OptionPundit

Tag: OPNewsletter

  • 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

  • A Terrible, and A Fantastic Week

    It was a terrible week for U.S. stocks and equally for almost every major stock markets worldwide. The Dow fell 157.47 points, or 1.5%, on Friday to close at 10,325.38, racking up a 7.3% drop for the week. The Nasdaq Composite Index fell 29.33 points, or 1.5%, on Friday to close at 1,947.39 and lost 10.8% for the week. The broader Standard & Poor’s 500 Index dropped 15.05 points, or 1.4%, on Friday, ending the day at 1,099.23. For the week, the index was down 9.4% for the week. But all this shouldn’t come as a major suprise to OPNewsletter subscribers especially those who were following this general market comments thread of OPN member’s only section. I also mentioned clearly that I wouldn’t trade for stock pinning for Sept expiration cycle. This is not a “praise myself” post, but to state clearly how we handled first hurrcane of the season, that has just passed.

    If I say this was the most volatile weeks since 1987 market crash, I think I wouldn’t be too far-off from reality. Too much of uncertainty, hopes and dreams surrounded the stock markets world-wide. Starting with the hope that bail-out package will be passed without issues; it was dashed to zero when markets were taken by surprise upon defeat of the bail-out plan, markets tanked on Monday, and the worst 1-day performance since 1987. Soon after there was revised hope that package will be passed and markets started to go back up, one of the best one day performances in past 5 years. Dow was up nearly 300points when bill was to be voted on Friday, I wrote to OPN subscribers at OP discussion forum to stay away from rally and also on my twitter account, that it might be “Buy in anticipation and Sell on news” event.

    For income trades, OPNewsletter stayed on the sidelines. We opened only one trade, a RUT iron condor that we officially closed for +9%, some might have had minor losses due to the fills that received during a very fast moving market that it was. For OPN, I invested only 8% of capital in that. Since I invest majority of my capital in income trades, I preferred and shared with OPN subscribers to stay in cash since mid September. Preservation of capital is of utmost importance to a trader or investor. Market environments were not such that I could leave the income trades on and not watch it. It required one to be nimble, closely monitor markets and always be “on”. Staying in cash proved to be a good strategy, we could sleep well while markets were gyrating.

    Though I had my own share of losses, it was a great week. Attached snapshot is just for few profitable trades. A fantastic week for those who played bearish on my fantastic fours (POT, MON, MOS and CF) as MOS missed the earnings and was punished by markets really ruthlessly. I also mentioned in the speculative sections of the forum when Apple (AAPL) was drowning below $100 watermarks due to rumors. I had been a net buyer of puts and sold some as market closed, but still in bearish position. WFC went down within minutes of S&P putting it on Credit Watch negative. It was a quick trade, generating +25% in less than 1hr time in a very volatile market environment. A bear call spread was also opened (37.5/35) Oct, which is also yielding +45% as of Friday close. Due to its highly speculative and directional nature I didn’t write on forum. Then was GE, VIX (+25%) and many more directional trades. Overall a great week for “directional/speculative” trader!

    Where are we now, as per my indicators, we are in for trouble ahead. But this is market which has defied several rules and indicators and therefore I would like to prepare for worst but hope for the best since most of the past major bull markets kicked-in during worst market sentiments.

    Preserve capital, stay cautious and be profitable,
    Profitable trading, OP

  • OPNewsletter (Aug’08) : +2.0% (Open)

    For the week ending Aug 01, OPNewsletter is up +2.0% including commissions and +4.0% x-comissions. Though this was a great week for 3 portfolios delivering double digit gains, it wasn’t so for our 4th portfolio that is down double digit and is dragging overall results with it. Albeit, We still have two weeks to go.

    You may find out about more about OPNewsletter here. We shall be shortly opening our Sept portfolio spots.

    There were couple of bonus trade alerts as well that delivered solid results including AMZN, POT and AAPL. I also shared a free trade idea, using covered call strategy. Simple returns were +6.6%, while those who can use portfolio margining, it was over 10% for holding only 1 day.

    Next week is an important one, FOMC announcement is scheduled on Tuesday (Aug 5). Markets have been holding pretty well (>11,000) for sometime. However, from a long term perspective, I think my earlier post still holds true. Also don’t forget to re-read how to survive this market.

