My November Performance Compared to Kim's

[Guest Corto]

Kim,

Spreadsheet clipped below of my Nov performance compared to yours. You will notice a few things

1) Looks like you base your numbers off ~2000/trade. I target $1k/trade. My bottom line # would be ~$309 profit if I doubled it, or about 14% of the results you achieve.

2) I have stopped taking the non-earning plays. Those are listed as "Did not take"

3) There are quite a few "Did not get" notes meaning I was never able to get a price near your entry point and never got into the trade.

There is too much time and management in the non-earning trades for me which is one of two reasons I am not taking them.

When factoring in commissions and slippage and not getting trades because of what I consider too much slippage, this really just isn't producing results for me, even in what you are considering a good month for the program. I can't see how to rectify the trading to improve it significantly either. I don't make trading mistakes, and the ones I do get in I feel I am managing pretty well.

Mike

Book1.pdf

Edited December 3, 2012 by Corto

[Guest]

seems all of the difference can be explained by 'did not take' trades - so maybe you should takem

Seems to confirm my thoughts I mentioned in another thread - where I said I consider the earnings trades almost a cheap hedge (well one that in fact earns me a bit of money) for the income trades that I can now make bigger and sleep better with.

I'm not sure why you see them more effoert than the earnings trades usually you roll them once a week if you have to adjust you can usually combine that with the roll. maybe with 5 weeks of weeklies now sell the weeklies that expire in 2 weeks time - makes the trade slightly more conservative and you only need to roll every 2 weeks. Should make it slightly less maintainance.

Edited December 3, 2012 by Marco

[Guest]

I am Kim is taking 10% of his total Which is current about 23k, so his trade would be around 2 k per trade. I am in the same boat with you about the time consuming to follow all the trade. I just study a few non directional trades over the weekend and executed over the week. It gives me pretty good result. Of course, I got no where near Kim's performance. However, consider Kim is full time on this and I am not, I'm pretty happy wih the result.

[Guest Corto]

Kim,

I don't expect you to say anything. I am just putting my thoughts and results out there. I did miss the compounding. Duh.

The sense I get from a lot of the responses I've seen is that my results are probably relatively typical for a new person. I have a need to put stuff out there to help bolster my confidence in the system. It helps when I see responses from old timers and yourself that things generally improve with experience and time.

No worries, it is only money and it is mine to profit or lose. And like I said, things have been improving.

Mike

[Guest]

Kim,

I don't expect you to say anything. I am just putting my thoughts and results out there. I did miss the compounding. Duh.

The sense I get from a lot of the responses I've seen is that my results are probably relatively typical for a new person. I have a need to put stuff out there to help bolster my confidence in the system. It helps when I see responses from old timers and yourself that things generally improve with experience and time.

No worries, it is only money and it is mine to profit or lose. And like I said, things have been improving.

Mike

Mike,

I personally work full time during the day (not that trading isn't work of course) and can't get to a terminal except maybe once a day during lunch, so the earnings trades have not worked for me. I stopped even trying them a long time ago. However I have done some of the calendars successfully, and only trade about 20% of my portfolio now and keep the rest in dividend stocks or covered calls. I was even considering writing covered calls using ITM leaps to ensure a relatively save few % rate of return.

Also, I think what Kim has noted, if we get some 2 SD price swing one day you could very large ROR. Those events are not as rare as they sound

Good luck.

[Guest listolyman]

I have been considering the opportunity cost for the SO style of investing. If you invest in the SO model portfolio of $10k and make 2-3%/month then you would make 200-300/month. If you divide that by 20 days of trading a month then a profit of $10-15/day for actively managing your account. The question for each of us is what is the minimum amount that you need to average a day to justify the investment of time. There is a value in the education but there is also a monthly cost for SO membership and comissions that reduce the 2-3 percent gain. I have been learning and following the SO process for six months and my portfolio is down double digits due to the complexity of the process and time management.

Edited December 4, 2012 by listolyman

[Guest Corto]

That is a very interesting way to look at it. The only other method that I can think of that has the potential of continuous income on a weekly or monthly basis is covered calls. But I've already gone through that badly in 2008 when all my holdings went underwater and then I was terrified to write calls for fear of getting called out below my original buy price.

But there are some long term core holdings that I do hold regardless of the state of the market. And I could probably make similar level amounts/month by writing very OTM calls. But the underlying amount that is at risk is much larger, and the % return is much smaller, so I should take that into account when comparing the methods.

Keeps on coming back to the reason why I joined SO, limited risk, good return. But as listolyman' return proves, SO is not a foolproof method.

[Guest listolyman]

Good point. Unfortunately, i have not been able to make 2-3%/month(since i am in the negative) so investing 100k is probably not a wise choice at this time. I realize that the larger the investment then the more you make per day. Just curious how much time others are investing per week to manage trades and what their percent gains are averaging?

[Guest Corto]

Kim,

It would be interesting to see the current profit/loss of active subscribers for those who are willing to post it. Maybe a special forum could be started. I would like to see the following info: How long a sub, and current overall % gain/loss based off their trading portfolio size.

I'll start off.

2.5 months sub, I trade a 10k model portfolio and am currently down 7.4% overall.

[Guest listolyman]

Good idea mike. I would also like to see years of options experience and approximate hours invested a week in SO trades(researching, reading, placing trading, monitoring the screen, etc.).

6 months sub, 10 portfolio and down about 20% overall. This is my first six months of options investing and i spend about 15-20 hours a week learning, monitoring, etc.

Edited December 4, 2012 by listolyman

[Guest Corto]

I have 20 years of options experience, but none to the level of detail done here. Mainly buys, covered calls and vertical spreads.

I would estimate I am at about 1/2 to 1 hour/day tracking and such, maybe more on heavy weeks, and certainly some days where it is almost nothing. I really do rely on Kim and his expertise, and I do almost no checking of the trade's validity myself, for good or bad.

Mike

[Guest]

But I've already gone through that badly in 2008 when all my holdings went underwater and then I was terrified to write calls for fear of getting called out below my original buy price.

Mike,

How could you get called out below your original buy price? Why would that happen?

[Guest Corto]

The goal was to make constant income.

So imagine, buy XYZ stock at $100/share. Write 105 strike call for $2. All is well in the world. Then XYZ drops to $80/share. Still want income? Need to write some call in the low 80s to get any kind of premium. If xyz then rallies above the strike, you need to roll the call for a loss usually, or go way out in time, or end up getting called way below the original $100 buy price.

Or, you let it sit, uncovered, not making income, because you are too scared to write a call way below your original buy in.

It is very easy to get screwed with covered calls in a bear market.

[Guest]

Kim,

Spreadsheet clipped below of my Nov performance compared to yours. You will notice a few things

1) Looks like you base your numbers off ~2000/trade. I target $1k/trade. My bottom line # would be ~$309 profit if I doubled it, or about 14% of the results you achieve.

2) I have stopped taking the non-earning plays. Those are listed as "Did not take"

3) There are quite a few "Did not get" notes meaning I was never able to get a price near your entry point and never got into the trade.

There is too much time and management in the non-earning trades for me which is one of two reasons I am not taking them.

When factoring in commissions and slippage and not getting trades because of what I consider too much slippage, this really just isn't producing results for me, even in what you are considering a good month for the program. I can't see how to rectify the trading to improve it significantly either. I don't make trading mistakes, and the ones I do get in I feel I am managing pretty well.

Mike

Most of your losses came from ADM, which I assume you were forced to hold through because of Hurricane Sandy. That type of event occurs once every several decades. If you throw that result out, you are doing a pretty good job with the pre-earnings IV strategy.

[Guest Corto]

Agreed.