No Lose Stocks / Options Trading 2014 Option Expiration Review

A friend recently asked what returns my options trading system was generating, and I realized I hadn’t done a review of the trades that expired in January of this year (2014).

For some background, I don’t count a trade as a winner/loser until it’s sold, or expires. So I gauge the returns of my system based on all the trades that expire on the same expiration date. So my reporting lags about 2 years, meaning I currently have trades in my portfolio that will expire in 2016. I won’t know until then how well I’m doing now.

Here’s the review of the January 2013 expiration trades.

OPTIONS PURCHASED TO OPEN TRADE

@PG 140118C00080000 $0.4 Jan 22nd, 09:30
@ED 140118C00070000 $0.2 Dec 27th 2012, 09:30
@MCD 140118C00110000 $0.44 Nov 29th 2012, 09:32
@MO 140118C00040000 $0.24 Nov 7th 2012, 09:55
@DUK 140118C00075000 $0.65 Oct 25th 2012, 09:30
@JNJ 140118C00090000 $0.15 Sep 27th 2012, 09:30
@CL 140118C00140000 $0.58 Sep 27th 2012, 09:30
@MO 140118C00045000 $0.22 Sep 24th 2012, 09:31
@KO 140118C00052500 $0.12 Aug 21st 2012, 11:51
@BMY 140118C00042000 $0.28 Aug 10th 2012, 09:30
@PEP 140118C00095000 $0.19 Aug 7th 2012, 14:07
@PAYX 140118C00040000 $0.45 Jun 29th 2012, 09:30
@SLE 140118C00022000 $0.45 Jun 12th 2012, 09:31
@KFT 140118C00050000 $0.49 May 18th 2012, 09:30
@RAI 140118C00055000 $0.3 Mar 23rd 2012, 09:30
@CTL 140118C00050000 $0.4 Mar 19th 2012, 09:31
@VZ 140118C00050000 $0.45 Mar 7th 2012, 09:30
@T 140118C00040000 $0.3 Mar 7th 2012, 09:30
@PFE 140118C00030000 $0.24 Feb 28th 2012, 09:30

OPTIONS SOLD TO CLOSE TRADE

PAYX Jan 18 2014 40.00 Call $1.8 8/5/2013
@JNJ 140118C00090000 $3.5 Jul 15th, 12:38
@DUK 140118C00075000 $2.25 Apr 24th, 15:20
@BMY 140118C00042000 $2.67 Apr 23rd, 09:56
@MDLZ1 140118C00050000 $0.65 Apr 19th, 11:06
@HSH1 140118C00022000 $0.6 Apr 17th, 14:23
@PG 140118C00080000 $2.99 Apr 12th, 09:31
@PFE 140118C00030000 $1.58 Apr 11th, 10:53
@VZ 140118C00050000 $2.41 Apr 11th, 10:52

Summary

I purchased 19 options in the period from Feb 28, 2012 through January 22nd 2013.

I sold 9 options when the underlying stock reached its strike price before the January 2014 expiration date.

That leaves 10 trades that expired worthless.

Note how painful that sounds…I didn’t even win 50% of the time. I was wrong more than half the time. But I don’t watch my portfolio, so I had no idea. I only got the notifications of the wins. And those are quite fun to get.

I purchased to open $6.55 * 100 = $655 in trades, with $5 * 19 = $95 in commissions, (I’m estimating $5 per trade), for a total of $750 paid out.

I sold to close $18.45 * 100 = $1845, with $5 * 9 = $45 in commissions for a total of $1800 in deposits.

That means my return from February 28, 2012 through January 2014 was ($1800 – $750)/$750 = 140%…or roughly 70% per year.

I was wrong more than half the time, but I made more than 70% per year while doing it.

It’s okay to be wrong…what matters is the magnitude of the times you are right, and the minimizing of the pain from the times you are wrong.

Note the opposite could also happen…being right 99% of the time, but those 1% wrong times could wipe you out.

Think And Grow Rich – Chapter 12: The Subconscious Mind: The Connecting Link

Continuing my analysis of Think and Grow Rich.

