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Just a quick post here. May 24th this year mark the end of my trading the broad range market to trading just options. Since the beginning of the year, the return has been incredible and that still continues to my options trading in which at one time reach 60%+ in just under two months. However, the perfect storm came very quick and almost my entire profit perished.

I’ve been trading options since last year but since my sole focus on options trading beginning May 24th, the market only returns at about -1.27% for Dow Jones, -3.58% for S&P500, -4.73% for Russel 2000, and +0.71% for NASDAQ while my personal portfolio (exclusively options) although got hit and suffers a very large profit draw down, can still ended up a little over +14% (I use the data from May 24th till August 9th, Friday’s trading session is exempted because we haven’t seen the close at the time of this writing)

Considering the risk involved on trading options and the kind of strategy I used, that return is not stellar and can be viewed as a disappointment. My trading strategy use options solely as the substitute of stock. With options, I can leverage my position so when the stock moved to the same direction as my position, I can make a killing. But the risk is that when the stock moved against your position, the risk will be amplified several times compared to if you just bought the stock. And with this “perfect storm”, that directional strategy proven to be almost useless (because as you can see the chart above, the market whipsawing to a different direction almost each day).

So I’ve decided to take a break from trading for a while at least until mid-September because I have a trip scheduled early Sept. In the mean time, I’m going to enhance my trading strategy (well, not the strategy per se, it’s more the stock scan, entry, and exit) and clean up this blog (there’s a new design on the way by Jauhari for this site). Less time for trading meaning more time for me to write on this blog (including the experience I gained from my -almost- 3 years of trading). See you on the next post!

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