Finally getting back to blogging :-). I had a great holiday break, and 12 days off work (8 of them paid)!
December was a pretty bad month for my accounts though. I've realized that my smaller account was just too small of an account to start with, so I will no longer be trading with it. It seems to me like ~$5,000 is the minimum amount you want to start trading long strangles with. My larger account (starting with $4,325.75 the end of May) has done much better overall. I finished the year with a 41.5% return ... in just over 7 months of actual trading :-).
Account 1
12/19 - SLB Jan 55P/65C - Net loss $875.40 (-22.59%)
12/19 - SLB Jan 55P/65C - Net loss $875.40 (-22.59%)
Total loss realized in December $875.40 (-11.70%)
Account 2
12/18 - FDX Jan 60P/80C - Net loss $735.40 (-78.2%)
12/18 - AMZN Jan 40P/65C - Net loss $672.60 (-81.5%)
12/18 - AMZN Jan 40P/65C - Net loss $672.60 (-81.5%)
Total loss realized in December $1408.00 (-48.14%)
Ending account values
Account1 - $6,122.05 (Realized/unrealized gain of 4.61%)
Account2 - $925.47 (Realized/unrealized loss of 38.5%)
2 comments:
I don;t think you should be trading long strangles with any account.
Just my opinion. It's far too risky.
Hmm, so far I've been pretty happy with my results. I don't see it as being very risky because you win 2 out of 3 possibilities. Stock moves up or down I profit, if it stays flat I lose. Which is why I'm now picking up Iron Condors because they profit if it stays flat. Seems to me like it would be a good way to "hedge" my long strangle strategy.
The key is picking the correct stocks to play on. I have custom scans in my charting software that bring me 10-20 stocks that have a history of large volatility. Lately those have been a little harder to find, but moving through January I'm starting to see more again.
What I have discovered is that Oct-Dec the markets tend to flatten out, so next year I back off trading strangles going into the holidays. Probably shift over to more IC trades, or something like that.
Every strategy carries it's own risks and rewards, which is why every trader needs to pick his own strategy.
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