OptionPundit

Tag: portfolio trading

  • OPNewsletter (Jul’09) +3.55%

    Last week markets tried very hard to rally but ended in negative territory. Market’s character can now be defined by more of “withdrawal of demand” vs anything else. For overall OPNewsletter, we have invested 38.7% of assumed 10K capital. As of last Friday close, we are up +3.55% x-commissions and +2.2% including commissions. I usually aim for +60% capital deployment but overriding philosophy here is “preservation of capital is more important that missing a potential investment opportunity”.

    As of Friday closing, here is an update on OPN portfolios-

    • IWM is down -0.47%
    • X is up +4.50%
    • GDX is up +5.13%
    • DIA is up +5.26%

    This doesn’t include returns on speculative trades of either VIX or RIMM.

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

    If you would like to sign-up for the OPNewsletter, pls click here to reserve your place. Or if you would to read what other customers think, pls click here to read subscriber’s testimonials.

    Profitable Trading, OP

    (This post is 2 days old, original post was published on the forum for OPN Members)

  • OPNewsletter (Outperformance)- May’09 +6.1%

    Option Trading is equally useful to retail traders and can generate consistent income if used properly. Hope you enjoyed the free trade alerts for some earnings play (You may sign-up for the Basic membership that is free till Dec 2009)

    A Fantastic week for OPNewsletter! We played HAL, IBM, UPS and AMZN for earnings and all these one day players nicely added value to the portfolio. We chose to close HAL and AMZN and to keep IBM and UPS for further gains. These were special circumstantial opportunities and we took full advantage without having to worry which direction stocks will move post earnings.

    After many months of waiting, we crossed our 60% portfolio investment guideline. Maximum investment incurred was +64.4% and we shall continue to use that as basis for returns calculation even though we are now in credit generation phase. We have 42.5% in cash (assuming 10 k portfolio). The capital preservation strategy worked nicely. We moved out of markets in early when OPN subscribers were clearly warned of the upcoming market meltdown when I shared the need to stay away should Dow slips below 10,697. That was on Sept 15th, well in advance before the real disaster struck. As I always say, if you know how to preserve trading capital, you can always make it back to market. At OPNewsletter, Capital preservation is always a higher priority than missing a potential investment opportunity.

    Net, overall OPNewsletter is up +8.62% (x- brokerage commissions) and +6.13% (including commissions). We are nicely positioned to reap further gains and we still have 3 weeks to go for May expiration. I don’t have to worry so much about the market fall as that will further benefit our portfolios.

    • USO is down -1.34%
    • UPS is up +3.67%
    • IWM is up +6.08%
    • GDX is up +8.46%
    • X is up +13.01%
    • IBM is up +19.88%
    • HAL was closed for +22.69% and
    • AMZN was closed for +15.83%

    (If you would like to join for “No Profit, No Fee” OPNewsletter, pls click here to sign-up for the waitlist)

    We have reached our investment capital deployment goal for the month and I am not planning to add any more investment capital unless there are opportunity that I don’t want to miss at all. I am not expecting any major adjustments except in IWM if markets make strong move up. The probability favors downside.

    Looking forward to 16th positive month for OPNewsletter.

    Profitable Trading, OP

  • OPNewsletter- Mar’09 +8.8%, Apr +2.4% (Open)

    March’09 portfolios were closed +8.8% (excluding commissions) and +5.6% (including commissions). I used up about +46.7% of the assumed 10K capital for OPNewsletter. This result doesn’t include excellent results from bonus trade alerts.

    market-movement-mar09-opn-portfolio When compared with broader markets, this was probably one of the best months for OPNewsletter. Look at the major market movements since we opened the Mar (Mid Feb’09) portfolio. RUT traveled almost -20% south; and DOW, S&P500 and Nasdaq ranging from -14% to -16%. All this was followed by sharp snap back rallies. Isn’t this amazing, almost 20% back and forth move in one month. I have not researched to find if this is one of its kinds or has happened before. But whatever be case, this is not income trader’s best friend. This was surely not an easy period. In fact one of the toughest and most volatile periods, at least of my lifetime (leaving aside Oct 1987 crash). Hence preserving capital and delivering just positive results itself is good enough. One of the strategy I used was to focus only what was opened and keep cash free to make adjustments as needed. This served nicely without really triggering panic due to shortage of capital. For Option Trading Strategies, We used multiple strategies i.e. Calendars, Credit Spreads, Digonal Spreads and so on. I however, decided not to open an Iron Condor this month anticipating extreme movements which also served nicely (There is not a single losing Iron Condor since re-opening of OPNewsletter).

    For OPNewsletter, The best performing portfolio was USO which delivered +22.8% and it was also rolled over to Apr. I expect this portfolio to deliver +50% by July. The worst portfolio was ABT which was almost break-even (+0.89%). MCD delivered +5.5%. A tough month though, it required greek’s analysis, technical analysis, gut feel and past experiences with similar situation (VISA, May 2008) helped sail through this month.

    Some of the excellent intraday trades, results not included in OPN tracking, were +42% on SRS, +58% on VIX, CF arbitrage of $6, DECK for +220%, AZO (+27%, +39%, +73%), SKF +20% to +50%, FDS lost to break-even, NKE earnings +22%, DELL earnings amongst others. As mentioned, These results are not part of OPN tracking.

    We are nicely positioned for Apr’09 portfolios as well and so far invested only +19.7% of assumed 10K capital. I shall be opening a few more portfolios next week, if you would like to join, pls sign-up for the OPN waitlist.

    Those who could trade intra-day, markets offered wonderful trading opportunities, specially on the Expiration day. A smiling butterfly was shared with all the free members as well, that resulted into >+100% gains. Hope folks who followed invescafe/speculative trade alerts (some of those listed above), probably had some good opportunities that I played for intraday trades.

    (You may want to sign-up for the Basic Membership (Free until Dec 2009) that I use to share free trade alerts for registered members).

    I have been experimenting with several underlying/strategy combos over past 3-4 months, with real money. I think I am ready for opening new Portfolios/newsletter(s) to take advantage from current environment. I shall share more on this later.

    One final message, markets are not out of woods yet, pls don’t let complacency set-in, these are extraordinary time and it requires one to be taking extraordinary steps.

    Trade Carefully, Trade Profitably, 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

  • 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 (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