No Lose Stocks / Options Trading 2016 Option Expiration Review

I don’t sell access to this investing service on this site anymore, but I still trade the recommendations. Since I have all of my previous reviews here, this seems like a good place to keep posting them.

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 2018. I won’t know until then how well I’m doing now.

Here’s the review of the January 2015 expiration trades.

OPTIONS PURCHASED TO OPEN TRADE

Contract $/Contract Buy Date
T Jan 15 2016 45.00 Call $0.57 9/20/2013
PPL Jan 15 2016 45.00 Call $0.15 10/1/2013
LLY Jan 15 2016 70.00 Call $0.76 10/1/2013
JNJ Jan 15 2016 115.00 Call $1.18 10/4/2013
INTC Jan 15 2016 35.00 Call $0.43 10/4/2013
DD Jan 15 2016 85.00 Call $0.78 10/16/2013
MW Jan 15 2016 65.00 Call $0.40 10/31/2013
KO Jan 15 2016 55.00 Call $0.50 11/4/2013
VZ Jan 15 2016 70.00 Call $0.69 11/4/2013
PPL Jan 15 2016 35.00 Call $0.65 11/6/2013
MCD Jan 15 2016 130.00 Call $0.67 11/12/2013
KRFT Jan 15 2016 75.00 Call $0.54 11/12/2013
MW Jan 15 2016 60.00 Call $0.49 11/12/2013
K Jan 15 2016 95.00 Call $0.14 11/12/2013
GE Jan 15 2016 40.00 Call $0.25 11/14/2013
WMT Jan 15 2016 115.00 Call $0.27 11/15/2013
FE Jan 15 2016 50.00 Call $0.35 11/21/2013
MO Jan 15 2016 50.00 Call $0.24 11/25/2013
CSCO Jan 15 2016 32.00 Call $0.40 11/26/2013
GIS Jan 15 2016 70.00 Call $0.57 12/6/2013
KMP Jan 15 2016 105.00 Call $0.31 12/16/2013
PFE Jan 15 2016 45.00 Call $0.41 12/23/2013
WM Jan 15 2016 60.00 Call $0.40 1/3/2014
EMR Jan 15 2016 100.00 Call $0.75 1/3/2014
POT Jan 15 2016 47.00 Call $0.95 1/6/2014
ETP Jan 15 2016 75.00 Call $0.40 1/8/2014
AFL Jan 15 2016 95.00 Call $0.67 1/9/2014
TGT Jan 15 2016 85.00 Call $0.56 1/24/2014
TWC Jan 15 2016 165.00 Call $0.50 1/29/2014
KMI Jan 15 2016 50.00 Call $0.26 2/10/2014
PG Jan 15 2016 110.00 Call $0.55 2/13/2014
HD Jan 15 2016 110.00 Call $0.91 2/20/2014
NYCB Jan 15 2016 22.00 Call $0.15 2/20/2014
SWY Jan 15 2016 47.00 Call $0.36 3/6/2014
ETR Jan 15 2016 80.00 Call $0.60 3/6/2014
MAT Jan 15 2016 55.00 Call $0.45 3/11/2014
DUK Jan 15 2016 90.00 Call $0.55 3/14/2014
HON Jan 15 2016 130.00 Call $0.98 3/20/2014
JPM Jan 15 2016 85.00 Call $0.66 3/27/2014
MRK Jan 15 2016 80.00 Call $0.60 3/31/2014
MMM Jan 15 2016 195.00 Call $0.75 4/1/2014
UTX Jan 15 2016 165.00 Call $0.76 4/11/2014
TRV Jan 15 2016 120.00 Call $0.60 4/29/2014
WFC Jan 15 2016 70.00 Call $0.37 5/8/2014
CVX Jan 15 2016 170.00 Call $0.35 5/19/2014
AEP Jan 15 2016 65.00 Call $0.40 5/21/2014
UNP Jan 15 2016 140.00 Call $0.73 6/13/2014
CAG Jan 15 2016 40.00 Call $0.16 6/20/2014
COP Jan 15 2016 110.00 Call $0.70 6/25/2014
USB Jan 15 2016 55.00 Call $0.38 7/18/2014
KMB Jan 15 2016 145.00 Call $0.70 7/22/2014
CL Jan 15 2016 80.00 Call $0.66 8/1/2014
CLX Jan 15 2016 110.00 Call $0.51 8/5/2014
BHP Jan 15 2016 90.00 Call $0.77 9/4/2014
BAX Jan 15 2016 95.00 Call $0.48 9/9/2014
LO Jan 15 2016 75.00 Call $0.67 10/7/2014
PEP Jan 15 2016 120.00 Call $0.73 12/26/2014

OPTIONS SOLD TO CLOSE TRADE

Contract $/Contract Sell Date
PPL Jan 15 2016 35.00 Call $1.45 5/30/2014
ETR Jan 15 2016 80.00 Call $4.80 6/19/2014
INTC Jan 15 2016 35.00 Call $3.57 8/21/2014
MO Jan 15 2016 50.00 Call $2.79 11/10/2014
LLY Jan 15 2016 70.00 Call $4.80 12/2/2014
KMI2 Jan 15 2016 105.00 Call $5.58 12/29/2014
CLX Jan 15 2016 110.00 Call $5.40 1/22/2015
AEP Jan 15 2016 65.00 Call $3.30 1/28/2015
HD Jan 15 2016 110.00 Call $9.15 2/11/2015
KRFT Jan 15 2016 75.00 Call $7.70 3/25/2015
TWC Jan 15 2016 165.00 Call $10.70 5/20/2015
MW Jan 15 2016 60.00 Call $4.80 6/3/2015
CAG Jan 15 2016 40.00 Call $3.90 6/19/2015
MW Jan 15 2016 65.00 Call $4.90 6/22/2015
TGT Jan 15 2016 85.00 Call $4.10 6/23/2015
BAX1 Jan 15 2016 95.00 Call $0.01 12/21/2015
KMB1 Jan 15 2016 145.00 Call $0.01 12/21/2015
RAI1 Jan 15 2016 75.00 Call $1.76 12/21/2015
MCD Jan 15 2016 130.00 Call $0.01 12/21/2015
TRV Jan 15 2016 120.00 Call $0.02 12/21/2015
DD1 Jan 15 2016 85.00 Call $0.01 12/21/2015

Summary

I purchased 57 options in the period from September 20, 2013 through December 26, 2014.

I sold 15 options when the underlying stock reached its strike price before the January 2016 expiration date.

I also sold 6 other options on December 21, 2015 that were worth some small amounts, but would not very likely hit their strike prices before the January 15, 2016 expiration date. I made a mistake when doing this. I entered the trades when the market was closed and chose to “sell at market”. Since some of these were thinly traded and didn’t have any “bids”, they sold for pennies per contract. I probably lost about $200 in value due to that mistake, so not a crazy amount, but enough to help me remember the lesson.

That leaves 36 trades that expired worthless.

I purchased to open $3077/contract in trades, with $5 * 57 = $285 in commissions, (I’m estimating $5 per trade), for a total of $3362/contract paid out.

I sold to close $7876/contract, with $5 * 21 = $105 in commissions for a total of $7771/contract in deposits.

That means my return from September 20, 2013 through January 2016 was ($7771 – $3362)/$3362 = 131%…or roughly 66% per year.

Also note that by 1/28/2015, the winning trades had already paid for all of the trades I would place in this group. Any trades that paid off in the year after that were pure profit.

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.

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