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Monday, April 3, 2017

Options Trading Monthly Digest (March 2017)

Time to reflect Options trading results for the month of March. This update includes positions that were closed throughout the month and the Year To Date balances of each Options Trading Strategy.

Hopefully these monthly updates will provide readers with confidence and serve as an authentic guide of what can be achieved with a realistic and sustainable approach to the business of Selling Options.

It's important to realize that we don't need to double our accounts every year, which entails unsustainable risks. Relatively small portfolios can consistently generate $400, $500, $600 a month, which is meaningful help in the budget of the average family. Whether you want to trade for a living or only as a side activity for supplemental income, you are only truly limited by your own will. How much are you willing to dedicate to studying and training hard? That's all there is to it. And while there is absolutely no guarantee that anyone will achieve any arbitrary numerical return in the future, the fact is: the power of compounding is truly remarkable and can do wonders even with small amounts of money.



Positions that were closed
(Each position links to the article where both entry and exit are discussed)

First these two in the same group:
SPX - Mar. Credit Call Spread 2400/2410
SPX - Mar. Long Calls 2400
This maneuver represented the closing of the Call side of an adjusted Iron Condor.
2400/2410 was the actual adjustment, to which eventually long SPX 2400 Calls were added as a hedge to be able to delay the need for another adjustment. Unfortunately, the threat materialized and the CCS was closed taking a $4,350 loss, while the long 2400 Calls provided a $1,920 gain that mitigated the damage. Net loss of $2,430 in the end. That hurt, and is leading me to seriously consider never defending a Call side again, but just taking an early small loss instead as suggested in this Trading Estimations exercise. Adjusting the Call side once is fine. Once you have to defend it for a second time, that loss starts to hurt.
The same day these two were closed, a new May 2520/2530 position was sold for new credit. I went really far out perhaps out of frustration.


SPX - May. Credit Call Spread 2520/2530
Closed in just 8 days for a $750 gain 


SPX - Mar. Credit Put Spread 2090/2100  
SPY - Mar. 214 Long Put
These two represented the Put side of the March Iron Condor, which was initiated with a downside hedge due to the extremely low VIX. Both were taken all the way to expiration, providing a $1200 gain and a $126 loss respectively, for a net positive balance of $1074 that day.


RUT/IWM - Mar. 1235/1245/1450/1460/127/146  Unbalanced Elephant
Position held for 31 days and closed 11 days before expiration. A $1,210 gain obtained that represented 82% of the maximum potential gain. I started experimenting with Elephants last year and still haven't had a single losing position with them. This is the fifth winner counting all three from late last year. Liking them more and more.


SPX - Apr. Credit Call Spread 2455/2460   
Exited prematurely for a small $240 gain early in the month. Up until then the market had been an unstoppable train since the Trump election. After reaching 21 deltas and feeling some pressure here, I decided to, well, chicken out at the first market sign of weakness. Should have left it on. I've been wanting to redeploy it all month but never really had a good opportunity.


Net gain of $844 for the month. Only $451 after commissions.
In percentage terms: a small 0.44% growth for the whole account when commissions are factored in.


Year To Date balance per strategy

March was a pretty quiet month overall allowing the deployment of healthy April positions. Chances are good that we'll see a 2+ percentage growth by the end of April, but, as usual, only time will tell.

The S&P closed the month up 5.53% for the year, whereas my performance is now +3.42% options trading wise. The markets just don't go straight up forever and March proved that. Still, a 5.53% performance for a 3-month period is strong for the index, pointing to more than 20% by year end. It is logical to think this space is not sustainable, even with the slow-down seen in March. 

Thanks for reading.
Cheers,
LT

If you are interested in a responsible and sustainable way of trading options for consistent income and a smooth equity curve, consider acquiring LTOptions, my options trading system to the last detail.




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