We started testing this Option Trading Strategy on 6/1/2006. On Oct 3rd, we came close to breaking $12.00. Unfortunantly the market moved against us and even suffered from a losing trade in Nov. Although we are not completely out of the water yet for the month of Nov, we do have 19 points of room with 5 trading days to go. This gives us a secure winning percentage of about 90%.
The NAV breaking $12.00 also means our YTD return finally break the 20% barrier. We are now up 20.45% since Jun 1st. If we continue at this pace, our annual reaturn by next Jun will be 47.24%. Not too shabby.
The next stage is to generate ~20% return for my mom and my girlfriend’s portion of the fund. Once we successfully do that, we will open up the fund and help more family and friend invest and build wealth.
defense contractors:
Democrats are against the Iraq War.
pharmaceuticals:
“There will be noise about Medicare getting to negotiate drug prices like the Veterans Administration, as a consumer that’s good, but as a shareholder you want as little competition as possible,” said Barry Ritholtz, fund manager at New York-based Ritholtz Capital Partners.
discount retailers:
“We’re certain to hear noise about the minimum wage that can impact everyone from Wal-Mart to McDonald’s ,” Ritholtz said.
Mom’s $3000 @ 11.71 = 256.12 Shares
Girlfriend’s $2000 @11.71 = 170.74 Shares
New Account Total: $32131.68
New Total Shares Count: 2728.68
Our delta is at -2.38. That means we are near our optimal point (0 delta). The risk EV of the Nov position has shrunk to $161.11. The Dec risk EV is at $190.41 for a total of $353.52. We are only using up a little over half of our allowed risk, $669.16. That means we are at a very safe point and will most likely have winning positions for the rest of Nov and Dec.
The down side to having very safe positions is that we will not be maximizing our reward. But after suffering from our first loss of the season last month, it is probably best to slow things down and refocus on minimizing risk before we start trying to maximize profits again.
