Time again for my latest portfolio results, this time for the January expiration month. As always, I will break down the sources of my portfolio 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.
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 January
January was pretty much a straight shoot higher for the markets with the S&P 500 advancing from 1,257.60 on December 30th to 1,312.41 on January 31st for a gain of 4.36%. My trading results for the month were disappointing even though I managed to eek out a small gain. In total I made $627.05 or 0.47% during January expiration with a success rate of 80.0%.
I tried a few new things in January and unfortunately the results were not very good I had moved to a slightly bullish bias and as such added 2 diagonal call spreads to my portfolio. However, they did not work our well and I traded them very poorly. I also added double diagonal spreads as a means of getting long volatility and hedging some of my Vega risk from my Iron Condors. Again, this did not work out well and my trading decisions were disappointing.
As usual, my iron condors and credit spreads performed very well, but the new strategies almost totally offset these gains. So, what went wrong?
Firstly, with the losing SPY bear call spread, I traded weekly options which I tend not to do and I was a lot more aggressive, placing my strikes much closer than I normally would. Then when the markets gapped up on the first trading day of the year, my stop loss point was hit straight away and I had to get out. I’m not against trading weekly options, but I will think twice before doing this again and will definitely be a bit more conservative next time. The other thing I did wrong was trading against the trend. For short-term trades like this I should be riding the trend.
For the diagonal call spread on TGT, I decided to enter a directional trade that was also long volatility as TGT implied volatility was at a 52 week low. However, I broke a few of my trading rules. I tend not to trade individual stocks, I forgot to check TGT’s earnings date before entering the trade and I didn’t cut my losses soon enough. I should have been out of this trade on Jan 4th when my stop loss was hit and the 200d moving average was breached. Then, after staying in the trade too long, I too my losses at almost the exact low point which was just a complete rookie error and panic reaction to the selling after a bad earnings report. All in all a horrible trade.
The QQQ double diagonal was an interesting one and I was only showing small losses about 3-4 before I closed it out. I was bearish and was thinking the market would fall back and I would end up in profit on this one. So again, I held on to a losing trade too long and did not follow my rules. Another horrible trade.
Full results are shown below broken out by strategy, losing trades are shown in red. Current open trades are ones with a balance shown in the Quantity column.
Thanks so much for your support during the year, 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.
Here’s to your ultimate success!