Deep OTM NP Strategy – July 2011 Results

Fellow Traders,

Another trading month has come and gone.  Where does all the time go?  Each month seems to go by just a little bit faster than the last.  It was a good month for the Deep OTM NP Strategy.  We had a total of 43 selections meet our criteria this month, 40 finished OTM.  That gives us a success rate in excess of 93%!  Not bad considering the quality of the companies underlying our NP selections and the shakiness of the economy.  Below are a few metrics which provide further support for my conclusion that it was a good month for the Deep OTM NP Strategy.

Percentage NP Trades Finished OTM: 40 of 43 = 93.02%

Cash Secured Capital Required to Enter All 43 Trades: $274,300.00

Premiums Received (net of commissions): $5,361,40

Net Premium ROIC: 1.95%     Annualized: 26.42%

Our three losers for the month were PTIE, SIGA, and ZN.   A passive investor who failed to get out of these 3 prior to expiration would have suffered net capital losses (including commissions) of $1,851.85.  This would have reduced the overall net profit in trading this month to $3,509.55.  The net of losses ROIC would have been 1.28%.

I will be back with another post later this weekend with our new round of selections for the August – Week 4 period.

Regards,

Troy