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March’07, An exceptional month with 32.6% returns

Published on April 1, 2007

March’07, An exceptional month with 32.6% returns

April 1, 2007

Even though I couldn’t trade that actively in March, it was an exceptional month. Overall portfolio return in the month of March was 32.6%. I am an income trader and target 5-8% per month (on overall portfolio) therefore I don’t expect months like March to repeat quite often.

Key trades of the month include:

  • Directional Trade on LEND
  • Directional Trade on bankruptcy play NEW
  • Directional Trades on BKUNA, NDE and PDE
  • Income trade on DIA (where all the March quarterly expired worthless)
  • Income trade on RUT Iron condor (though my Bull put credit spread was a loser that nullified the IC gains).
  • Income trades on MER, NKE and XOM portfolios.

Due to my Holiday travel, I didn’t open any other income trades except to roll DIA March 123 put quarterly into April 123 puts. I am looking forward to open another DIA April call to complete the resulting Iron condor and benefit from margins involved. Double diagonal on VMC was also successfull and thefore I shall be analysing the characteristics to choose stocks vs only indices for double diagonals. I couldn’t play AGIX, but congrats to all those who made money from that ticker (especially the IC players).

Profitable trading, OptionPundit

5 Comments

  • Avatar Bryan says:

    Sweet. Often works like this, doesn’t it? If we just leave it alone for awhile and get on with life…

  • Avatar mike says:

    i bought into PDE off ur tip, and had a reasonable profit but still holding with pretty much break even after the pull back. i’d like to know ur thoughts on how to play out this trade. this is my pure speculation play based on your tip. i usually don’t do this but i couldn’t resist this one. 🙂 can u tell us when that same guy who bought 2 mil worth of options sells his options? 🙂

  • Avatar OptionPundit says:

    Thanks Bryan.

    Mike, that’s the issue with speculation, greed and fear always fight and test our emotions. I generally don’t buy long term straight calls or puts as theta works against me and therefor I design it in such a way where theta is positive, delta is positive as well (but not too much) if I am bullish. I think you may wanna set a profit target and as soon as it hits, get out and look for other opportunities (like today it’s up)

    Frankly, I don’t think it will be possible for me to tell when this guy will sell options. If you bought straight call and if you think you are bearish you may convert into bear call spread, if you are still bullish, you may want to reduce your exposure by selling some delta. A lot of ways, but totally upto you on how you want to manage this. Do drop me a mail, if you need help..I shall try my best.

    Profitable trading, OptionPundit

  • Avatar mike says:

    thanks for the response… pde just popped a bit ago, now up over 3%. the funny thing is, ever since you came out with that tip, this stock appears to be gaining volume, with pretty big pops on up days (a couple days of up 3-5%, and today up 3%), and the downside seems limited. for sure this stock is acting well on the bullish side. and, yeah, again–i entered this position as what i call my lotter ticket play. i basically go into the position ready to lose it all.

    thanks also for the tips of managing this position. but to be honest, i don’t plan on doing any “managing” for this position. 🙂 like i said, it’s my pure speculation/lottery play. if this thing pops and gives me a ridiculous profit, maybe i’ll sell, maybe not. who knows. if it drops and i lose it all, that’s the risk i’m ready to take. since i don’t play straight calls and puts anymore, these are very rare trades for me.

    i’m curious, what kind of data feed/software does one need to see LARGE positions like the PDE one go through?

    by the way, i’m new to this site. i like the content. but i have a feeling i’m not taking fully advantage of the information here. do you have tips on the best way to take advantage of the information at this site? so far i just subscribe to the newsletters (where i got the PDE tip).

    go pde! 🙂

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