Archive | Monthly Review

Some Perspective on Performance

Wednesday, October 7, 2009

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Investors are notorious for chasing performance. If a mutual fund or advisor or trading strategy has done well recently, chances are much greater that traders will commit money to that strategy or...

November Monthly Review

Sunday, November 23, 2008

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In last month’s review, we noted that extremely volatile market environments can sometimes be your friend: The good news is that, as we’ve been advising our subscribers, periods following intense market selloffs historically have been the most profitable ones for our strategy, and as implied volatility has already declined from its earlier peaks, we are already seeing some fantastic profits on our positions for the November cycle.  An elevated volatility environment is torturous for swing traders and ulcer-inducing…

October Monthly Review

Sunday, November 2, 2008

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Two types of traders really thrived in October – the uber-bearish, and the nimble.  Since our Condor Options newsletter follows a non-directional strategy, we aren’t poised to profit from market swings.  But we do try to be nimble, and subscribers were subjected to a rather unrelenting series of pleas for caution and for a move to cash throughout September and October. On September 12, we said that we were “trading small” and were “cautious – as we get…

September Monthly Review

Sunday, September 21, 2008

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In our August monthly review, we expected that “the next phase of this bear market will likely be driven not by U.S. financial companies or by energy prices per se, but rather by the effects of the American slowdown being felt by the rest of the world.”  See, that’s why we’re traders and not economists.  Although in our defense, the reason AIG was nationalized was partly because of the effect its failure would have had on European and other counterparties. …

August Monthly Review

Sunday, August 17, 2008

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Last weekend, we noted that the next phase of this bear market will likely be driven not by U.S. financial companies or by energy prices per se, but rather by the effects of the American slowdown being felt by the rest of the world.  A front page story in the WSJ on Friday noted the falling Eurozone GDP as additional evidence of a global slowdown. Looking forward, we expect continued bullishness in equities next week as the lack…

July Monthly Review

Sunday, July 20, 2008

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The theme for July was most certainly risk management.  The broad-based decline this summer has been quite breathtaking to watch, especially as all of the technical and sentiment-based indicators that we follow moved from oversold status to extremely oversold status to something like doubleplusungood.  Our attitude throughout late June and early July was that the unending litany of bad news deserved to be taken seriously, and that waiting around for the “inevitable bounce” and “inevitable VIX spike” would…

June Monthly Review

Saturday, June 21, 2008

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We feel like we’re saying this every month, but it sure feels nice not to have any skin in the game come expiration day.  Options expiration surely had something to do with the intensity of today’s selloff, and this was a textbook case of why we never hold positions into expiration. The fancy-pants phrase for the influence options expiration had today is “negative gamma.”  The practical significance of that phrase is that when we gapped down at the open, lots…

May Monthly Review

Saturday, May 17, 2008

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We’re making some changes to our monthly review – hopefully the structure of this new format will make it easier to follow along and compare our strategy with the relevant benchmarks. Going forward, we’ll include the following items in each monthly review: 1) a quick-glance overview of our monthly performance, in the chart at right; 2) a performance comparison of our positions for the month vs. the SPX, DJIA, and RUT, plus BEP, which is an S&P 500 Covered Call…

Bonus Trade Review: Calendar Spreads – Plus, The Importance of Risk Management

Tuesday, May 6, 2008

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With the continuation yesterday of Friday’s market weakness, the last of our April 3 calendar-spread bonus trades hit its minimum profit target. Here’s a summary of the three positions: EEM May/June 140 – Reached 20% profit on April 15, less than two weeks into the trade. XLE May/June 77 – Even if entered at the less-than-optimal price of $1.20, this position achieved our 20% minimum profit target on the sell-off in energy that occurred May 1, which was…

April Expiration Monthly Review

Sunday, April 20, 2008

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We closed three positions for the April expiration cycle, and as you can see from the chart at right we actually did a little better than our monthly goal of an average return of 10% on capital risked per trade. This month’s average return per trade of 11.92% brings our average number since inception to 9.33%. It’s worth mentioning that this 10% goal is completely arbitrary, and is just that – a goal. If you average returns of even 2-4%…

March Monthly Review

Sunday, March 16, 2008

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You don’t have to be a grizzled value investor to agree with Warren Buffet’s two key rules of investing: “Rule No.1: Never lose money. Rule No.2: Never forget rule No.1.” Since we opened our first trade for March expiration, the S&P 500 index is down almost 100 points – that’s a loss of over 6.6% in a little over one month, and the index is now off 12% from it’s January open. Continued weakness in the U.S. dollar means that…

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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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