August Portfolio Income – 3.14% Return

The August portfolio was once again extremely profitable with another month without ANY losses! Although our QQQQ 40 Call gave us a bit of a scare this week, we were still able to close it out early with a profit of 3.30%.

As many of you know, we entered many of these positions during July when the markets were moving sideways. We had anticipated an upward move and therefore sold a lot of Puts below the market which worked beautifully as the markets rallied up. Once again, the power of option writing/selling is clearly evident. To re-cap the month’s income, let’s look at what we made vs. our required investments (in margin).

Here are the positions we had with corresponding PROFIT/INVESTMENT and RETURN:

SPY AUGUST 65 PUT- $17/$650 = 2.61% Return

QQQQ AUGUST 40 CALL- $12/$363 = 3.30% Return*

DIA AUGUST 66 PUT- $20/$621 = 3.22% Return

IWM AUGUST 37 PUT – $14/$372 = 3.76% Return

Once again, we did not have to close out any positions this month at a loss. This just goes to show everyone that by writing options, you are basically forcing the indexes to make dramatic moves in a very short time frame. And since we have positions on BOTH sides of the market (Puts and Calls), you are guaranteed to make money on at least one side of the trade every time – or both sides like we do every month.

With regard to TOTAL INCOME and RETURN, the August portfolio produced $63 of total income after investing just $2,006 in margin. That means we saw a total portfolio return of 3.14% this month. Flat out great return once again! As we usually point out continuously, our calculations assume that you enter just 1 (ONE) contract per week – i.e. a total of 4 contracts for the month.

Those members with a higher captial base should be entering multiple contract positions each week. For example, if you are trading a portfolio of $15,000 then you would have generated roughly $471 of income!

Enjoy your profits!