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Weekly Update on May’07 Income Trades – Portfolio up 14%

Published on May 4, 2007

Weekly Update on May’07 Income Trades – Portfolio up 14%

May 4, 2007

Though, I have already achieved my May’s portfolio return objectives (my monthly target is 5%-7% returns) there is enough room in these income trades and therefore I can still continue to hold. I don’t expect returns like March (> 30%) but there is still space to make it bigger than 14%.

June’07 income trades have already been opened and shared with OP Newsletter subscribers last week. You may join it for less than US$1/day i.e. US$28/month via paypal from the left sidebar.

Here is the 3rd weekly update on my income portfolio that I shared earlier. The original post can be found here and the previous week’s update and adjustments can be found here and here.

Here is an update on the income trades that I had opened for May expiration cycle. The returns are as of May 4 closing day.

  • Trade-1 RUT Iron Condor (750/760/860/870), Current profit = $110/$795, +13.83% (I closed the Put credit spread by buying it back for $0.20). Still open.
  • Trade-2 Dow Double Diagonal (closed put diagonal, left with call diagonal 50/55), Current profit =$22/$485, +4.5% (closed the call diagonal for zero cost). Closed.
  • Trade-3 SPY Iron Condor (1:1 risk reward), closed with loss =$43/$108, -39.8%. Closed.
  • Trade-3 OIH Variable calendars/diagonals Current profit =$335/$1625, +20.6%. Still open.
  • OIH since last week, adjustments made are (all these adjustments can be found here):
    1. Bot May/Jul 150 put calendar for 3.35 debit
    2. Rolled May/Jun 150 put for 1.65 credit
    3. Bot May/Jul 165 call for 4.90 debit
    4. Sold Jun/Jul 150 put for 1.40 credit
    5. Sold Jun/Oct 150 put for 3.90 credit
    6. Total investment change = 3.35-1.65+4.90-1.40-3.90=+1.30 vs last week, Total investment = 14.95+1.30=16.25 per spread

Overall gains/loss : $110+$22-$43+$335=$424

Total Investment/Margin = $795+$485+$108+$1625=$3013/ Portfolio spread

ROM : $424/$3013 per spread i.e. 14% on overall portfolio

The above results are excluding commisions (my commisions are very low and doesn’t affect results substaintially) and speculative intradays trades like SID, POT, ESRX, WFR, YHOO, etc. Even though gains are substantial, I don’t include those as that is not my key strategy and involves a very small part of my overall portfolio. Majority of my money is invested in income trades and almost in the same ratio as mentioned above.

Profitable trading, OptionPundit

5 Comments

  • […] Weekly Update on May’07 Income Trades – Portfolio up 14% […]

  • Avatar Rapheal says:

    Does your subscrption including the whole trading plan in terms of setup, trigger, adjustment and exit? Do you get the trade filled first and then send out the letter? If we want to follow, how do we do that?

  • Avatar OptionPundit says:

    Hi Rapheal,

    The subscription doesn’t include whole trading plan and is in no way to tell that as every individual might have own way of trading a perticular trade. It includes what price to buy/sell, risk/reward curve, understanding of Break-even points, and rationale for the trade.

    I send the details as soon as I find a good trade and I plan to open no more than 5 income trades in a trading month. The fill is dependent on each individual’s negotiation with the market maker. Some are good at it and therefore may get good price. If I wait for the fill, we may lose time.

    Follow-up can be done via two ways:
    Personal e-mail and 2nd via Forum where I am going to create a section for the paid subscribers only and we can discuss each trade in details for any question and clarifications.

    Hope this helps,
    Profitable trading, OptionPundit

  • Avatar Rapheal says:

    Hi,
    so you mean you will send us the trading plan first and let us negotiate the price with the market maker.
    What is the rationale for your income trade? It seems you use iron condor/double diagonal/credit spread for your income trade. Do you explain how you calculate the entry/exit price?
    Beginner

  • Avatar OptionPundit says:

    Dear Rapheal, each trade will have it’s own rationale. The primary reason is- 5-7% income per month. Yes, I use the trades you have mentioned above and there is no set entry or exit price. Enrty no becuase it depends how much one can bargain for, I do share my price and flex. Exit no, becuase it depends on the underlying position at the time of adjustment/closure.

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