July Trading Results

Time again for my latest portfolio results, this time for the July 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.

Why?

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:


Portfolio Results

Iron Condors and Credit Spreads were a solid performer again this month. My trading was pretty light and I actually didn’t have a losing strategy which is a first for a while.  Staying disciplined and sticking to my core strategies I think has helped that.

July Option Trading Results

Important Events in July

July was another solid month which was nice to back up June’s positive result.  For the month I was +$4,190.15 for a return of +2.97%. During the same period, the S&P 500 moved from 1342.32 to 1376.51 for a return of +2.55%. For the year I am +8.58% versus +9.46% for the S&P 500.  I’m happy with my performance the last 2 months, and I’m definitely on track for my goal of 1-2% per month.

I managed to keep my number of trades low again this month with only 12, however, the 5 butterfly trades were hedges for my iron condor positions, so the real number was only 7.  I have avoided trading weekly options (other than hedging) and I think that has helped my performance as they were a significant drag at one point.

Butterfly trades had a bigger showing in my trades this month due to them being used as hedges for my iron condor positions.  The idea being that I would place a very cheap butterfly trade around 5% out of the money using weekly options.  These trades would profit from a big move which would offset some of the losses on my main iron condor positions.  When those weekly butterflys expired I would then roll to the next week.  I could choose to place a butterfly below and above the current market, or just on the side where I saw the risk.  This almost came unstuck at one point when the RUT rallied really hard, hurting my iron condor position, but SPX didn’t rally nearly as much.  As I used SPX for the weekly butterfly hedge my hedge didn’t work out as well as it could have.

On June 26th, I entered a 670-680 and 820-830 iron condor.  I was concerned about the upside risk, I wasn’t able to get very far away from the current market and the chances of a short term bounce were high.

RUT iron condor adjustment

I entered an SPX 1370 – 1380 – 1390 butterfly spread on the same day to hedge some of the upside risk.  The hedge cost $105 and I was able to close it out on July 2nd for a gain of $613 which definitely helped mitigate some of the heat I was taking on the call side of my iron condor.

SPX butterfly as hedge for iron condor

I think the hedge would have worked out even better if SPX had rallied to the same extent as RUT.  RUT was up 5.73% during the course of the butterfly trade, while SPX was only up 3.47%.  My adjustment on the iron condor allowed me to be profitable on that trade also which was a bonus.  I generally wouldn’t expect to profit on a hedge AND the position I’m hedging.  I’m sure it won’t happen like that too often.

 

July Trading Results

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Here’s to your ultimate success!

Leave A Reply (2 comments So Far)

  • Callbuyer

    When you hedge your condor with a fly how do you decide on the strikes? I guess if incorrectly chosen the market can blow right through your protection zone? If you are worried about that happening will you employ a different hedge? ie a bull call sprd?

    • http://www.optionstradingiq.com/ Options Trading IQ

      I tend to use them more on the call side where the market grinds higher rather having a big move. I look at how far of a move would start to hurt me on the condor and then go from there, I also look at the cost of the butterfly as I don’t want to spend too much on the hedge.

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