monthly report

September 2021 Options Trading Monthly Report

After experiencing a negative PNL month in August, I decided to switch things up a bit and started hedging for my large margin account. By focusing on reading price action and market sentiment, I was able to get a better feeling of which way the market is likely to go. This has allowed me to scale back the Wheel Strategy and jump back in when the market starts to recover. While the market is down, I also started trading VXX on my small accounts such as the one I am sharing with you in this post.

Since I started trading full-time this year, as I am learning more and putting what I have learned into practice, I came to realize that marrying myself to just one strategy is not the way to go.

My initial thought at the beginning of the year was to just trade the Wheel Strategy but since it’s a positive beta strategy, whenever the market tanks, my account goes down south too. I tried to focus on scaling back or closing down open positions when the market starts to sour which happened several times this year but it was too painful to see my account size goes down.

This is why I started selling call credit spread on large indexes for hedging or selling call credit spread on VXX when the volatility is high.

I must say these activities do help and I am actively looking for ways to sharpen my skills in these types of trading.

Market Sectors of My Positions

I love to look for high IV opportunities for the Wheel Strategy so the health care sector becomes the top industry that I trade because of high IV events such as clinical trial result announcements.

Sector Count
Health Care 5
Information Technology 3
Consumer Discretionary 1
Consumer Staples 1
Industrials 1
Blank 3

September 2021 PNL

It’s nice to see a positive month, especially when there were no losing trades for the month.

Month PNL Positive Negative
January 140 140 0
February 303 303 0
March 0 0 0
April 203 203 0
May 342 382 -40
June 96 96 0
July -81 190 -271
August -361 38 -399
September 120 120 0

NOTE: How I Record PNL for the Wheel Strategy

If I have got assigned for underlying stocks I would sell Covered call on them. I do not record PNL for such positions until I am able to close them.

In other words, I do not record the PNL unless the “Wheel” is completed.

Below is a brief summary of how the PNL is recorded.

Sell Put: If it expires out of the money (not assigned with a stock) or closed out early, it is recorded in the PNL. If a stock is assigned, it is not recorded.

Sell Covered Call: PNL is recorded when the Call is expired out of the money or closed out. It is also recorded when assigned and the stock is called away, or the entire Covered Call is closed out.

Win Rate for Different Spread Types

“Single” represents selling a Put or a Call contract.

Since it requires both selling Put and Call to complete the Wheel Strategy, any positions (Selling a Put or a Covered Call) that were closed with positive PNL was recorded as a “Win”.

Spread Type Win Loss % Win
SINGLE                        48.00            5.00 91%
STRADDLE                               –                 – #DIV/0!
DIAGONAL                           1.00                 – 100%
COVERED                               –                 – #DIV/0!
VERTICAL                           3.00            2.00 60%
STRANGLE                               –                 – #DIV/0!

Thoughts for the September Report

Now that the worse performing month (August / September) for the stock market is behind us, hopefully, we will see positive PNL months for the rest of the year. Inflation is definitely a worrying factor and the Fed will likely start to increase interest rates soon. It would be interesting to see how the market reacts and more trading opportunities will come along with that for sure.

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