March 2017 options income

March 2017 trading turned out to be successful again although at first not expected.

As I mentioned in my previous posts about options trading I dedicated this year to consolidate my trades from previous year. I opened a few trades which I no longer like and I got stuck in those trade by first over-trading and then rolling them far away. Now I sit on those trades and they are dead money.

So, I decided to sequentially get rid of those trades. In previous months I closed a few trades for a loss, but offset that loss by new trades. I was successful in January and Fenruary this year.

I did the same in March 2017. But I closed too many trades in March. At least I thought so. I closed trades for $2,600 dollars loss.

But I was able to trade this loss out and finished the month with gains.

My plan for March 2017 was to make $1,717.35 dollars of income.

Although I haven’t met our goal, given the circumstances that I was offsetting a loss, I am happy to say that we were able to make $1,619.74 dollars of option income.

 

 · Options Trading Strategy

 

Over time since I learned trading options I went from trading spreads, single naked puts, later added naked calls and landed on trading strangles. Many people are afraid trading strangles. They do not know how to protect themselves when having naked calls trades. I was afraid too until I found out that it is not as dangerous as others say.

I am not saying that there is no risk, but if you know how to handle the risk, you will be able to navigate through strangles with no fear.

Over time I developed my own rules and strategy. You can review it in this section.
 


 


 

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 · Options Trading Results

 

As stated above our trading in January was really great and we made $1,619.74 dollars.

Below you can see all data and progress in our trading account:
 

Month-to-moth trading results

Trading results
 

(The red dots on the chart indicate income estimate, blue bars actual earnings.)
 

In March 2017 we made: 49 trades
Total trades in 2017: 136 trades
March 2017 options trading income: $1,619.74 (47.27%)
2017 portfolio Net-Liq (net)*: $2,708.97 (-32.62%)
2017 portfolio Net-Liq (gross)*: $23,208.97 (-5.35%)
2017 portfolio Cash Value (net)*: $28,141.97 (20.10%)
2017 portfolio Cash Value (gross)*: $48,641.97 (10.72%)
2017 portfolio Equity (net)*: $33,328.97 (4.20%)
2017 portfolio Equity (gross)*: $53,828.97 (2.56%)
2017 Liability/Debt: $20,500.00 (0.00%)
2017 overall trading account result: -28.25%

* The numbers marked as “net” and “gross” are results with loan (liability) included (gross) or excluded (net).
 

 

 

We are presenting you our month-to-month business performance review:

 

In March 2017, we made money to offset closing bad trades and yet ending up with gains.

However, these gains were immediately blocked by other existing trades and a few new trades.

The biggest problem was a $LULU trade. The company missed by very little when reporting earnings but provided weak guidance which sank the stock more than 20%. This trade had negative impact on our net-liq and overall account results.

However, I consider it a temporary decline since we haven’t closed any trades in our portfolio. There fore, once those trades get better again (by rolling , closing, offsetting etc.) our net-liq will go up again.

 

 · Options Trading April 2017 outlook

 

Last month, my March outlook was quite optimistic.

Until the market presented itself in a reversal and decline.

In my last Trading Diary #4 post I wrote that the market retreated from the recent highs. I expressed a hope that the market could pushed up and break the downtrend.

 
SPX
 

As you can see in the chart above, the market is stuck with fighting between bears and bulls. But it cannot break the downtrend line. Anytime the price breached the downtrend line it was immediately sold off.

This was also happening on the downside and the market fell to the support or even below, it was immediately bought by buyers.

However, my overall bias is bearish. Nothing disastrous, but I expect the stocks sliding lower until the market breaks up.

 
What do you think about options trading?

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  1. Given that you closed trades at a loss, you have a great result. I am sitting on deep ITM puts. For now, I keep rolling.

    Strangles is something i would need to look into. Maybe i start with covered strangles.

    • Yes, you can go covered at first to gain confidence. After that you will see how easy it is to trade them. In my opinion better than verticals.
      Good luck and if you need help do not hesitate to ask.
      Thanks for stopping by!