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Friday, September 1, 2017

Options Trading Monthly Digest (August, 2017)

Time to reflect Options trading results for the month of August. 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)

SPX - Aug 2260/2270/2520/2530 Unbalanced Iron Condor
Easy position to ride. Closed a couple of weeks before expiration for a $1,225 profit.


RUT/IWM - Aug 1290/1300/1490/1500/132/150 Unbalanced Elephant
Taken all the way to expiration. This Elephant never really gave us any headaches. Easy $1,418 win.


SPX - Sep 2300/2310/2550/2560 Unbalanced Iron Condor
Call side closed on August 11th after the first mini sell-off of the month. Put side was closed the last day of the month. In total, a $1,250 win.


RUT/IWM - Sep 1310/1320/133 Put side of Unbalanced Elephant
and
RUT - Sep 1475/1480 Credit Call spread (part of Unbalanced Elephant)
On August the 18th, the Russell 2000 index fell below 1,350, correcting more than 7% from its all-time highs. Unlike the SPX, RUT has been much weaker all year. This would have been the best month of the year if it wasn't for this loss. After 12 consecutive winning Elephants (4 in 2016 , plus 8 in 2017) I had to face the first Elephant loss.
Put side closed at a $2748 loss (mitigated by the long IWM Puts component).
Credit Call spread side closed for $570 gains.
Net-net, it was a $2,178 loss this day.
A new 1250/1240 Credit Put spread was deployed ($1,200 credit), that should be a winner by September expiration and will mitigate this Elephant loss to just around 1% of the portfolio.


RUT - Oct 1200/1190 Credit Put Spread
Opened during the August 10th mini sell-off in RUT. We had the first oversold condition of the year and it is crazy to think that it took until August to see it! The position was closed on August the 28th, to reduce the quadruple downside exposure in the portfolio. A small $500 gain.


Net gain of $2,215 for the month. $1,706 after commissions.
In percentage terms: a 1.53% growth for the whole account when commissions are factored in. 
It was not the outcome that I expected for the month, to be honest. I was expecting for the account to be up 14%-15% by this time. Unfortunately that Elephant loss took place. It was overdue. But regardless of winning and losing trades, I'm satisfied with the way I traded and all the decisions made throughout the month.


Year To Date balance per strategy
*Note 1: Commissions not included in the above table.
*Note 2: Elephant losing trade is likely to be mitigated via the September RUT 1250/1240 Credit Put spread.

The S&P closed the month up 10.40% for the year, whereas my performance at the end of August is +12.91%. Current positions looking healthy. No threats on the horizon.

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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