Time again for my latest portfolio results, this time for the April expiration month. As always, I will break down the sources of my results so that you can keep track of how each strategy is doing. Beyond the actual numbers, this report is meant to give you an over-the-shoulder look into my trading and the lessons I’ve learned.
For several reasons:
1. To keep me headed in the right direction. Sure, I could keep this all to myself but sharing this information publicly helps to hold me accountable and continue to try and outdo myself.
2. I want to be honest and transparent. If anyone talks about making money trading options, I think that’s really the only way it should be. Wins, losses, successes and failures – the whole deal. Below there is a link to download and excel file containing all my trades, direct from my brokerage account.
3. I know it inspires a lot of people to take action.
You can access previous portfolio results via the links below:
Important Events in April
April was an ok month in that I made a profit, but I was pretty disappointed with one trade that really impacted my performance. I achieved a profit of $778.34 for a return of +0.56%. During the same period, the S&P 500 moved from 1403.88 to 1378.39 for a return of -1.82%, so at least I outperformed the market.
My number of trades increased in April and this may have been a reason for my poor performance. I made 17 trades this month as opposed to 7 in March.
I made some nice gains on the SPX and RUT monthly Iron Condors, but I gave a large chunk of that back with a poorly executed weekly Bull Put Spread on SPX. You can probably see from the comments on the chart below that my decision making was absolutely horrible:
- Firstly, the trade entry was not very good. The market was extremely overbought and I was trading a Bull Put spread very close to the market. My argument here was that the market was showing amazing strength and had recovered well from the small sell off. I was looking to make a quick in and out profit.
- I was trading on a very short time frame. The initial trade was expiring the next day so it left me very little room to move if the trade went against me, which it did. Looking through my past trades, I see that my decision making on these short term trades is not very good. I need to avoid the weekly options, or at least have a much better plan before trading these again.
- Allowing myself to get stopped out was a bit of a bonehead move. I was actually planning on rolling the spread down and out again, or just leaving it open considering I was almost at my max loss anyway. So I was stopped out and walked away only to see the market rally and my loss was about $1,000 greater than it could have been.
So, lesson learned – need to avoid weekly options, especially if there is only 1-2 days to expiry.
The other big impact on my performance this month was my hedging which cost me $484 (I have included this in the Iron Condor section below). I feel ok about this as volatility was very low throughout the course of the month and I felt I needed some protection in case we experienced a large sell off, particularly as the market was so overbought leading in to April.
Iron Condors and Credit Spreads were again the standout performer returning a gain of +$1,031.12 the rest of my trading was pretty light but I had some disappointing trades in Covered Calls and Ratio Spreads.
I started trading covered calls, cash secured puts, ratio spreads and butterflys again this month with varying success. I’m still finding it hard to just stick to my main strategies, which I really should do considering the consistent outperformance each month.
I appreciate you taking the time to stop by and read my articles and results. If you have any questions, please email me at firstname.lastname@example.org.
Also, if you missed the webinar last week, you can access it here – 6 Ideas for Profiting With Options in 2012
Here’s to your ultimate success!