Deep OTM NP Strategy – June 2011 Results

Fellow Traders,

Well, another month of options have expired.  This trading month produced 38 selections.  23 of the 38 (60.5%) trades finished OTM.  This is by far the worst ‘win’ percentage since I began tracking this strategy just over a year ago.  To have traded all 38 of the selections would have required $282,250.00 in capital.  This would have produced premiums totalling $5,572.90 (net of commissions).  This results in a ROIC of 1.97%.

However, once again this month our premiums would have been gobbled up by losses.  Left unmanaged (i.e., not exiting the position at the first sign of trouble) would have produced total capital losses $15,731.25.

Again, I want to highly recommend you do significant DD on any selection you choose to trade.  As you can see from the above results, when the overall market is in a downtrend and volatility is increasing the ‘win’ percentage can drop significantly and the capital losses can be substantial.

Look for another post with the first round of picks for JUL expiration.

Regards,

Troy