OptionPundit

Tag: Iron Condor

  • Panic Before Everyone Else Does

    I have tried my best to warn OP readers of the upcoming storm, over and over again starting from November 2007. Fun fact, this is what I wrote then-

    But hey, if you do get a bearish market, then don’t forget to mention that you were told first hand here at OptionPundit.

    We are close to disastrous situation, Yesterday markets closed almost in the range that I highlighted in Nov 18 post. Net, here we are with a bear market signal. Very close to some extremely strong support areas 7,000-7,400 for a bull market that started from 1930s to 2007. I shall caution to stay away for a while till Mr. market make-up his mind.

    I warned in Mid Sept’08, and OPNewsletter stayed away for Oct’08 portfolios, preserved capital by allocating almost 1/3rd of capital only and been reinvesting since then. Though results are not that spectacular, but nevertheless it is an outperformance in the face of tough Market that we are facing. We have opened 2 portfolios for Mar’09 yesterday and will soon be opening more. If you are interested in joining, pls click to know more about OPNewletter.

    Hope you are on InvesCafe, this is the place I use for short updates for intraday trading opportunity. Just yesterday alone, I shared 3 intraday opportunities (VIX, HPQ and AAPL) all three registering good gains. It’s a great tool and I have been using it for while. Check this out for how many profitable alerts I shared over past few days. I shall encourage you to sign-up and start using it, it’s wonderful tool. All my InvesCafe updated are posted to Twitter automatically as well.

    Today is US Equity option expiration day, and also CPI data will be released at 8:30 US EST. Expect the volatility exacerbated by already <7,500 level. Stock pinning, cheap options and lot more to trade, but trade carefully.

    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

  • OPNewsletter (Jan’09) +8.17% x-commissions

    This was another positive month for the OPNewsletter Income portfolio. On the invested capital, OPN delivered a total +8.17% excluding brokerage commissions and +5.39% including commissions.

    As part of on-going pre-caution, OPN’s Jan portfolio consisted of 3 income portfolios and all 3 were positive. Highlight of the results was Iron Condor Income portfolio that delivered +14.2% gains and was another successive winning streak. In spite of extreme unfavorable conditions in 2008, not even a single OPN RUT Iron Condor lost money last year.

    I am about to open the Feb’09 income portfolios, should you be interested in joining, pls find what is OPNewsletter here.

    Profitable Trading, OP

  • OPNewsletter Portfolio up +37.5% in 2008

    Year 2008 was almost equally as good a year for OPNewsletter as 2007 especially when compared with any major benchmark index like S&P 500. In 11 months completion, from Feb’08 till Dec’08, OPNewsletter outperformed S&P500 by a wide app 70% margin.

    OPNewsletter Performance 2008

    During the year when the DJIA decline 33.84%, while the S&P 500 trimmed 38.49%, the NASDAQ lost 40.54% and Russell 2000 lost over 35%, OPNewsletter went up by +48.2% excluding brokerage commissions and +37.5% including retail brokerage commissions (my commissions are even lower than commissions I am assuming in the calculations). If however, I calculate the way usually option trading newsletter calculates (returns/amount invested), then OPN returns are +144% but we know, we don’t invest money that way. What really matters is the gain on overall capital.

    These results does NOT even include returns from bonus trades (earning play, momentum plays, almost risk free trades, swing trades, intra-day plays, etc.) where the success hit rate was over 80% (I didn’t spend time in counting too many bonus trades for past 11months, it is based on just the snapshot on the forum alone) and gains far outperforming losses.

    Here is a snapshot of the returns, portfolio capital invested and thus effective returns and compounding effect of OPNewsletter results.

    Except for the month of Aug’08, OPNewsletter has been positive every month. If you notice, very little capital was invested in the month of Oct’08 (expiration) and that was the month that most traders and investors alike want to forget. I warned OPNewsletter subscribers about the upcoming severity of the bears and we were on sidelines watching the show. We have been investing cautiously since then and only increased capital now for Jan’09 portfolios, that too only 30% so far. The maximum portfolio capital used was 84.3% for the May’08 expiration round.

    During this period, we opened several type of income spread including Iron Condors, Diagonal spread, Double diagonals, calendars, double calendars, credit spread, debit spreads, covered calls, Straight calls and puts and even purchased stocks where buying options was not making good sense.

    There are a lot of learnings that together with subscribers we have learned in the past year and things improves, we should be able to capitalize on those.

    Pls click here to read what do OPN subscriber think and browse OPNewsletter should you choose to join the OPN community.

    Going ahead looking for 3rd consecutive year of out-performance.

    Profitable Trading, OP

  • OPNewsletter Returns +6.2% in Sept’08

    In what could be summarized as tumultuous month for the US markets, full of volatility and extreme intradays moves and strong reversals, OPNewsletter Sept portfolios returned +6.2% including commissions. This beats my revised target of 5% including comissions (vs earlier 5-7% x-comissions). This surely wasn’t an easy month for an income trader but a portfolio approach and diversification helped me achieve positive results. I used up a max of 53% of overall capital during month and opened 5 portfolios-

    • GLD -16.67%
    • SPY barely break-even at +0.6%
    • EWZ +5.3%
    • DIA +23.57%
    • RUT +28.64%

    These doesn’t include directional alerts that I sent to OPNewsletter members (DBC +30% and GS +12%, and bearish alerts on POT, CF, MOS and MON). These were not part of OPN and hence these are not counted in the OPNewsletter tracking. And yeah, we have one for LEH as well, results of which we’ll come to know on Monday.

    We are in the process of Opening October portfolio as well as new openings for sign-ups. If you would like to join OPNewsletter, pls sign-up for the waitlist by clicking at “Buy Now” button on the rightmost siderbar at the top corner. If you would like to read subscriber’s testimonials, pls feel free to read here.

    Have fun and profitable trading, OP

  • OPNewsletter (Jul 2008) : Closed +7.1%

    This was not an easy month. In fact a very tough month. I mentioned to subscribers that this was the worst June for Dow in nearly 70 years and If we gain this month, or rather even break-even including our commission, at least, I will consider this a cause for celebration.

    For me, preserving capital overrides almost every other investing theme. OPN not only delivered the break-even, but also delivered the upper range of it’s own target (5-7%/monthly). OPNewsletter closed at +7.1% for Jul’08 expiration trades. The result includes commissions and doesn’t include bonus trades.

    This was not a good month particularly for plain Iron Condors and huge intra-days moves required adjustments and staying close to the market. Those who couldn’t follow same plan as OPN mentioned, may not have achieved same results in this a volatile market. Triple digit moves for Dow were a common sight.

    Overall we spent only 50% of our capital this month as I couldn’t find any better opportunities and what worked in our favor this month was the right “Asset Allocation”. Thus preserving cash was more important than missing opportunities. With this cash and oversold markets, we may place some directional strategies for Aug’08 cycle.

    There are a few posts I would encourage you to re-read as Markets are at a very delicate point. I am watching closely and shall share with the subscribers as key indicators provides some hints. Albeit, it’s going to be very tough and rough time.

    1. Where are we heading?
    2. and 7 ways to survive this market

    Profitable trading, OP