OptionPundit

Tag: Iron Condor

  • 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

  • A Straddle Strangle Swap on Berkshire

    This post will explain what’s a Straddle Strangle Swaps option trading strategy? And also share a trade idea on how to use this strategy on Berkshire Hathaway (BRK.B) to make some money while learning it as well.

    A Straddle Strangle Swaps (SSS) is the sale of a front-month Straddle and the purchase of a back-month Strangle. From the pictorial perspective, it looks like a simple Calendar Spread.

    (For beginners who are wondering what is a Straddle and Strangle- A straddle is long 1 call and long 1 put at the same strike price and expiration and on the same stock. For example, long 1 IBM Mar 120 call and long 1 IBM Mar 120 put ; and a Strangle is long 1 call at a higher strike and long 1 put at a lower strike in the same expiration and on the same stock. For example, long 1 IBM Mar 125 call and long 1 IBM Mar 105 put)

    Straddle Strangle Swap (SSS) is a Market-neutral, defined-risk position that profits from positive time decay (theta) as well as collecting credits from rolling short options forward. Most of the time it is a Theta Positive, Vega positive and Delta neutral. Albeit, depending upon IV skew it can be Vega negative; and as underlying moves higher/lower than the short strike, trade can convert into a directional trade thus delta positive and delta negative.

    [OPNewsletter has outperformed the broader market. Pls read customer reviews or If you would like to sign-up for OPNewsletter directly, pls click here to sign-up for the wait-list (as the subscription is by invitation only)].

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  • OPNewsletter (Oct’09) Up +9.5%

    88.7% capital invested, no major adjustment needed, all but one portfolios made money and closed, 1 portfolio still open (down -2.9%), OPNewsletter delivered +9.58% x -commissions and +7.8% including commissions. As good as it gets. We are starting to look out and analyze opportunities for November 2009 income portfolio. If you are not an OPNewsletter member and would like to join, pls sign-up for the waitlist here.

    These results don’t include returns from speculative trades i.e. bonus alerts.  I shared trade ideas on GOOG and GLD. While GOOG trade required adjustment as GOOG quickly bounced from 480s  (I didn’t close the trade), GLD trade is working excellent.

    Gold is decidedly above $1,000 while USD is continuing to weaken.  For the stock markets, while a debate is going on between the Bulls and Bears, there don’t seem to be a clear technical sign for any major top. Personally, I don’t belong to the Bulls camp but I am not short this market either.

    Looking forward to an action packed earning’s week. I am likely to play a few counters for earning related moves. Stay in touch.

    Profitable Trading, OP

  • OPNewsletter (Jul’09) + 2.64% (Open)

    DJI Market techincals Jun 28 09Overall an interesting week that it was, but I think there is more to come. On a weekly basis, it appears as if MACD and RSI are about to register sell signals. Mr. Market can go whichever direction it wants to, but hey, at the end of the day, this is all about probability. And as I interpret the current market data, the probability of markets going lower are higher vs probability of its rallying higher. Oh well, maybe that I am the only one still standing and claiming that it is bear market rally. The jury is still out there and soon we shall know what lies ahead as companies starts to announce earnings, and window dressing comes to a completion. Hedge funds who participated since March lows are up and probably have booked bonuses for the year.

    For overall OPNewsletter, we increased investment from 38.7% to 43.3% (for an assumed 10K capital). We are up +2.64% x-commissions and +0.68% including commissions. I usually aim for +60% capital deployment but overriding philosophy here is “preservation of capital is more important than missing a potential investment opportunity”. According to Lowry’s statistics, as I interpret, in spite of a very little change in the Friday close, the markets internals almost gave back whatever it gained during Thursday’s rally. It is a very interesting market; It is seems very different on the surface vs. what lies beneath.

    As I shared earlier, market internals are deteriorating day by day. I don’t know when will the tide turn upside down. If you have a long stock portfolio, you may want to erect defense lines while the IVs are lower and defense will be cheaper. For stocks, there is no harm in reducing the gains in order to protect and preserve capital. I’ll reinforce what I often say- Making money is not difficult, preserving it is.

