Yowster 9,297 Report post Posted December 27, 2023 As has become my end of year tradition, I’ve broken down the Steady Options 2023 trade performance by trade type. Numbers were taken directly from the data in the Performance screen. Here’s are this year’s stats along with some comments from my perspective. Where applicable, I added totals from prior years for comparison. 2023 was a year where market volatility was declining for most of the year (as opposed to 2022 where the VIX stayed above 20 for almost the entire year). There were a couple of periods where VIX got into the 20’s, but for most of the year it declined, getting to ~12 by the end of the year – a level not seen since pre-COVID times. This meant RV’s for both calendars and straddles were lower, so we were able to use both of these trades. Pre-Earnings Calendars 65 Trades – 55 win, 9 loss,1 break-even (85% win) – Average Gain +9.56% 2022: 11 trades (64% win) – Average Loss -9.55% 2021: 110 trades (79% win) – Average Gain +12.82% 2020: 33 trades (85% win) – Average Gain +21.97% 2019: 54 trades (65% win) – Average Gain +9.27% 2018: 40 trades (78% win) – Average Gain +9.61% 2017: 31 trades (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: We were able to do a lot of calendar trades again (our 2nd highest yearly total) due to the falling market volatility making more trades look attractive with less downside risk. Very good overall winning percentage. Average gain per trade was down a bit by calendar standards from prior years, but still good. I believe this was due to willingness to take some smaller gains when stock price moved away from strikes and having some shorter-duration trades. Earnings calendars continue to be a core SO strategy. Straddles/Strangles 166 Trades - 104 win, 59 loss, 3 break-even (64% win) – Average Gain +1.65% Breaking down further by hedged and non-hedged: Non-Hedged – 82 win, 49 loss, 3 break-even (62% win), average gain +1.79% Hedged – 22 win, 10 loss (69% win), average gain +1.03% 2022: 148 trades (71% win) – Average Gain +4.89% 2021: 129 trades (68% win) – Average Gain +3.27% 2020: 118 trades (67% win) – Average Gain +2.80% 2019: 106 trades (68% win) – Average Gain +3.58% 2018: 72 trades (83% win) – Average Gain +5.40% 2017: 77 trades (79% win) – Average Gain +5.02% 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: Highest ever number of straddle/strangle trades. Our number of straddle trades, in general, has been ramping up in recent years after the RV analysis tools became available. Overall winning percentage was down a bit, but roughly two-thirds of trades showed a profit of some degree. Average gain per trade was lower than prior years. Years where VIX was in decline for large portions of the year have typically showed smaller average gains. This is because although we find many trades where RV levels look good, we see less large stock price moves and/or RV spikes which means less larger gains. For example, last year when VIX was 20+ for most of the year we had ~40% of trades hit the 10% gain target but this year only ~20% of trades hit that target. From a downside risk perspective, we kept most losses under 10% and no losses were 20% or more. The smaller number of trades hitting 10%+ gains is what hurt the average this year. Very low risk trades as it takes RV dropping much more than their prior cycle tendencies to be significant losers. We haven’t had a trade lose more than 20% in multiple years. RIC trades 34 Trades - 24 win, 10 loss (71% win) – Average Gain +5.47% Comments: We did quite of few of these non-earnings trades on high liquidity stocks this year, and had a very good win rate and average gain per trade. We started by using hedged RICs where we opened a RIC and calendar hedge at the same time. But, after noticing that overall gains coming from the calendar in the minimal stock price move scenario often took until expiration Friday to materialize, we switched to opening only the RIC (although pushing it out a week) which allowed us to hit the 10% gain target on a lesser stock price move. We only added a calendar hedge after about a week if the stock price didn’t move – interestingly, most trades hit the gain target prior to having to add the calendar hedge. We plan on continuing to use this trade going forward. Other Trades SPY Iron Condors: 4 win, 4 loss (50% win) – Average Loss -6.81%. This trade was difficult when VIX was low because IC wings had to be closer to ATM compared to higher VIX times, so it was easier to breach those strikes. We may use this trade again, but likely target entry for times when VIX is higher. Hedged ratios and BWBs: 3 win, 1 loss (75% win) – Average Gain +3.75%. Will likely do more of these now that TrusyJules is contributing official trades as he has a lot of experience with these trades. S&P500 addition date trade: 1 trade which produced a 26.60% gain. This trade, which plays for stock price decline (or at least staying flat) after the S&P500 addition date back-tested very well and our first official trade produced a nice gain. We will likely do trades like this with future S&P500 stock additions. Summary 2023 Steady Options model portfolio was up around +114% for the year. This result was pretty typical for most years – which is nice to say that trades based on SO techniques had such a high return as “typical”. Straddles were smaller winners this year, but the same declining market volatility that caused this also enabled us to open more calendar trades. When one type of trade doesn’t do as well due to market conditions, another type of trade does better so you look to the result of having multiple trade types working in conjunction. As always, I’d like to highlight and thank the SO community. We continue to have a group of very smart people that seems to grow each year who share their ideas and knowledge – this is what makes SO great. Looking forward to 2024. 2022 Year End Performance by Trade Type 2021 Year End Performance by Trade Type 2020 Year End Performance by Trade Type 2019 Year End Performance by Trade Type 2018 Year End Performance by Trade Type 2017 Year End Performance by Trade Type 2016 Year End Performance by Trade Type 2015 Year End Performance by Trade Type 8 1 Share this post Link to post Share on other sites
Kim 7,958 Report post Posted December 27, 2023 Thank you @Yowster for the excellent summary as usual! We continue delivering the most consistent and stable performance 12 years in a row! It's nice to call a 114% return "typical". And the beauty of our trading philosophy is having different strategies in our model portfolio that compliment each other. As I mentioned in one of the discussion topics, our performance reporting is very conservative. We rarely have more than 5 trades open at the same time, but with 5 trades open, you are basically only 50% invested. If you made 10% on the invested capital, we would report as 5% return on the total account. No service is doing it, but this is the only correct way to do it. But it also means that members can invest more than 10% per trade on trades that are more conservative and more liquid. Also there are tons of unofficial trades that don't make it to the official portfolio due to their size.being too large for 10k portfolio. If we reported performance like most other services do (return on investment and not on the whole portfolio), our reported performance would be 300%+. More details: How We Calculate Returns? Thank you again to everyone for their support, and of course special thanks to our contributors @Yowster @krisbee @TrustyJules @cwelsh @Jesse and @SBatch We would like to wish everyone Happy Holidays, Happy New Year and healthy and prosperous 2024! 8 Share this post Link to post Share on other sites
