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Deep OTM NP Strategy – July 2011 Results

Posted by mounddweller on July 16, 2011

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

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