OP Newsletter: Outperformance (Mar’08 Closed, +16.5%)

Another successful month in spite of ups-n-down of the markets. OPNewsletter closed Mar’08 completely for a +16.5% gains, nearly a 1% more than last week when were were left with only 20% investment (80% cash). We are now in 100% cash and are ready to take advantage of the new opportunities and start Apr’08 portfolios as well. This was 10th successive month of the postive gains and 9th month of double digit gains. It is far exceeding the objective it seeks for i.e. 5-7% month after month.

First of all I would like to thank OPN subscribers for the encouraging feedback that ensured me that OPN is delivering value to them. I will be publishing 2nd round of feedback in a day or two.

There was a typo error in the last tracking and hence last week’s results were 15.5% vs 16.8% as reported. I have explained this to OPN subscribers on the forum. So, as OPN subscriber if you are reading blog first, check out the forum for explanation.

This was not an easy month for the income trader, especially looking at 200-300 points swings every day. Make adjustments on one way, then triggering adjustments on the other direction. Though we also had to adjust risks in our portfolios, but it was very well contained. We allocated only 64% of our capital for the investment that delivered 16.5% on that, helped us grow our overall capital by little over 10%.

bsc-intraday-trade-mar-08.png BSC was hammered very badly. IV for the options had increased exponentially. Nearly 187 million shares exchanged hands, the largest ever in it’s history since it went public. Playing via options was very tough for an intra-day trade as the bid-ask spread was very wide. I traded the stock, picked up some at $32.63, sold in 2mins at $36.86, again picked up at 35.20, sold at 34.4, picked up mar 22.5 options at 2.25, sold at 2.50, again picked Mar 25 at 3, sold at 4, all within a very short span of time. Potential bankrupts are my favorites, Thanks to my losses in Enron and Wcom, they were such a wonderful teachers. However, I couldn’t share this with the OPN subscribers as this was very risky and hugely volatile. I only share speculative trades if at least there is sometime for the subscribers to react and grasp the situation instead of rushing to trade.

Moving forward, we are going to have one of the most volatile week again. Monday BSC hangover and Industrial production, Tuesday Housing Starts, PPI and FOMC meeting, Thursday Mar’08 Options Expiration. This is not going to be an easy week so relax well over the weekend to trade carefully next week.

Profitable trading, OP



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3 responses to “OP Newsletter: Outperformance (Mar’08 Closed, +16.5%)”

  1. Options Strategery Avatar

    Thursday is crazy everything expiration. I just want to be out before then. I hate Friday holidays on quarterly expirations.

  2. Tony Chai Avatar

    Oh boy. JP Morgan is paying only $2 for each share of Bear Sterns. Would Lehman be going the same route since they also have heavy subprime mortgage exposure.

    Tony Chai

  3. […] I expected earlier, it was not an easy week. Happy Ester and a fulfilling, well-deserved long […]

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