OP Newsletter (Jun’07 +33.5%, Jul’07 +1.27%)
Published on June 16, 2007
OP Newsletter (Jun’07 +33.5%, Jul’07 +1.27%)
June’07 income trade portfolio is closed and I am happy to announce that this is 2nd month in running for a double digit growth (My target is 5% to 7% monthly return on overall invested capital). May portfolio delivered +22% and June delivered +33.5%. OPN is my real money portfolio. I don’t believe that by just investing in 1 trade, generally an Iron Condor as shared by several newsletters, one can grow his or her portfolio for 1000s% gain compounded, maybe, but not for me as I will never invest all my money into one trade and therefore I use a potfolio approach (Portfolio allocation guidelines).
Here is an example from OPN:
For June income portfolio, I was invested in 5 underlying with 3 different strategies (Iron codor for RUT, Bullish calendar for BA, Calendars on OIH and SHLD) and 3 different sectors (OIL – OIH and MRO, Retails-SHLD, and Air Transport/Defence- BA). Once the risk/reward for SHLD was not in favor (before earnings), I closed it for 14% and moved the funds to open MRO calendars which resulted in >33% gains. So it is a mix bag of strategies and underlyings.
For July income trade portfolio, I have 4 miniportfolio opened (2 in Oil, 1 in Tech and another one is RUT index Iron Condor). Out of 4, 3 are making profit and 1 is losing. As of now, I am not worried about the losing trade as there is lot of room to make money in this trade. Overall portfolio is positive resulting in 1.27% gains. June expiration is now over so expect theta for all these 4 to accelerate. You will find updates for each underlying thread for Jun’07 and Jul’07 on the forum as well (Pls note you should be an OPN subscriber to view these exclusive boards, rest of the forum is free).
Separately I had also shared a BA double diagonal for free to OP readers. This trade is already making 8% gains.
Profitable trading, OptionPundit
Please define “overall invested capital” and speak to its relationship with total equity available to trade.
Dear Bill,
Assume we have $10,000 overall capital for portfolio but we are investing only 80% of it into several trades/mini-portfolios, then this 80% capital is defined as “overall invested capital (OIC)”.
Regards, OP
Ah, so the next question is, what percentage of overall capital was invested in the May and June expiration portfolios?
Dear Bill,
Generally speaking, personally my 70-80% capital is invested. However, I think this may vary from person to person and per his/her portfolio strategy/guideline. There may be a trade I like very much so I might invest more, other may not. So I guess there is no straight answer to this.
For the calculation purpose and to keep it simple, it assume 1 spread per mini portfolio.
[…] Major stock market fell last week. S&P00 fell by 1.85%, Dow by 1.95, Nasdaq by 1.85% and RUT fell by 1.30%. OPNewsletter’s overall portfolio (consisting of 4 mini-portfolios) on contrast gained by 6%. If you were an OPN subscribers, pls check your e-mail for the details or at forum for each underlying thread for Jun’07 and Jul’07 (Pls note you should be an OPN subscriber to view these exclusive boards, rest of the forum is free). Here is the last update (June +33.5%). […]
[…] While the markets experienced ups-n-down during last week packed with lot of data, Major stock market closed pretty flat. OPNewsletter’s Jul’07 overall portfolio (consisting of 4 mini-portfolios) on contrast gained by 3.7% during the week and overall it is up by 11%. If you were an OPN subscribers, pls check your e-mail for the details or at forum for each underlying thread for Jun’07 and Jul’07 (Pls note you should be an OPN subscriber to view these exclusive boards, rest of the forum is free). Here is the last update (June +33.5%). […]