Leaderboard

As has become my year-end tradition, I’ve broken down the Steady Options 2021 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. I should highlight up-front that 2021 saw SO’s highest ever yearly Compounded Annual Growth Rate (CAGR) of ~201%. It was a start to a return to a more “normal” market behavior – although VIX did have a few spikes into the 20’s and 30’s, it spent a large portion of the year below 20 which means we were able to do many of the SO standard bread and butter trades like calendars and straddles. Pre-Earnings Calendars 110 Trades – 87 win, 23 loss (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: Highest ever number of calendar trades by a large margin at roughly twice the highest total of prior years. I attribute a large part of this increase to the RV analysis tools we now use all the time. Despite the higher number of trades, both win percentage and average gain per trade were on par with prior years - which means the calendars portion of the overall SO profit was very high this year. Straddles/Strangles (earnings and non-earnings) 129 Trades - 87 win, 40 loss, 2 break-even (68% win) – Average Gain +3.27% Breaking down further by hedged and non-hedged: Hedged – 27 win, 11 loss (71% win), average gain +2.11% Non-Hedged – 60 win, 29 loss, 2 break-even (67% win), average gain +3.75% 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: Note that this data contains both earnings straddles and non-earnings hedged straddle (NEHS) trades. Highest ever number of straddle/strangle trades, up slightly from the number of trades during the last few years. Like calendars, RV analysis tools have helped identify more trades than before these tools were available. The straddle/strangle contribution to the overall SO profit was a yearly high. This is calculated as the number of trades multiplied by the average gain per trade. Hedged straddle average gain was hurt by several larger losses. Digging into these trades showed that they were all trades where we held the long straddles beyond the last short expiration and into earnings week, had the trades been closed on the day of the last short expiration losses would have been much lower. This will be a take-away for me going into 2022, when we have a losing trade as of the last short expiration, if I do hold the trade into earnings weeks I will add shorts to help protect against further RV decline. Very low risk trades as it takes RV levels going much lower than prior cycles for these trades to be significant losers Flys and Verticals 21 trades – 15 win, 6 loss (71% win) – Average Gain +4.81% Comments: New trade type, so no prior year comparisons. Directional, delta positive trades playing for stock price increase. Most trades were hedged. Used to replace call verticals as they handle falling RV better. Ratio Trades 9 trades – 3 win, 6 loss (33% win) – Average Loss -7.96% 2020: 10 trades (70% win) – Average Gain +2.50% 2019: 28 trades (64% win) – Average Gain +2.01% Comments: Poor performance caused by not having enough stock price rise scenarios, or having the gains on the rise offset by RV decline. For delta positive directional trades like this, we switched to unbalanced flys and call verticals, as they handle the scenario of stock price rising coupled with RV falling much better than the call ratios. Index trades (TLT, EEM, SPY, USO, EEM) No index trades this year: 2020: 19 trades (63% win) – Average Gain 9.54% 2019: 20 trades (60% win) – Average Loss -7.71% 2018: 22 trades (86% win) – Average Gain +15.35% 2017: 9 Trades (89% win) – Average Gain +19.72% 2016: 27 Trades (67% win) – Average Gain +3.01% Comments: We didn’t do index trades this year. Not sure if that’s a good thing or a bad thing. Other Trades Only one “other” trade this year. Summary 2021 Steady Options model portfolio gain is around +201% for the year, and as stated earlier it’s the highest yearly return we’ve ever had. While not everyone will be able to match this performance, the key takeaway is that the SO-style trades work – which means learning these trades and “making them your own” is well worth the effort. Again this year, I’d like to highlight and thank the SO community. We really have a bunch of very smart people who share their ideas and knowledge – this is what makes SO great. This year saw many new members make positive contributions to the community. Looking forward keeping things rolling in 2022! 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