Update on Open Trades Expiring In November (16th)

With 20 days remaining to expiration the 2 Bull Put filled trades are way out of the money now and should easily be expiring. The market continues to rise even though oil is approaching $100 per barrel and turmoil exists between Turkey and Iraq. I will be researching Bear Call spreads very carefully next week after the Fed meeting. Their decision on rate changes could have a significant effect on the market and cause it to spike in either direction. I hope the impact has a neutral effect on the NDX and RUT Indexes. I will also research safe SPX Bull Put and Bear call trades. I really want to complete one or two iron Condor trades this month.

All October Trades Expired Worthless Friday 10/19/2007

All Bull Put Spread trades expired worthless on Friday October 19th. Although we had no completed Iron Condors I am very pleased with the 3.2% average return achieved on these Bull Put trades. The Indexes were rising just about every trading day until the 19th when the Dow dropped 366 points. Bear Call spreads for the 3 Indexes I trade were very risky and could not be traded because of this risk. My trading strategy is very conservative resulting in safe credit spread trades earning 3%-5% each. My monthly goal is to complete safe Iron Condor trades earning 5%-8%. My goal for the remainder of 2007 is to earn a respectable 5% each month.

The total return this month was 3.2% ($390/$12,110). All credit premiums collected totaled $390 (40+125+90+50+85) and $12,110 (960+4,875+2,410+1,450+2,415) margin was required per contract. If you traded 10 contracts per spread your credits totaled $3,900, 20 contracts $7,800. These are the minimum returns and cash flows I expect to receive consistently each and every month. The return will be higher in months when Iron Condors can be completed on each Index.

New trades expiring in November be emailed later this weekend. I will continue to focus on selecting very safe trades. I already have a few new Bull Put trades identified. To complete Iron Condor trades I will wait until next week to trade a Bear Call spread. I want to see what direction the markets trade on Monday and Tuesday. Friday's 366 drop is being called a correction. We will see early next week. Their is also a Fed meeting and rate reduction expected in November. A rate reduction will cause the markets to rise

Trade Alerts

I normally email new Trade Alerts 40-30 days prior to expiration. Then each weekend I will analyze additional spread trades searching for those with high probabilities of expiring. During the 2 weeks prior to expiration I am looking to make adjustments for certain spreads to earn additional credits. All my Trades and adjustments are emailed in the evening or on weekends when the markets are closed. I am always placing my own trade orders when I send these emails. It is a boring strategy and requires very little effort for my subscribers. The majority of months all we do is open our Iron Condor trades on the SXP, NDX and RUT indexes and wait for them all to expire and then repeat the process over and over each month. I will email a minimum of 3 to 4 very safe FOTM Iron Condor trades each month. These will have a 90% or better probability of expiring worthless. The returns will range from 3% - 8% but on average you can expect to earn between 4.5% and 5% monthly before commissions.

CBOE's Virtual Trading System

Click the link or the right side of this blog to access CBOE's virtual trading system. This system is free to use by anyone and no brokerage account is needed. Paper trading is the best way to learn how to execute, track and manage stock and option trades. For both new and experienced options traders this system allows you execute trades associated with all the option strategies. I am recommending to all my new subscribers that they use this system during their 60 free trial to paper trade all my credit spread trades.

Also, the system CBOE is using is OptionsXpress's actual virtual trading system which is one of the best available on the internet for paper trading option strategies.

Update on Open Trades Expiring In October (19th) - Only 5 Days Remaining

With only 5 days remaining to expiration all filled and open Bull Put trades will be expiring with lots of distance on Friday the 19th. Because we had no Bear Call spreads filled this month we had no trades to adjust. The market continues to rise every week with no end in sight. Bull Put trading is the only safe strategy this month and probably next month. If the market does settle down to a normal trading pattern we should be able to complete one or two Iron Condor trades next month. It's always better to receive 2 credits for one margin requirement. This is how we can achieve a 5% - 8% return. When we cannot complete an Iron Condor trade our returns will average 3% to 4%. This is the case this month. All the open Bull Put trades expiring this week have returns ranging from 2.6% to 4.2%. If we could have completed Bear Call spread trades the returns would be 5% to 8%. This is a very unusual month and until the market stops rising Bull Spread trading will be the norm. My strategy is conservative and safe so please be patient about earning higher returns. The markets will return to a neutral trading pattern and when they do both the Bull Put and Bear Call trades will be be safe again.

Update on Open Trades Expiring In October (19th)

With just 12 days remaining to expiration all our filled Bull Put trades will be expiring with lots of distance. The market is continuing to move in just one direction (UP) making Bear Call spread trades very risky and very unsafe. With a market like this I will not be able to complete any Iron Condor trades this month. It just to risky to trade on the Call side this month. I have also sent a new NDX 25 point Bull Put spread trade this weekend. Subscribers who did not get last week's replacement NDX 25 point trade filled should be able to get this new trade filled this coming week.

This weekend I have started sending the PDF file email to all subscribers. This is in addition to the automated HTML email. If you do not want to receive the HTML or PDF email just send me a reply email. Many subscribers have had trouble receiving my Trade Alerts and Updates due to various email system issues but they seem to receive one of the 2 emails I send.