February Monthly Review

February 2009 was one of the most profitable months ever for our newsletter.  We were able to enter several positions at optimal moments in the cycle, and a cooperative market allowed us to let some trades expire worthless.

Performance Comparison

  • S&P 500: -9.42%
  • Dow Jones Industrials: -11.06%
  • Russell 2000: -11.90%
  • S&P 500 Covered Call Fund: -11.89%
  • Condor Options VAMI: 3.10%
  • Note: the period measured is from expiration to expiration.

Our updated Performance page compares the value-added monthly indexes of the Condor Options newsletter, the Credit Suisse/Tremont Equity Market Neutral Hedge Fund Index, and the S&P 500.  It includes slippage (the prices displayed in the trade list spreadsheet are the actual prices at which the participating autotrading brokers were filled), but excludes any other transaction costs.

February Iron Condors

  • SPY 76/78/100/102: 31.88% return.  This trade performed well from the start, and we exited the put spread several days prior to expiration as most of the premium in these options had already eroded.
  • IWM 36/38/52/54: 36.99% return.  This trade expired worthless, allowing us to keep the full initial credit received.
  • SPY #2 70/72/89/91: 5.43% return.  We opened this position later in the cycle (Jan. 22) with a deliberately bearish bias in order to hedge some of the positive deltas that had accrued to our existing positions.  This hedge trade performed its function well, and as the market moved higher, we were able to close this trade for a small profit while having protected the profitability of our other two trades.
  • This process of managing greeks – rather than just focusing on individual trades – is the most important factor in trading options.  After all, in a certain sense an option contract is really nothing but the greek values it expresses.

February Reading

Here are some posts from the past month that are worth checking out if you didn’t catch them the first time around:

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    [...] recording a very profitable month in February, we gave back some of those gains in March in order to preserve capital and adhere to our rules for [...]

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Jared Woodard specializes in trading volatility as an asset class. With over a decade of experience trading options and other volatility products ... Read More

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