OptionPundit

Tag: income spreads

  • Outperformance Continues at OPNewsletter

    When compared with broader markets, Feb was an excellent month for OPNewsletter coupled with a few good learnings (kinda reinforcement, been there done that, but forget that). Overall, OPNewsletter for Feb closed up +5.6% x-commissions and +2.6% including commissions. Capital preservtion and thus allocation was higher priority vs missing an opportunity.

    These results doesn’t include the speculative directional trade which were shared here (only OPN subscribers can see this thread) and here at my profile on InvesCafe (Free) which includes likes of RIMM +40%, V +7.8%, BIDU +5.2%, BAC +10% to +40%, ESI + 33%, SRS, STT, WHR, BTU, AXP, CAT, ISRG, BLK and many more. I opened multiple positions where some won some lost (due to inability to fill on time as I was away and didn’t want to autotrade). Hardly any of those missed the expectations except the VXX which I intentionally closed.

    Above all, this doesn’t include future opportunities via capital preservation due to early warnings. Hope you have been reading OptionPundit and thus were aware of the Bear Market Signal that was reconfirmed recently. And of course, at least one assett class probably would have been shining in your diversified portfolio.

    I have already started investing for March’09 portfolios. if you would to sign-up, pls click here.

    Cheers and profitable trading, OP

  • Outperformance : OPNewsletter Feb’09 +5.85%(Open)

    An excellent month for OPNewsletter so far. Overall, OPNewsletter is up +8.87% x-commissions and +5.85% including commissions. We didn’t have to make any major adjustments to our portfolios except one which rolled partially to next month. We closed one portfolio for +17.17% gains and except any major disastrous events on Tuesday market open, remainder portfolios stands to gain good theta decay over the long weekend. This is what OPN wants, portfolios to be as boring as possible. We didn’t get fills on two income portfolios else results would have been even stronger.

    These results doesn’t include the speculative directional trade which were shared here (only OPN subscribers can see this thread) and here at my profile on InvesCafe (Free) which includes likes of RIMM +40%, V +7.8%, BIDU +5.2%, BAC +10% to +40%, ESI + 33%, SRS, STT, WHR, BTU, AXP, CAT, ISRG, BLK and many more. I opened multiple positions where some won some lost (due to inability to fill ontime as I was away and didn’t want to autotrade). Hardly any of those missed the expectations except the VXX which I intentionally closed.

    Other highlights includes my warning on Friday when markets were going higher in anticipation of stimulus package which proved right. Not that I have crystal ball, but it’s an experience I have been observing in the events of past few years.

    Overall an excellent month except that we didn’t invest a lot of capital for income spreads (only a max of 26.5%), but as I mentioned earlier, capital preservation is higher importance than missing a potential opportunity, especially in markets like current ones. We may always make more money if we have trading capital preserved. Once trading capital is lost, we can’t benefit from any opportunity even if it is as sure as that sunrise.

    I shall be looking for March’09 portfolios. if you would to sign-up, pls click here.

    Cheers and profitable trading, OP

  • OPNewsletter (Feb’09) : +2.78% (X-commissions) and +0.1% (/w Comissions)

    Such is the bear market, it leaves no one. Those who thought that major price indexes had successfully tested the Nov’08 market lows and that move December onwards marked a new primary bull market, were taken by surprise and Jan closed on a negative note. Dow closing almost 9% down for the month and other indices almost in the same range. I have been saying this since Nov’07 and will repeat here again “In bear markets the winner is the one who loses the least” (it’s not my quote, I borrowed it from the net and don’t know who said this, but whoever did concluded it at best)..so stay very close. I also mentioned about the importance of 7,500 break for Dow that if that’s gone, just stay clear.

    Here we are, our OPNewsletter portfolio are at break even after commissions in its 1st week of opening in spite of a weak market. Saying it another way- +2.78% excluding commissions and +0.1% after commissions.This doesn’t include bonus trades like CAT and ISRG which I shared via real-time alert on InvesCafe, and entry/exit on OPN forum. I closed CAT directional trade for +25.5% and ISRG for +46.6%.

    We have invested 24.27% of capital. This is also a month I didn’t open a RUT iron condor as risk/reward wasn’t good.

    Trade carefully, trade profitably, OP

  • Futures are Pointing Higer Opening

    There are a lot of positive news in the market, for a change. Some of the companies have announced good results. FDIC starting a “bad bank” concept and FOMC meeting announcement at 2:15pm. There is nothing much fed is left with from the interest rates perspective, but Uncle Ben may have some more tricks.

    Y’day volume was thin, and internals were ok. I would consider action so far as bouncing from the oversold region. But I am ready for any “new development” as well. The markets need to clear upper edge of the minor resistance which appears to have formed over the last few days. For the DJIA, the upper edge of the resistance is near 8250, while the equivalent level is near 855 for the S&P 500 and 1515 for the NASDAQ. A move above these levels may be viewed as a breakout but volume is the key. So watch out for the volumes together with any move to avoid any bull traps.

