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Archive for November 21st, 2011

CSCO – Trade Results

Posted by mounddweller on November 21, 2011

Fellow Traders,

The purpose of this post is to share with you the results of my trade in CSCO.  I started this trade about a year ago when CSCO was trading at $20.21.  My strategy was to sell puts until assigned and then sell covered calls until they were called away.  As you can see below, that is pretty much the way it played out.  My results weren’t as good as I’d hoped as my overall objective is to average 1%/month or 12% annualized in my trades.

My ROIC was around 10%.  I might have done better had I been a little more aggressive at the beginning.  You’ll notice I didn’t have any open trades between late December 2010 and mid February 2011.  I also might have improved my results some if I had kept a closer watch on my puts and not have let them get so far ITM before rolling.  Not doing so resulted in having the stock put to me early and then I had to wait for several weeks before I could begin selling calls against the position.

Here’s a chart of CSCO for the period covered.

I plan to initiiate a new trade in CSCO very soon.  Currently, I’m considering the DEC $16 puts.  I’d be interested in selling them if the market continues to drop and I can get at least $0.16 for them.

Regards,

Troy

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Deep OTM NP Strategy – NOV Exp Results

Posted by mounddweller on November 21, 2011

Fellow Traders,

As promised I have the results of the Deep OTM NP Strategy for the NOV expiration period.  During the NOV trading period the selection criteria presented us with 424 possible trades.  Executing all 424 of these trades using the capital allocation rules provided here: https://troysmoneytree.wordpress.com/trading-plan/ would have required a total of $3,246,250.  This would have generated premiums, net of commissions, totalling $63,630.70.  This gives us a gross premium ROIC of 1.96% or 26.5% annualized.

However, this trading period we also experienced a fair number of trades that finished ITM, 38 to be exact.  Subtracting 38 from 424 gives us a ‘win’ percentage of 91.04%.  Capital losses (assuming all positions were held to expiration) would have been $29,780.70.  This gives us a net return of $33,850.00.  This equates to a 1.04% ROIC (14.1% annualized).

November results trailed slightly behind those recorded in September and October.  However, they were far better than the dismal results the strategy returned in August.

During the November trading period I highlighted 11 trades as being ones that I thought were particularly appealing.  10 of the 11 finished OTM giving me a success rate of 90.9%; almost exactly the same as the overall strategy.  Maybe I should hire a monkey to throw darts at the selections (ha ha)!

Happy Thanksgiving.

Regards,

Troy

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