October Portfolio Results

Iron Condor Trading Results
Time again for my latest portfolio results, this time for the October 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. It also serves as a accountability journal, in that I know I have to stick to my trading plan with all my readers checking up on me! As a result, I’ll be less likely to ignore my rules or make flippant trades. You can access previous portfolio results via the links below:

Important Events in October

As stated in my August and September results, I decided to remove the Cash Secured Puts strategy from my trading for the foreseeable future. With the market taking a bearish turn, this strategy is no longer appropriate and in any case it tended to be a drag on my performance each month. As a result, I am now only using around 30% or less of my available capital, but I’m ok with that in this turbulent environment. The similarities of this market to the 2008 top are uncanny, although that does not mean that the end result will be the same. The overriding thesis to my trading at the moment is the fact that we are below the 200 day moving average. If you look back over the last few years, you will see the relevance of this line. I can’t get overly bullish until we test, retrace and break above this level, and as such my bias is slightly bearish. My trading is centered around non-directional strategies, particularly iron condors, but I am always aware of the bigger picture when placing any new trades.

The S&P500 is slightly higher than it was for September expiration in spite of the volatility. Overall for the month my trading was very good. In total I made $3,430.15 during the October expiration period. For the year I am +$15,488.93 or +13.36%. My stated aim for yearly returns is between 12-24% so I am right on track to finish in about the middle of that range which is great.

Portfolio Results

CREDIT SPREADS, IRON CONDORS AND NAKED TRADES

Of the trades that expired in October, I actually only had 1 loser which was CLF. I kind of broke my trading rules here by trading an individual stock (oops…), but with this trade, there was a great bullish engulfing candle on October 4th (see green arrows below). I sold a Bull Put spread, then thought I would turn it into an Iron Condor in order to try and increase my return (there would also be no increase in margin requirement for adding a Bear Call Spread). So, I got a little greedy trying to eek an extra 100 odd bucks out of a trade I shouldn’t have been in in the first place. At one point the trade was in profit of about $100 and I probably should have just closed it then. But, my stop loss ended up getting hit and I learnt my lesson. I will be aiming to stick to my plan going forward of avoiding individual stocks and sticking to index and sector ETF’s.

OIH (credit spread 1) was a good trade, my entry points and shown below as well as the strike prices of the spread. I entered 8 contracts at the first green arrow and added another 4 contracts between Oct 3rd and 4th. The trade was looking a bit shaking early on the 4th and if OIH had dropped much more I would have had to roll the strikes lower, but then the markets reversed and it was an easy ride into expiration from there. :)

Credit Spread 3 and Iron Condor 4 are currently open and were showing a small loss as of Friday, but with the selloff today, these are back into profit and looking ok right now. The RUT Iron Condor 3 is also open and looking good at the moment.

Here is a summary of this strategy:

Made a total of $3,765.83
66.67% success rate (6 out of 9)

DIRECTIONAL AND DAY TRADING

Pretty quiet month for this strategy, 2 trades made up the bulk of these losses. FXA was a directional play on the Australian dollar. It was looking overbought, coming up against the trendline and also the 200 day moving average. The trade didn’t work out and I ended up cutting my losses once it broke above the trendline and 200. The SPY 30 puts are just what I like to call a “Financial Armageddon” hedge, and they also serve to reduce my margin requirements on an Bull Call Spreads, so I’m not too bothered about the losses here.

Lost a total of $335.68
40.00% success rate (2 out of 5)

Full results are shown below broken out by strategy.

SUMMARY

Overall another good month, not only because I made money, but because I feel like I’m growing as a trader and making better decisions. Currently I only have 3 open positions – an RUT and SPX Iron Condor and an SPX Weekly Bear Call Spread, all of these are looking good after the selloff today, so hoping for another good month going forward.

At the moment, I am currently only using $8,600 in margin which is only 6.50% of my capital. As you know, I am a very conservative trader, so I have a question for you. Now that is am focusing primarily on Credit Spreads and Iron Condors, should I start risking more of my capital given that I have had 41 winning trades out of 48 (85.42%) this year, have made $14,154 from this strategy and have yet to have a losing month this year? Bear in mind, that the last time I traded bigger position size was a Bull Call Spread on RUT entered on 7/28, right before the market fell off a cliff. I lost $4K on that one trade, BUT was able to adjust it. Those of you who have been following me for a while, know I HATE losing trades. So, I’m going to put it to a reader vote, should I increase my risk or not???

Options Trading Tutorial October

Leave A Reply (No comments So Far)

No comments yet

How To Trade