    So far we have hatrick on earnings (2 shared as bonus trades in speculative section, 1 shared as Income portfolio) for OPNewsletter (AXP, BTU and GD). So far so good, we have invested nearly 20% of capital and have cash available for more opportunities.

    Trade carefully and as much possible, delay decision of going long at least by one day.

    Cheers and profitable Trading, OP

  • OPN Subscribers’ Views: Part-4

    Thank you dear subscribers for your encouraging feedback. I published earlier OPN testimonials here (Part-1, Part-2 and Part-3). Your feedback especially after past two challenging month is rather much more important than it was when it was rather smoother sailing for OPNewsletter.

    Let starts with Wayne Hom from USA-

    The best thing about OP is that he puts his money where his mouth is. You know the guy is in it with you so he’s not some “sideline” know-it all without the accountability of feeling the pain. He’s making the trades and adjustments with you. I have seen newsletters and services where they put out the initial entry, give you the criteria for loss/profit exit, and then call it a day. You have no idea what their real rate of return is because they enter and exit at some “theoretical” point similar to back-testing approaches. It doesn’t consider the real emotions of trading, and the real issues most of us face of having day jobs. OP keeps the “official” book on the adjustments and closes, but he extends his hands out to help those of us who have “missed” the adjustment or close by a day or several days due to the constraints of real life. That is invaluable.

    I guess I would summarize by saying that OP is like a trading simulator simulating all the aspects of trading not just the identification of a trade and entry. You can follow along in real-time and ask questions and see what others are saying as the trades unfold. It doesn’t hurt that most of the times we make money in the process. And when those times occur when the trade goes against us, OP does his best to correct either this trade or offset in another trade so that we, including himself, come out ok. Most of the time, he pulls it off (though it still scares the heck out of me).

    Wayne Hom
    San Mateo, CA USA
    5 years of study, but only about 1 year of real trading

    Thanks Wayne. I am thankful for your feedback. Last two months were not easy. In fact one of the most difficult months during the life span of OPN and we managed to sail through it. Nice stress test for our strategies.

    I have been a regular visitor and an early forum member but joined the OPN only in April.
    I still consider myself an Options newbie as before joining OPN i was just using Straight Calls or Straight Puts based on my directional Analysis.

    If i were to summarise my experience with OPN in 3 words i would say : Transparency , Community and Learning

    Transparency : Complete openness about the Tracking. In fact the decision to take members fills accentuate the Transparency aspect and really appreciate you for that .Also, in many cases i can see OP assisting members who may be late for a fill as to what could be the best way/time to get the fills on different strikes.

    Community : I enjoy the Community experience a lot. The discussion on Fills brings a sense of friendly competition, the sharing of sentiments when PBR,Visa were going all over the place..all makes one feel a part of Community.

    Learning : These 2 months have made me read up a lot on Iron Condor, Calendar Spreads, Effect of Volatility..and i realize reading is one thing and trading and experiencing the things u read about is a totally different thing. I am glad that i used OPN as a first platform for Income Trading.It also makes me realize a few things about myself e.g, As a directional Trader why i made losses and how could i have avoided some of those losses…

    All in all ,i know these are just my initial baby steps in the world of Options, I look upon OPN as a long term continuous learning source…as i have miles to go before i sleep………….:)

    Name : Ajay Sunder
    Country : Singapore
    Investment Experience : Option newbie..less than one year Options Trading experience.Before joining OPN was limited to buying Straight Calls/Puts based on directional Analysis.

    Thanks Ajay. Looking forward to long association and being successful together.

    Nothing much has changed from my first thoughts. Few additional thing I learned since then are:

    1. Negotiate on prices when putting the trades.
    2. Better understanding on Pinning.
    3. Different ways of adjusting a trade
    4. Book recommended by you on Volatility was excellent.

    Further, making us think on catastrophe in the world and Mother’s day.
    Varun Balendra, USA

    Thanks Varun. I strongly believe that no matter what we do, we should give some time/resources to the society we live in and the companions, friends and families are what makes the life fulfilling. The success, without the success of those who matters, is not tasty.

    I like the consistency in monthly profits from your your service. Capital preservation is very important in investing and this service seeks to do that making sure that our hard earned money is preserved at all costs. Keep up the good work and the great consistency in making money month after month.

    Thanks again.
    Chik
    Singapore and investment experience 5 years.

    Thanks Chik. Yes, we are driving for consistent monthly income. And that’s why we don’t speculate and we don’t over allocate our hard earned capital.

    Thank you all. I shall remaining feedbacks later.

    Profitable trading, OP