ETF Option Trades

New Trades Expiring in September

8/30/2008 September Trade Update:  The markets were up and down again last week. The ETF indexes we have open trades with are hovering and not causing any concerns. All our trades have lots of distance and are very safe this weekend. We also have a hedge trade in place in case the market crashes. It would make sense to hedge the call side if the market starts moving up on a consistent basis. But this market continues to go up and down with the net effect of not changing very much. Our hedge on the Put side is very necessary because a market crash could occur at any time causing the market to drop 8%-12% in just a few days. This is also why we should have contingent stop loss orders in place to automatically close our Bull Put trades. We should be able to manually sell the Put options for a big profit after the market drops. The markets will never rise 8% to 12% over a few days but it could over a few weeks. At the beginning of an uptrend we would buy some call options if we have any Bear Call trades open.  .

2008 Monthly Trade Performance

**January 2008 was my worst month trading options ever. I waited to long to close the Bull Put open trades. With only one point difference the cost to exit these trades was very high per contract (average $111 ). I now close trades in trouble when the index is within 4 to 3 points.  The average cost to close earlier is approximately $40, so your net loss will only be $25 ($40-$15 your original credit). We will always try to recover the majority of this $25 cost in a new trade we roll to. My goal is always to recover $20 or more of this cost, and sometimes we will be able to recover the entire amount. January was a tough and important learning experience.

8/15/2008:  Our 2 Iron Condor trades expired worthless on Friday the 15th. I will be refunding all paid subscription fees received during this trading cycle (7/19 to 8/15) next week. We had to close the rollover Bear Call trade for a loss which was not offset by the credits received on the 2 Iron Condor trades. The weekend I will be emailing and posting to the members page new trades expiring in September.

7/19/2008:  These July trades were very challenging. The markets dropped fast in May and again in June. Then they recovered and dropped again. Trading Iron Condor’s in a Bear Market is not easy but achievable if the trades are conservative. My August trades will be very conservative with lots of distance and returns averaging 5%. It’s going to be hard to enter any safe trades earning more than 5% this month. When this Bear Market is over trading Iron Condors will be much easier and more profitable.

6/20/2008:  All 3 ETF Iron Condor trades filled in May expired worthless this week. The return this month was 8.3% (46/554) for these Iron Condor trades.

5/18/2008:  The 2 May ETF Iron Condor trades expired worthless last week and earned 8.1%. The markets are trending up slowly which is a perfect pattern for Iron Condor trading so I expect this monthly performance to continue for the remainder of 2008.

4/18/2008:  All 3 ETF Iron Condor trades expired worthless. I am very happy with the 4.2% monthly performance.

March 2008 3/20/2008:  All 4 ETF Iron Condor trades expired worthless. Even though the markets rose and fell by 200-400 points during the holding period our trades remained safe and have now expired. I am very happy with the 8.1% monthly performance. 

February 2008 2/15/2008: I am very pleased that all 3 ETF Iron Condor trades expired worthless. These were very safe trades which is why the monthly return was 8.8% ($53//$600). This market is still very volatile so earning 8% is OK in my play book. . 

January 2008  was my worst trading month ever. All subscription fees for January have been refunded. I will also refund the February and March subscription fees since it will take many months to recover. All my new trades will be safe and managed very closely to insure a loss like we had in January is never repeated.
 

December 2007  What a great way to end the year. All 3 Iron Condor trades expired worthless.