This is for Chapter 12, The Subconscious Mind: The Connecting Link.

(Go here to start from the beginning.)

Quote and Analysis

“The Subconscious Mind: The Connecting Link”

The “connecting link” is between your conscious mind and Infinite Intelligence. Infinite Intelligence is what provides you with inspired ideas and plans.

Quote and Analysis

“THE SUBCONSCIOUS MIND consists of a field of consciousness, in which every impulse of thought that reaches the objective mind through any of the five senses, is classified and recorded, and from which thoughts maybe recalled or withdrawn as letters may be taken from a filing cabinet.

It receives, and files, sense impressions or thoughts, regardless of their nature. You may VOLUNTARILY plant in your subconscious mind any plan, thought, or purpose which you desire to translate into its physical or monetary equivalent. The subconscious acts first on the dominating desires which have been mixed with emotional feeling, such as faith.

Consider this in connection with the instructions given in the chapter on DESIRE, for taking the six steps there outlined, and the instructions given in the chapter on the building and execution of plans, and you will understand the importance of the thought conveyed.”

In the chapter on Desire (Chapter 2), the six steps are essentially: be specific about what you want, choose something to give in return, choose a date, create a plan (and begin to put it into action), write out a clear and concise statement of these points, and read that statement aloud twice daily before bed and when you awake…and as you read, see and feel yourself already in possession of the money. (Again, it doesn’t have to be “money”, it could be anything you want.)

In doing that last step of reading the written statement aloud, you get the statement via the senses of sight and hearing. Then you “feel” yourself already in possession of it as well…that is you infuse the desire with emotional feeling. So now you have passed this idea through your senses with emotional feeling to your subconscious which means your subconscious will start to act on it and translate the idea into its physical equivalent. That’s why reading it aloud and feeling it matters so much.

Quote and Analysis

“You cannot entirely control your subconscious mind, but you can voluntarily hand over to it any plan, desire, or purpose which you wish transformed into concrete form. Read, again, instructions for using the subconscious mind, in the chapter on autosuggestion.”

The instructions in the chapter on autosuggestion (Chapter 4) are all about taking that written statement, reading it aloud twice a day, and visualizing (“seeing”) yourself already in possession of what you want. And doing this with “FAITH”, which is the emotion of confidence (or belief or certainty) that tells the subconscious to act.

Quote and Analysis

“MAKE YOUR DESIRES CLEAR, AND TO REDUCE THEM TO WRITING.”

If the desires are not clear, then you can’t imagine what they will feel like. By reducing them to writing you make sure they are clear enough. And you can repeatedly review them, day and night. The physical piece of paper will remind you to repeatedly review them.

Quote and Analysis

“You will also understand the necessity of PERSISTENCE in carrying out instructions.”

In autosuggestion (Chapter 4), the point is made that “…the subconscious mind takes any orders given it in a spirit of absolute FAITH, and acts upon those orders, although the orders often have to be presented over and over again, through repetition, before they are interpreted by the subconscious mind.”

So if you don’t do it twice a day. And you don’t persistently invoke belief/confidence/certainty/faith when you do, then you won’t get the results.

Quote and Analysis

“The thirteen principles are the stimuli with which you acquire the ability to reach, and to influence your subconscious mind. Do not become discouraged, if you cannot do this upon the first attempt. Remember that the subconscious mind maybe voluntarily directed only through habit, under the directions given in the chapter on FAITH. You have not yet had time to master faith. Be patient. Be persistent.”

The mastery of faith/belief/confidence/certainty comes through use and practice. Practice is persistently trying to do something even when it’s not working perfectly.

Quote and Analysis

“A good many statements in the chapters on faith and auto-suggestion will be repeated here, for the benefit of YOUR subconscious mind. Remember, your subconscious mind functions voluntarily, whether you make any effort to influence it or not. This, naturally, suggests to you that thoughts of fear and poverty, and all negative thoughts serve as stimuli to your subconscious mind, unless, you master these impulses and give it more desirable food upon which it may feed.”

This is simply a reminder to craft your environment and to weed out sources of negative perspectives like news, negative people, advertising, etc. And conversely to spend more time with positive perspectives.

