Lou,
FWIW, I agree with Fred. 5% per month is not achievable in the long run. If you are averaging a 1% increase in portfolio net worth consistently, month after month, in a conservatively managed portfolio, you're doing well, IMnsHO.
Of course, these days, there is a stock out there that's paying a 13% dividend... LOL. But that's only because it used to be a $40 stock paying 3% and now it's a $7 stock.
Bill
--- In ConservativeOptionS
>
> Lou,
>
> There is a direct relationship between risk and reward and imo 5% per month is not sustainable over any extended period of time.
>
> I have found out how to control risk and my returns are based on 87 weeks of trading so far.
>
> Fred
>
>
>
>
> ____________
> From: Louis loupi3@...
> To: ConservativeOptionS
> Sent: Fri, July 2, 2010 2:27:55 PM
> Subject: [ConservativeOption
>
> Â
> Fred,
> I can see that happening, but since I'm just getting started and hoping I'll be able to allow enough wiggle room and keep risk at a mnimum, I haven't had to face that situation yet.
> Although my current goal is 5% monthly, I don't yet know haw practical that will turn out to be, and all other things being equal, I'd be more than happy with 30-40% pa.
> Have you stopped doing condors? Are you getting your results with cc's and csp's?
> Lou
>
> --- In ConservativeOptionS
> >
> > Lou,
> >
> > What went wrong is that the vix at the time was around 50 and when the market went directional the RUT price blew through my short strikes and as I adjusted to the next month the price kept going down so I kept losing more money and bailed.
> >
> > I now enjoy 30-40% annual returns with minimal risk but it took a long time to figure it out...many times the attraction of high monthly yields overcome the pysche of traders and they don't fully realise the risk dangers in trading these spreads.
> >
> > Never again for me...
> >
> > Fred
> >
> >
> >
> >
> > ____________
> > From: Louis loupi3@
> > To: ConservativeOptionS
> > Sent: Thu, July 1, 2010 10:55:56 PM
> > Subject: [ConservativeOption
> >
> > ÂÂ
> > If you care to talk about it, I think we could learn from your experience and your analysis of what went wrong.
> > Lou
> >
> > --- In ConservativeOptionS
> > >
> > > I did a condor trade once using 6 contracts,did the appropriate management moves when the markets turned directional.
> > >
> > > Fred
> > >
> > >
> > >
> > >
> > > ____________
> > > From: Louis <loupi3@>
> > > To: ConservativeOptionS
> > > Sent: Tue, June 29, 2010 11:18:10 PM
> > > Subject: [ConservativeOption
> > >
> > > ÂÂÂ
> > > I finally took a little bite and entered an order for a couple of contracts on a condor. This is my first condor so I just want to get my feet wet without getting nervous.
> > > The details (all July): long put @ 5, short put @ 6, short call @ 15, long call @ 16. Net credit if filled .60 (between bid/ask).
> > > Max profit 60 between 6 and 15; max loss 40 below 5 or above 16; breakevens at 5.40 and 15.60. It appears to be a fairly conservative position.
> > > Two questions I have:
> > > First, how do I figure profit? I'm guessing something like the difference between the short strike exposures (900) divided by the profit or loss, so that if I made the max profit of 60, the profit would be 60/900 or 7%? Somehow that doesn't seem correct. It would intuitively seem to me to be 100%, but if that were the case, how would I figure a $30 profit, or a $20 loss?
> > > Second, what surprises should I be watching for (other than the obvious possible major price swing)?
> > > Lou
> > >
> >
>
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