monthly report

Options Trading Monthly Report July 2020

I must admit this has turned out to be a really positive exercise for my trading. When I decided to start recording my trades and share them as monthly reports back in March, I thought it would likely end up either like a few years ago when I tested out Tasty Trade style of options trading methods, with a lot of winning trades but overall negative Profit and Loss (PNL), or just simply a lot of losing trades and negative PNL.

As it turned out, there is only one type of trade that is making me money and all others are losers. The data I have gathered over the last few months has really confirmed what I am good at and what I am not. Just like there are athletes with different styles at playing the same game, options traders should experiment and find their own trading style instead of blindly following other people’s trading style. Please note I am not saying don’t do what other people are doing, what I am saying is to try it out, and find out if it is a right fit for you or not.

If you have been following my blog and Youtube channel, you probably know I am not a fan of day trading. I have tried it a bit and it just doesn’t mesh with my personality. I don’t like to get drenched in adrenaline day in and day out. I don’t want to sit in front of the desk the whole day. I am not looking for another full-time job. What I want is to trade with a part-time effort and get a full-time payout.

I know it is still early to say this is going to be the only type of trade I am going to do moving forward, or this is going to be the winning formula to get me to the next level. All I know is that I enjoy the process on how to execute the trades; not very time-sensitive nor requires me to sit in front of the computer all day.

I am also testing/refining my Volatility trade strategy that is different from the one I shared at the beginning of this year. I plan to share it once I have more data for those trades as well.

 

Profit and Loss (PNL) by Strategy

First of all, good news. The selling PUT strategy is actually working better than I thought. Apparently, I forget to include the options that expired out of the money in May and June monthly reports. I have updated them now so they are actually a little higher (more profit) than what was reported before.

July was a profitable month now that I have stopped trading all the other types of strategies. There were a few positions that I lost the most even with selling PUT strategy and they were TLRD and BGG, both filed Chapter 11 bankruptcy. The reason I traded them was because of high ROI (20 – 30% ROI in a month) but obviously, they were high-risk trades.

Spread Type Month PNL
SINGLE July  $          1,327
STRANGLE July  $                –
VERTICAL July  $                –
STRADDLE July  $                –
DIAGONAL July  $                –
COVERED July  $                –

 

Cumulative PNL for 2020 (March to the first week of Aug)

Spread Type PNL Trade Count PNL / Trade
SINGLE  $          7,376 105  $             70.25
STRADDLE  $         (1,597) 7  $         (228.14)
DIAGONAL  $            (402) 8  $           (50.25)
COVERED  $              (15) 1  $           (15.00)
VERTICAL  $         (1,099) 11  $           (99.91)
STRANGLE  $            (238) 10  $           (23.80)

I started trading more weekly options and that help to lift the PNL for August so far. It has already surpassed the entire July’s positive PNL. Another reason for the large profit jump is that I also started selling covered Call for GNW, which I got assigned in June and July.

Winning Ratio

Spread Type Win Loss % Win
SINGLE               94.00                  14.00 87%
STRADDLE                 3.00                    3.00 50%
DIAGONAL                 3.00                    3.00 50%
COVERED                      –                    1.00 0%
VERTICAL                 1.00                    6.00 14%
STRANGLE                 5.00                    3.00 63%

The winning ratio for selling single leg (“SINGLE”)  is a little higher than the actual number because some assigned trades followed by selling the stock with a total profit is recorded as a “Win” as well. Nonetheless, most of the trades had a pretty high Delta at the time of entry and some are even higher than 50% or in the money. I stopped paying too much attention to Implied volatility as well and focused more on time value or underlying stock movements (support and resistance).

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