Quote and Analysis

“The subconscious mind will not remain idle! If you fail to plant DESIRES in your subconscious mind, it will feed upon the thoughts which reach it as the result of your neglect. We have already explained that thought impulses, both negative and positive are reaching the subconscious mind continuously, from the four sources which were mentioned in the chapter on Sex Transmutation.”

Here’s the part where he talks about this in Sex Transmutation (Chapter 11):
“When ideas or concepts flash into one’s mind, through what is popularly called a “hunch,” they come from one or more of the following sources :-

1. Infinite Intelligence

2. One’s subconscious mind, wherein is stored every sense impression and thought impulse which ever reached the brain through any of the five senses

3. From the mind of some other person who has just released the thought, or picture of the idea or concept, through conscious thought, or

4. From the other person’s subconscious storehouse.”

So even if you don’t think something is going to affect you, like say a violent movie, it does. It might be ever so slightly each time, but the cumulative effect builds over time and overwhelms the intentionally positive perspective that you are trying to build.

Quote and Analysis

“For the present, it is sufficient if you remember that you are living daily, in the midst of all manner of thought impulses which are reaching your subconscious mind, without your knowledge. Some of these impulses are negative, some are positive. You are now engaged in trying to help shut oil the flow of negative impulses, and to aid in voluntarily influencing your subconscious mind, through positive impulses of DESIRE.

When you achieve this, you will possess the key which unlocks the door to your subconscious mind. Moreover, you will control that door so completely, that no undesirable thought may influence your subconscious mind.”

So that’s the ability we’re shooting for. A control of our mental attitude so completely that no matter the circumstances we find ourselves in, we feel good, we feel positive. We are able to gloss over and ignore the “negative” influences. (I put negative in quotes because a thing is only negative or positive based on your perception of it. You have the ability to decide if something is negative or positive.)

Quote and Analysis

“All thought impulses, intended for transmutation into their physical equivalent, voluntarily planted in the subconscious mind, must pass through the imagination, and be mixed with faith. The “mixing” of faith with a plan, or purpose, intended for submission to the subconscious mind, maybe done ONLY through the imagination.”

This is again just telling us that we have to imagine ourselves in the situation that we want to be in. We have to think about what our senses would sense in that situation using our imagination. And that imagining makes it feel real and gives us faith/confidence/belief/certainty that it will happen.

Quote and Analysis

“You are preparing yourself to influence and control the “inner audience” of your subconscious mind, in order to hand over to it the DESIRE for money, which you wish transmuted into its monetary equivalent. It is essential, therefore, that you understand the method of approach to this “inner audience.” You must speak its language, or it will not heed your call. It understands best the language of emotion or feeling. Let us, therefore describe here the seven major positive emotions, and the seven major negative emotions, so that you may draw upon the positives, and avoid the negatives, when giving instructions to your subconscious mind.

THE SEVEN MAJOR POSITIVE EMOTIONS

The emotion of DESIRE

The emotion of FAITH

The emotion of LOVE

The emotion of SEX

The emotion of ENTHUSIASM

The emotion of ROMANCE

The emotion of HOPE

There are other positive emotions, but these are the seven most powerful, and the ones most commonly used in creative effort. Master these seven emotions (they can be mastered only by USE), and the other positive emotions will be at your command when you need them. Remember, in this connection, that you are studying a book which is intended to help you develop a “money consciousness” by filling your mind with positive emotions. One does not become money conscious by filling one’s mind with negative emotions.”

BOOM. You are studying a book which is intended to help you develop a “money consciousness” by filling your mind with positive emotions. That’s it. Your whole job is to fill your mind with positive emotions.

And these positive emotions can only be mastered through USE!

So how do you “use” an emotion?

You practice it.

You close your eyes and imagine a situation that fills you with that particular emotion. Do this daily around the same time of day. It’s a kind of meditation. And notice how your body feels, and what position it naturally takes when you feel that way.

For example, when you feel faith/confidence/belief/certainty, you probably put your shoulders back and puff out your chest some.

Then after some days of practicing a particular emotion you won’t need to imagine the situation any more, you’ll just be able to call up the emotion at will or by putting your body in the position that gives you that fosters that feeling.