    These times require very close attention. Trade Carefully.

    Profitable trading, OP

  • OPNewsletter (Aug’08) : +3.0% (Open)

    Another profitable week for OPNewsletter; both for income as well as speculative directional trades. Even though we increased out investment by 17% (to 48.3%) since last week, our returns also increased from +1.24% to +3.06% this week (including commissions). Considering what happened in the broader markets past week, I am pleased with these results. On a big picture basis, we didn’t make any significant adjustments to any of the portfolios since opening. No adjustment are expected for any portfolios till next week too.

    Other then income portfolio, all the directional trades also proved money maker with exception on ISRG intra-day. AMZN and AAPL both delivered > +20% for 1 day holding periods. POT 230 Put directional calendar is also profitable. In fact I shared a list of expected “Big Movers” that I was analyzing and POT, AMZN, WFR, AAPL, CMG, BIDU and many more moved huge %.

    Few testimonials from OPN current subscribers-

    I have been an OP Newsletter subscriber for about 3 months. I’ve been trading options for 2 years.

    I am extremely Happy with my subscription. I have taken most of OP’s suggested Income Strategy trades and they have been overwhelmingly profitable. The ones I did not take, due to travel or just plain second guessing, ultimately turned out to be profitable as well. LOL.
    Most of the spec trades that I’ve taken have been overwhelmingly profitable as well.

    OPN differs from other Newsletters in that OP provides timely, suggested adjustments for his Income Strategy recommendations. He, or other subscribers, are quick to answer my questions. This keeps you in the trade with an expert assisting you, and teaches you how to trade these strategies at the same time. In addition, I have found OP to be very responsive to questions as well as feedback.

    I’ll be happy to answer any questions you may have.
    Feel free to contact me at smrusso@aol.com.

    Sam Russo
    Boynton Beach, Florida

    Thank you for the vote of confidence Sam. It’s members like you who keeps the community growing and learning from each other.

    Hi OP,

    I find it hard to put into words the value of the service you (and the whole OP community) offer the individual retail trader and investor. In my opinion, this style of options trading is the only path to consistent and repeatable profitability. I also have not found another service that puts all of these strategies together the way that optionpundit.com does. It feels like a true group of friends and peers that are learning and growing together, not just someone taking our money and throwing out trade ideas. I sincerely appreciate the time and efforts you put into your service for your members, especially at the price you offer it for. True knowledge is priceless.

    Thanks Again,
    David Castello
    Ormond Beach, Florida

    Thank you David. I appreciate your feedback. I hope OPNewsletter continues to deliver rather exceed the expectation that members have from it.

    Another interesting learning happened while I was playing WFR earnings with a bullish perspective. I landed in the worst case i.e. Stocked gapped down hugely vs my expectations. To add to pain, I was also assigned on WFR 55s. Keep an eye on the blog posts for strategy concept and on the forum postings for specific trade with prices (OPN subscribers) where I shall share with you how I turned that worst case into a profitable trade.

    Profitable trading, OP

  • OPNewsletter (Aug’08) : +1.24% (Open)

    Quite a busy week but at the same time, promising one for the general markets. There was a good run on financial stocks and broader markets gained nicely. Next week will be the one to really judge whether or not these levels can withstand.

    From OPNewsletter‘s perspective, we have invested nearly 32% of our capital and we are sitting comfortably without making any adjustments to either portfolios. Usually we target 60% of the portfolio to invest. Albeit, if we don’t find any good opportunity, we stay away as “Capital protection has higher priority over missing potential opportunity”.

    We are up + 2.81% x-commissions and +1.24% including commissions. We however will open another at least two more portfolio sometime next week.

    When we are not making any adjustments, I suggest you read more. Browse the website and understand the concepts to prepare you better for a volatile markets. I had earlier suggested on how to survive this market.

    Though OPN Trades are OK even if you trade a little late (except in very volatile and wildly moving markets), If you think you don’t have time to stay in touch with your portfolios, stay away from real-money trading for a while. I strongly encourage doing it on papers only. There will always be time to make money and market is always there. It’s a tough market and you want to protect as much capital as possible while maximize learning from such time for if we survive this, normal markets will be easy walk.

    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