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
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