OptionPundit

Tag: Income spread trading

  • OPNewsletter April +9.7% (closed); May +12% (Open)

    While markets are struggling to make any meaningful advance, for OPNewsletter, we are having another excellent month. We closed April’10 portfolios for +9.7% gains, and for May income portfolios, we are up +12% with 3 weeks to go. These results don’t include gains on speculative trades. Another point to note, these were also two months when I significantly upped investments allocation. In April’10 we invested 88% of capital and this month we invested 75% of capital. If one considers compounding effect, these income trades resulted in +18% gains on overall capital in just two expiration cycle alone (still 3wks to go).

    We achieved most of these results, by having plans in advance and shifting our option trading strategy in way so that more trading alerts can be sent before or after market hours to allow even working professionals to benefit.

    OPTweetsHere is a snapshot of my speculative trades (even for free ideas, just check the screenshot of my tweets). It was an excellent time to generate gains from Goldman Sachs (GS), Harman (HAR), Wynn Resorts (WYNN), VIX, Google(GOOG), Baidu (BIDU), Intuitive Surgical (ISRG). The only losing trade was McAfee (MFE) (we played it as a takeover rumor) which was also up +40% at one time.

    If you are not an OPNewsletter member and would like to sign-up, pls click here to sign-up for the waitlist as OPNewsletter subscription is open via invitation only.

    It has been over 3 years since OPNewsletter was first introduced. I am so thankful to all subscribers and a special thanks to those who have been with me since the beginning. It’s been an absolute pleasure and honor to serve this community.

    As part of my final phase of OP Brand development, I am discontinuing “No Profit, No Fee” business model after May expiration cycle and make it a fixed fee. Old members may recall OPN Phase-1 was introduced @ $28/month, Phase-2 @ $148/month. I shall continue to limit subscribers through waitlist so that we continue to have quality in the OPN besides obtaining fills for our trades; for new members, their first month will still be “No Profit, No Fee”.

    With this change, I hope to bring more value to OP subscribers via-

    1. Introducing multiple months’ strategies; tracking those on monthly basis is challenging as those span over various months.
    2. Introducing more opportunity via additional income trades; I often run out of the limit for a $10k model and hence I step back from suggesting new trades.
    3. Spending time on developing OP into a full scale Option’s boutique introducing trading options on futures, forex and add even other countries.
    4. Eliminate transaction time required in refunding; instead redeploy that time to find more opportunities.
    5. Spend more time/develop plans for speculative/directional trades as well.

    I hope to bring more and more value to OPN members and make it much more rewarding experience. Thanks again for your valuable feedback.

    OPNewsletter is still not about “make money” in 5min per day. It still requires one to think and act vs let robots do it for them (at least to begin with). There are no short cuts for making money, consistently. Making money is a hard work and requires one to be patient and to learn and continuously sharpen the craft.  If you are not an OPNewsletter member and would like to sign-up, pls click here to sign-up for the wait list as OPNewsletter subscription is open via invitation only.

    Though it is still an art to make 5-10% monthly on small capital, making rather big % on large capital accounts, consistently, is a completely different game. (How large are the investments via OPNewsletter Portfolio?). That’s what the aim is, so that even if you have a medium to large sum of capital from retail investor perspective, OPNewsetter should be able to help you make consistent income.

    Option Trading strategies used were Double Diagonal, Iron Condor, Iron Fly, Butterfly Spreads, Credit spreads, Calendar spreads, Vertical spreads and some more.

    If you are not an OPNewsletter member and would like to sign-up, pls click here to sign-up for the waitlist as OPNewsletter subscription is open via invitation only.

    Should you have any questions, pls let me know,

    Warm regards, OP

  • OPNewsletter Jan’09 : +4.06%, Feb’09 (Opening Soon)

    OP Newsletter Jan’09 Income portfolios grew to +6.84% excluding brokerage commissions. However, including commissions; overall OPN grew by +4.06%. Our Jan’09 Income Iron Condor is closed for +14.27%. Just for perspective, not even a single OPN RUT Iron condor lost money in 2008. For Jan’09 portfolios, OPN used up maximum of 34.14% of overall assumed portfolio capital and after profit booking OPN has >80% cash available for investing into other opportunities.

    These results doesn’t include returns from bonus trade alerts (for instance, shorting treasury pick is up > +10% since my last post).

    We shall start wrapping up Jan’09 income portfolio this week and start opening Feb portfolio soon. If you were waiting on sidelines to join OPNewsletter, this maybe the right time to sign-up as we shall be opening new portfolios.

    Profitable Trading, OP

  • OPNewsletter – Dec +15.9%, Jan +0.46% (Open)

    December’08 was another positive month for the OPNewsletter delivering +15.9% including commissions. We prioritized preserving capital and invested only +14% of the assumed 10K portfolio inline with OPN’s philosophy of “When in doubt, Protect Capital first”. Even if we assume returns on overall capital that was a positive +2.23% after commissions. With the exception of Aug’08, 2008 overall was a wonderful year for OPNewsletter and its subscribers. OPN has outperformed almost any major market benchmark or any other major asset class (Dow, S&P500, Nasdaq, Gold, etc.). I shall share more details later.