Then when you are meditating and “feeling” your Definite Chief Aim, the amount of money or whatever it is that you want, you can just call up the faith/confidence emotion and know that that reality is on it’s way.

Quote and Analysis

“THE SEVEN MAJOR NEGATIVE EMOTIONS (To be avoided)

The emotion of FEAR

The emotion of JEALOUSY

The emotion of HATRED

The emotion of REVENGE

The emotion of GREED

The emotion of SUPERSTITION

The emotion of ANGER”

What I find interesting about these is that Faith (Confidence/Belief/Certainty) and Love are enough to put them all down.

Faith/Belief/Confidence conquers Fear, Superstition, Anger, and Greed. If you’re sure you’re going to succeed at your endeavor then there is no Fear. You might be curious about how it’s all going to unfold in your favor given the current circumstances, but there is no doubt that it will, so there’s no fear.

Superstition is a belief that something outside of you has some control over you or your circumstances. Confidence that this is not true erases that.

Anger is just a response to Fear. If you’re angry, then you are fearful that something can do something to you that you can’t stop. If you were confident that you could stop it, or survive it, or even flourish in that circumstance, then there would be no anger.

And finally Greed is the fear that there isn’t enough so you have to hoard it, rather than the confidence/belief/faith/certainty that you can create everything that you need or want.

Love conquers the rest…jealousy, hatred, revenge. These are all attacks on someone or something else. If you have love for all humanity (as the Self-Confidence formula from this book affirms), then you are not jealous, hateful, or vengeful. You simply want everyone to be happy. You have positive intentions toward everyone.

So if you practice the emotions of feeling Faith/Belief/Confidence/Certainty that you will flourish…not just survive, but flourish in whatever circumstances come your way, and you practice Love for all humanity, then you’ve wiped out all the negatives and the only thing you’ll feel are positives. Which brings us to…

Quote and Analysis

“Positive and negative emotions cannot occupy the mind at the same time. One or the other must dominate. It is your responsibility to make sure that positive emotions constitute the dominating influence of your mind. Here the law of HABIT will come to your aid.

Form the habit of applying and using the positive emotions! Eventually, they will dominate your mind so completely, that the negatives cannot enter it.

Only by following these instructions literally, and continuously, can you gain control over your subconscious mind. The presence of a single negative in your conscious mind is sufficient to destroy all chances of constructive aid from your subconscious mind.”

There you go. Confidence and Love will tip the balance in your favor.

Quote and Analysis

“Less than a hundred years ago, men believed the lightning to be evidence of the wrath of God, and feared it. Now, thanks to the power of FAITH, men have harnessed the lightning and made it turn the wheels of industry.”

What I find interesting about this statement is how it shows the idea of turning adversity into advantage, fear as a stepping stone to success. The feared lightning becomes the path forward to abundance for all.

Whatever it is you fear if you confidently stare it in the face and find out what it’s all about, you will likely find something valuable that you can use there. If for no other reason than that everyone else is so scared of it they have never taken the opportunity to figure it out. They’ve always run away before they could understand and harness the opportunity there.

Quote and Analysis

“Moreover, the approach can be made only by the individual himself. Paid prayers are worthless. Infinite Intelligence does no business by proxy. You either go direct, or you do not communicate.”

I’m always looking for shortcuts (or smart-cuts if you will), so this is something I needed to hear in particular.

Quote and Analysis

“The subconscious mind is the intermediary, which translates one’s prayers into terms which Infinite Intelligence can recognize, presents the message, and brings back the answer in the form of a definite plan or idea for procuring the object of the prayer.”

So here’s the expected result. You decide what you want. You believe that it will be yours. That it’s already on its way to you. And you repeatedly review that specific desire. Your subconscious takes that desire, and passes it on to Infinite Intelligence. Infinite Intelligence then passes back a plan or idea about how to go about getting that desire in the most efficient way possible. It might not be the exact way you thought it would or should happen, but it will be the best way. For this reason, when you receive a plan or idea, be open-minded about how it could lead to what you desire…or something even better.