Options Trading Income Report – November/December 2015

127.27
November Net Income
449.53
December Net Income
730.51
Total 2015 Net Income

Just so you know…I had good intentions.

I sat down to write this income report up at the beginning of December and wouldn’t you know it, life interrupted. Nothing tragic, scary, amazing or remarkable…just life.

I will say, my computer hasn’t helped much lately. It’s apparently entered into an early mid-life crisis and decided to show up to work with a pina colada in hand and take many breaks while i’m trying to work on it.

Here’s my “beast” of a trading machine…an ASUS eeePC Netbook.

My eeePC trading machine

My eeePC trading machine

In fact, my eeePC was running so poorly I decided to bust out and rebuild an old gaming PC I built back in the day…like 2005 back in the day.

In fact, I’m writing this article on this machine running Windows XP…yup, you hear me right…XP. But it works! And since I moved just about everything over to Google Docs/Sheets/Drive I don’t really have to worry about compatibility with my old 2000 version of Office…it’s kinda nice!

My current trading setup

My current trading setup

Anyway, I’m sure you’re all just AMAZED at my wicked computer skills and ability to duct tape my operation together…now on to the fun stuff!

 

November’s Trades

November and December were doozies for me. And not in a good way.

I headed into November doing well. I made over $100 bucks and was hoping to break even by the end of the year. Spoiler alert:  it didn’t happen.

I scanned all the usual suspects (CLF, TRN, USO) and saw USO was trading flat for about a month, so I decided to sell a put against it. You can see the details of the trade below, but the short story is I sold the put literally the day before it started its fall to the current level.

Here’s a quick snapshot of the chart from OptionsHouse.

USO Nov 15 Trade

USO Nov 15 Trade

The little “T” at the top of the hill in the middle of the chart is the trade I made. Should I have made this trade? No.

Take a look at the Slow Stochastic indicator I have set up.

USO trade w/slow stoch graph

USO trade w/slow stoch graph

You see, the blue line was moving to a peak (overbought signal) prior to my trade and even the Momentum (red line) is nearing a recent peak level. I don’t have my trading plan for USO uploaded (sorry), but it’s similar in nature to how I trade CLF and TRN.

I should sell puts when the Slow Stochastic is registering an oversold signal (at the bottom), not overbought (at the top)…bad move. So, the market decided to teach me a lesson and promptly have USO drop to all time lows over the next few months…awesome.

My other two trades closing in November went more or less according to plan. One against TRN and one for CLF, both closed with a decent profit. Unfortunately neither was enough to cover the USO fiasco.

That’s all right, we’ll just roll into December…

 

December’s Trades

I think I must of just gotten too greedy in December. Had I stuck to what I know, I think it would’ve turned out much better than it did. Two out of four trades were a loss, one was a win and the last more or less broke even…*sigh*.

In an attempt to fix my USO trade, I rolled it out to a December expiration date (the second “T”) which really didn’t help. USO continued its decline to it’s current price today. Since oil has such a bleak picture for the future, I’ve written off attempting to catch up this particular trade.

I have a feeling I would be rolling it for quite awhile trying to make up the difference. All the while eating up my buying power “hoping” for USO to make a good move up…and “hope” for the market isn’t really a good course of action.

On to CLF…

So, I decided with all the good news about CLF selling its Bloom Lake Mine, which was a sucking chest wound for the company, and completely exiting the coal business. I thought the stock would move up. Seemed like a logical move since the company was executing on its plan earlier than most analysts expected.

Against my better judgement I sold an ITM put against CLF anticipating some sort of upward move to degrade the value of the put.

Nope. Nada.

Again looking back at the trade, I should’ve just stuck with my plan…that’s why it’s there. Here’s  screenshot of the CLF chart.

CLF Nov_Dec 15 Trade

CLF Nov_Dec 15 Trade

The third “T” from the right is where I sold the ITM put. Sure the Slow Stoch was heading down, but it wasn’t at the bottom like my trade plan specifies. Again, just poor decision making on my part.

I think some of it may boil down to the fact I’ve become so familiar with CLFs I think I can predict how it will react to news and happenings in the market, but this episode just confirms my lack of understanding.

My trade which went well was a TRN trade. I sold a call against my 100 shares and within just a few days it lost 50% of its value so I decided it buy it back to close out the trade. A good trade, but not near enough to offset my other buffoonery.

The trade which broke even for me was a roll of the previous CLF trade in an attempt to “fix” my earlier mistake. I ended up closing it out when it was near break even because I didn’t want to lock up the buying power any longer and I really didn’t think CLF would correct itself enough to make a difference.

Well, that’s it for my antics over the past two months. Apologies again for taking so long to put this out there. But with my new setup at home, I should be able to push info out on a more consistent basis.

Let me know your thoughts! What trades went well or poorly for you in 2015? What did you learn from them? Keep an eye out for my 2015 wrap up post coming soon!

 

Happy Trading

Patrick

 

Account

November Net Income:  -$127.27

December Net Income:  -$449.53

Total 2015 Net Income:  -$730.51

November’s Trades

Strategy Stock/ETF Option Entry Price Exit Price Commission Net Profit % Gain/Loss # Lots
CSP USO Nov 15 $15 Put $.48 $2.02 -$10.09 -$164.09 -320.83% 1
CC TRN Nov15 $28 Call $.70 $.39 -$10.09 $20.91 44.29% 1
CC CLF Nov 15 $3 Call $.19 $.06 -$10.09 $15.91 68.42% 2

 

December’s Trades

Strategy Stock/ETF Option Entry Price Exit Price Commission Net Profit % Gain/Loss # Lots
CSP CLF Dec 15 $4 Put $1.34 $2.52 -$10.18 -$246.18 -88.06% 2
CSP USO Dec 15 $15 Put $2.05 $4.22 -$10.09 -$227.09 -105.85% 1
CC TRN Dec 15 $28 Call $.51 $.25 -$10.09 $15.91 50.98% 1
CSP CLF Apr 16 $4 Put $2.61 $2.52 -$10.17 $7.83 3.45% 2

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