As I’ve done the past few years, I’ve broken down the Steady Options 2017 trade performance by trade type. Here’s are this year’s stats along with some comments from my perspective. Where applicable, I added totals from prior years for comparison...
2017: 31 Trades – 26 win, 5 loss (84% win) – Average Gain +13.81% 2016: 44 trades (80% win) - Average Gain +15.07% 2015: 51 trades (80% win) – Average Gain +12.67% 2014: 48 trades (71% win) – Average Gain +13.80% 2013: 24 trades (88% win) – Average Gain +20.60% Comments: Again one of our best performing trade types, as it has been for multiple years. Number of trades down a bit from last year, seemed a bit tougher to find good entry prices overall this year. Win rate comparable to prior years, and very high. Pre-Earnings Straddles/Strangles
2017: 77 Trades - 61 win, 16 loss (79% win) – Average Gain +5.02% Breaking down further by hedged and non-hedged:
Hedged – 28 win, 6 loss (82% win), average gain +6.01%
Non-Hedged – 33 win, 10 loss (77% win), average gain +4.24%
2016: 18 trades (72% win) – Average Gain +5.19% 2015: 44 trades (68% win) – Average Gain +2.61% 2014: 74 trades (62% win) – Average Gain +2.54% 2013: 104 trades (57% win) – Average Gain +1.35% Comments: Trade count spiked up significantly this year as hedged straddle trades (beginning in 2nd half of year) gave a lot more trade opportunities. Highest percentage of winning trades ever. Very low risk trades as it takes RV levels going much lower than prior cycles for these trades to be significant losers (only 4 of 77 trades has losses over -10%). No reason to limit the number of these trades that you have on at the same time as big market upturns/downturns will help these trades but they can also be winners during normal market times. Initially, there was some fear that the short hedges may hurt overall performance but thankfully this was not the case as the win% and average gain were both higher than the non-hedged trades. Index trades (RUT, SPY, SPX, TLT)
9 Trades – 8 win, 1 loss (89% win) – Average Gain +19.72%. 2016: 27 Trades (67% win) – Average Gain +3.01% Comments: RUT Broken Wing Condor: 3 win, 1 loss, average gain +6.10% TLT Iron Butterflies: 5 win, 0 loss, average gain +30.62%. Great trade idea on this one. Kudos to @SBatch on this idea, I believe. Longer duration trades, typically open for 30-60 days. VIX-based trades
16 trades – 12 win, 4 loss (75% win) – Average Gain +9.25% Breaking down further by trades for contango and those playing for VIX spikes:
Contango (VXX/SVXY) – 10 win, 0 loss (100% win), average gain +29.70%
VIX spike – 2 win, 4 loss (33% win), average loss -24.83%
2016: 16 trades (56% win) – Average Gain +1.34% Comments: Those trades playing for the continued low volatility were some our best performing trades with 100% wins and average gain near +30%. Those trades playing for VIX spikes were our worst performers – low win% and average loss of near -25%. I view these trades primarily as portfolio hedges, so in that respect the losses are kind of acceptable to me. Other may not view these trades as hedges – but after multiple years of a flat/declining VIX will a small number of upward spikes (and spikes to VIX levels still below 20) saying we are due for a larger VIX spike and opening trades for it sounds foolish to me. I’m sure such a spike will happen at some point in time, but many people have lost a lot of money over the past few years playing for such a large and prolonged spike.
A few post-earnings Iron Condors on FB were both successful at around +30% gains. These trades played for stock price to stay relatively stable after earnings. I’d like to see more of these trades in the future as there appear to be quite a few stocks that have a tendency to stay calm after earnings. The one caveat being that we can’t go overboard and have too many of these open at the same time because large overall market moves can really hurt these trades (unlike straddle trades where such overall market moves will help).
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