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How Large is OPN Portfolio?

Published on December 26, 2009

How Large is OPN Portfolio?

December 26, 2009

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

6 Comments

  • Avatar prakashsi says:

    OP, could you please share the screenshots you posted or are they meant to be hidden? They do not open into larger files and zooming does not work because the resolution is too low. Thanks for all of the information.

  • Avatar OptionPundit says:

    Prakashsi, I am not sure of the reason why pictures are not zooming out. I have sent you the pictures via e-mail.

    If any other member needs the pictures, pls leave a comment here and I shall forward it to you.

    Thanks for visiting OptionPundit.

  • Avatar hg says:

    please send the pictures

  • Avatar hg says:

    please send the two pictures of the before and after

  • Avatar OptionPundit says:

    Sent, pls check your inbox. Thank you for asking.

  • […] Before one get to a earn say $5-$7k/month; an engineer need to go through 4 years of professional education including one or two summer projects before he is allowed to be even called an Engineer Trainee. Medical professional is required even much more rigorous training before one is allowed to even touch knives for first surgery. Then why do people think trading is any different if it were to give you $5-7k/month to start? It’s because the “barriers to entry” are almost nothing; give a call to a broker, he can do the paper work for you, set you up with an electronic trading account, help you personally to transfer funds and all set and most novice traders can enticed by the marketing sales pitch that you sign-up for blah/blah and you can make money in 5mins/day. It doesn’t take long before one starts to realize that trading is not easy as it seems on the surface (sadly after either account is wiped out or suffered a major loss) . Making big %  may be fine for small capital account, but when it comes to large capital accounts, it is a completely different game. (How large are the investments via OPNewsletter Portfolio?) […]

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