October Portfolio Income – 4.77% Return

The October portfolio was once again extremely profitable and marks the 9th consecutive month without ANY losing trades – 9 MONTHS! Compared to the September portfolio, we dramatically increased our return comparatively from 3.63% to 4.77% – more than 100 bps higher. In addition, we showed once again that even in the face of a major market move higher and the DOW closing above 10,000, selling options with out P.O.T.S system still produced a profit.

Back in July and August when we were building the October portfolio, we had anticipated a fairly sideways move and therefore built an evenly hedged portfolio. In addition because premiums were so attractive for Call options, we used half of our capital to sell Calls above the market. Again, this created a completely hedged income portfolio for the month. Remember the indexes cannot be in two places at once during expiration.

To re-cap this 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 77 PUT – $24/$754 = 3.18% Return

QQQQ 32 PUT - $15/$319 = 4.70% Return

IWM 64 CALL - $35/$581 = 6.02% Return

DIA 103 CALL – $17/$253 = 6.71% Return

As we said earlier, 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 October portfolio produced $91 of total income after investing just $1,907 in margin. That means we saw a total portfolio return of 4.77% this month. As we usually point out, our calculations assume that you enter just 1 (ONE) contract for each trading alert – i.e. a total of 4 contracts for the month. Those members with a higher capital base should be entering multiple contract positions each week.

Currently we have a fully invested November income portfolio and are in the middle of building the December portfolio. The outlook for both of these portfolios is extremely positive right now as we are still writing options far away from the market’s current price.

New Trading Alert is AVAILABLE NOW for our Members! If you would like to start seeing these same return in your portfolio, sign up for a membership here.

Enjoy your profits!