsletter has been adding value to OPN subscribers. Making money is one thing, helping others make money is all together a different story. I am pleased to share that OPNewsletter continues to deliver its promise and at the same time our learning database continues to grow day after day.

    Here are a few latest testimonials from relatively new OPN members-

    I have only been with OPN for a few months but I will try and summarize my experiences.

    The start for me was very turbulent. I can barely broke even on OP’s portfolio’s (even though all of them made money each month) and actively considered not renewing the service after first 3 months. I understood the basic concepts of calendar Spreads, Iron Condors , Double Diagonals etc. but really did not clearly understand the way ones needs to trade and get good fills. This took some real money and patience to understand how the market behaves. I am still learning this, but working with OP help’s and guidance I have made huge strides and profits. The key to this is how he adjust the trades based on the market direction.

    The reason I would recommend this is that OP does not use any assumed fill to manage his returns. They are real, based on fills his subscribers get. I cannot name another service which does the same. The returns he posts, are clear and have a complete audit trail. When there are multiple fills at different prices, he is fair to take the ones at the middle.

    The use of the online Forum to post his thoughts and clear insight into the risk and plans of the trade make it very simple and easy to follow him.

    This is not a service for a hyper active trader or someone who can only look at their portfolio once a week. However if you are willing to invest about 1 hour each day, it can be a very profitable route. OP’s strategies are based on sound fundamentals and prudent risk analysis with great portfolio management.

    -Mufazzal
    Phoenix, AZ

    Thanks Mufazzal. I hope to continue to add value to your learnings as well as portfolios.

    Here are some more encouraging words from another subscriber who wanted to keep his name private.

    Overall, I have nothing but good things to say out the service.

    • How is your experience with OPN?- I’ve been a subscriber for several months and am very pleased with the OPN service.
    • How is it different from other Newsletter services? – Compared to other newsletters, I believe that OPN outperforms other services. OP is always available to respond to any questions, comments and concerns. OP has also taken subscribers’ comments into consideration when putting out recommendations and analyses.
    • How is OPN keeping up with its promise?- Yes, OPN is keeping up with its promises.
    • If you were to recommend OPN to your friends, what will you say?- It’s a great service, well worth the price.

    I would prefer to keep my name private, however, you can use my city – Los Angeles – and investment experience – 10+ years.

    Thanks.

    Thank you for your encouraging words.

    If you would like to read more testimonials from OPNewsletter subscribers, pls read here or more here. If you would like to sign-up for OPNewsletter waitlist, pls click here.

    Thank you for reading OPN customer feedback,

    Profitable trading, OP