The Money Tree

Safely Generating Income in Retirement

Archive for October 21st, 2011

Deep OTM NP Strategy – OCT Results

Posted by mounddweller on October 21, 2011

Fellow Traders,

Another trading month has past and it was a successful one for our Deep OTM NP Strategy, albeit not as successful as in prior months.  This month we were presented with 500 trading oportunities.  Trading all 500 positions would have required $4,024,650 in capital.  Doing so would have generated $70,731.25 in premiums net of commissions.  However, volatility this month took its toll.  While the percentage of trades finishing OTM was high (473 of 500 for 94.6%) there were several of the 27 finishing ITM that had large losses.

Capital losses net of commissions totaled $25,909.85.  Thus, premiums net of capital losses came to $44,821.40.  This gives us a net ROIC of 1.11%, 11.61% annualized.  As I said, not great but still a solid profit.

This month I faired no better than the overall averages.  I selected 10 trades from the 500 presented that I thought had a high probability of finishing OTM.  9 finished OTM, with only AAWW finishing ITM.

Well, that’s it for this post.  I’ll be back later this weekend with a look at our NOV Week 4 selections.




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