    We have started opening our Jan’09 income portfolios and in the first week of opening, OPN is up +2.3% excluding commissions and +0.46% including commissions. We have invested 16.2% of trading capital this month so far, as Volatility and wide bid/ask spreads are not allowing to open good risk/reward trades.

    One of the key measure for any service oriented business is “customer satisfaction” in delivering the promise. How successful OPNewsletter is in terms of serving its subscribers? here is a testimonial (Sent on Nov 7, 08) from an OPN’s subscriber (for more testimonials, pls click here)

    Hi OP,
    Let me tell you that one thing. for OP subscribers the return on investment in last 60 days on paper might be low but in real terms each one of the subscribers should really be greatful to you for recommending to stay on the sidelines.

    I did not listen to your advise of staying on the sidelines (on my personal account) and paid the ultimate price. My trading account equity has shrunk significantly during last 60 days. I will have to rebuild the trading capital over the next few months . once I have around XXK, I might join back your service. Thanks for your understanding.

    Cheers
    -sb, Singapore

    At OPNewsletter, I am gearing-up for an interesting 2009. Having gone through a 2008 that it was, there are lot of learnings that I look forward to capitalize as we are entering into 2009.

    Profitable Trading, OP

  • What’s next for US Markets and OPNewsletter (Jul +4.0%)

    US markets suffered big losses last week. The DOW was down 3.3%, S&P 500 was down nearly 2.5%, Nasdaq was down nearly 1.5 %. This was OPNewsletter’s first week since we opened our July’08 portfolio and including commissions OPN’s is up+4% and x-commission it is up +5.8% for the July expiration cycle. We opened 5 mini-portfolios and all are positive in spite of major market falls in the week that just passed. And guess what, we haven’t made any adjustments so far to any portfolio. Excluding normal income trades, I also shared directional bonus trades like GLD (+68% my returns, OPN subscribers have multiple points), POT (+50% mine), RTN (+25%) and GS (which was closed for -30% intraday). If you would like to subscribe to OPNewsletter, pls sign-up for the waitlist here.

    Dow was down nearly 3.8% for the week and it closed below 12K, a key psychological support point from a chartist perspective. It is not very far from the March Low. All the 30 Dow Components closed in red yesterday. And to add more pain, the downward move cam on above average volume. Earlier it had touched 200Days moving average but since then it has follows a pattern one week up, next down, another up, next down and that has been the case for the past 7weeks. Where is it headed, it tough to make that call. It may see a bounce next week. RSI is just about to touch the oversold level from daily perspective. However, if you take a weekly perspective, the story is different. RSI is not even close to oversold area, simply saying that there is room for further fall and 11,670 may work as an interim support while DOW work out it’s oversold region.

    Other things that you may want to check out is that “Number of new lows” on NYSE are rising (though slowly), Number of stocks above 50days moving average or 200Days moving average are also declining slowly. These are not good signs and one needs to be really careful while interpreting these.

    I think we are about to see a correction in commodities (x-oil, as Oil is now determined by several factors) and it may be possible that once June is out, we’ll see a retracement in Energy sector as a whole. I may be wrong here but the sense that I am getting for these sectors is of “Top Heavy”.  I am positioned for DBA and DBC bearish strategies. But I am quite flexible in cutting losses the moment I see a further surge in the commodities. And other contrary thought is that we are probably just a few months away in seeing turn around in financial as well as Banking sector as a whole. May be, November. There is amazing resilience in the Transports, specially Rails. Energy (Oil, Oil Services), Coal and Mining has been trending up and up.

    International markets are also falling apart. Since the start of the year, India is down significantly, China is down nearly 50%, Japan’s Nikkei is down and so is London’s FTSE. RBS just warned for a 300 points drop in S&P500 in next 3months.

    So here we are, at the crossroads again. What to do next? Attached is a “sector rotation” chart from “StockCharts“. They have pretty good charts that you may want to check out. I think value is slowly emerging in Banks and Financial sectors, Commodities may offer short term pull back opportunity, Inflation is riding high so I’ll hide in gold, trains and shipping industry are doing good but if goods are not going to move then why will they run so watch out for world trading activities via Baltic Dry Index and consumer spending. If corporate earnings are not going to go high, I don’t see a reason for Tech to win either. No matter who is the next US president, govt spending needs to take place and therefore defense may offer another stable opportunity. Home and construction-they need to fix their foundation first before we can think of any castle above that.

    Whatever you choose, be careful and be protected as much as possible. I can’t think of any suggestion if a black swan event happens, but yeah, try protecting your hard money in case markets move in either direction by a combination of calls and puts and/or by having a right assett allocation mix so one’s effect nullifies the other. Oh by the way, you may also choose to join OPNewsletter if you are looking for just 5-7% per month.

    Profitable trading, OP