    Let the week begin, there is more economic data this week

    Profitable Trading, OP

  • A Record Month OPN (Jun’09) up +14.7%

    June 2009 was a record month (2009) for OPNewsletter! Overall June’09 OPN is closed up +14.7% (x- brokerage commissions) and +12.1% (including commissions). We invested almost 60% of 10K assumed capital across various sectors and diversified strategies. All the portfolios were closed positively. Overall an excellent performance that was almost double the OPNewsletter objective of 5-7% per month.

    Here is an update by individual portfolio-

    • GDX was closed for +5.15%
    • UPS was closed for +8.9%
    • X was closed for +13.85%
    • RUT was closed for +23.08%
    • DIA was closed for +22.89%
    • IWM was closed for +26.07%

    This doesn’t include returns on speculative trades on POT, GDX and GMCR, MCO and AAPL (Pls read here on OP calculates it’s results)

    To Reinforce what I said last week, and I still believe in it-

    Believe it or not, market internals are deteriorating day by day and the surprising thing so far is that it is still holding very well. I have trimmed my personal stock holdings by almost half (as lot of those increased by almost 60-70% in a few weeks time). The only holdings where i still continue to hold (or rather increase on every pull back) is gold. But pls don’t follow it without full due diligence as gold trading is not for everyone.

    This time around, our strategy was slightly different vs. usual way of adjusting. We were short delta all throughout the month, expecting for a sharp correction which didn’t arrive but markets didn’t rally either and didn’t go beyond the expected upsides break-even. This was a well thought out technical as well as psychological analysis that helped determine what to expect and when to move. We were short delta and as soon as markets fell, our results improved.

    This was another record setting month for RUT Iron condor. Since re-opening OPNewsletter in Jan’09, OPN’s RUT Iron Condor never lost money and just one condor alone was more than enough to pay for the subscription.

    We have started to open Jul’09 income portfolios. If you would like to sign-up, pls click here to join waitlist.

    Profitable Trading, OP

  • OPNewsletter Jun’09 up 11.7% (Open), Jul’09 (Opening Soon)

    Another turbulent but positive week for the broader markets. I sent out a note to OPN Subscribers and Basic Members (Free, till dec’09) that don’t trust the sharp rally post employment numbers. The rally did disappeared.

    Overall OPNewsletter gained almost 3% this week, we did raise investment capital by a few percent behind some adjustments. Overall OPN is up +11.77% (x- brokerage commissions) and +9.27% (including commissions). We have invested almost 60% of 10K assumed capital across various sectors and diversified strategies. As of Friday closing we have 44.11% cash available that we can start employing for July’09 portfolios.

    • RUT Iron Condor was closed for +23%
    • GDX increased to +7.95%  from +2.27%
    • X portfolio increased to +12.37% from +10% last week
    • UPS increased to+6% from -2.33% last week
    • IWM portfolio decreased to +13.3% from 17.78% last week
    • DIA increased to +19.6% from +3.4% last week

    So far 100% winning record on RUT Iron Condor wins since I reopened OPNewsletter in Jan 2008. That is “Consistent Income” from option trading. The above returns doesn’t include returns on speculative trades on POT, GDX and GMCR.

    Though we are short delta, Theta and Vega are in our favor. Just one more down leg in the markets and our results will significantly sweeten by few more percentage points. But again, hope is not a strategy. Believe it or not, market internals are deteriorating day by day and the surprising thing so far is that it is still holding very well. I have been trimming my personal stock holdings as lot of those increased significantly over past few weeks. The only major holdings where I still continue to hold (or rather increase on every pull back) is gold. But pls don’t follow it without full due diligence as gold trading is not for everyone.

    If it walks like duck, if it quacks like duck, it might possibly be duck. The markets are showing symptoms of “Bear Market Rallies” so I shall count for higher probability on that. But as I always mention, be prepared for this rally as a “bull rally” too. Anything can happen and a true market participant is ready for both possibilities.

    Trade carefully, Trade profitably, OP