Results – Part 1

• Posted by: stevenplace, July 1st, 2009 at 1:57 pm
• Comments: 0

After posting my performance to the public over the past week, I’ve received questions asking to explain how my trades are set up and how they work. Well, that’s what this post is for. I will go over a couple of my trades with a short explaination of the trade as well as a link to the original post, which will be open to the public.

If you like my style of trading and the strategies put forth, then you should consider subscribing to my service, as we’ve established some pretty strong positions even in this tedious market.

As I’ve said before, there are some trades that I can’t yet release as it would dilute the value to my subscribers, so keep that in mind.

Trade #1 – RUT

As I was starting to establish some bullish positions for our first few trades, I felt that it would be prudent to put a hedge on into expiration just in case the market decides to pullback. Well, it did.

The first trade was to Buy RUT Jun 520/500/490 butterfly. Since the strike difference on either side was not the same, it led to a “broken-wing” butterfly– a bearish hedge.

Once the market pulled back, I decided to move this butterfly into a condor spread. The trade was Sell RUT Jun 510/500 vertical spread. This moved our risk from 3.60 to about .50.

Depending on when you exited, the trade gave us a total gain of +$900 per butterfly, or a 250% gain on our basis.

See trades here and here.

Trade #2 – IYR

I felt that IYR was establishing a range going into the summer, so an iron condor seemed prudent. I found areas of support and resistance that I felt would hold, and established an iron condor with the short legs around those areas.

Here’s the trade: Sell IYR Jul 40/42 30/28 Iron Condor at .67

Since the spread between strikes is 2, that means the total risk is 200 less the credit sold. So we were risking 133 to make 67 per condor. The trade is still open and we’re looking at a gain of +$50, or a 37% return on capital risked.

You can see the trade here.

Trade #3 – AMGN

AMGN was a technical breakout play looking to follow on strength in the biotech sector (IBB). Due to it still being in a downtrend, I didn’t expect to rip higher, so I placed on a calendar spread that was moderately bullish and we could pick up some time decay as well.

Here’s the trade: Buy Jul/Jun 52.5 Call Calendar Spread for 1.25

Our stop for the play was 49, and we almost got stopped out, but we exited near expiration at 1.60. That’s a gain of +$35, or a 28% on our basis. Not the best trade, but still a winner.

You can see the trade here.

That’s all the detailed results for now– I’ll continue this trade summary as long as I continue to make trades. You can view my overall performance (not including position size) here.

If you like the trades I put on (and the gains my subscribers have made) you can join up here for $49.95/month.