September was quite the roller coaster ride for options income.
One week I was up $15,000 and a couple of weeks later I was in negative territory.
It’s amazing how fast options can sway into profit or loss. 😅
I’ve been experimenting with some new strategies recently so any temporary loss will be a lesson for me, lol.
Here is basically a graph representing the accumulated profit/loss from my option trades throughout the month. As you can see it is quite choppy. 🙂
What caught me off guard in September was the vicious decline in stocks. It was the biggest monthly fall in the stock market since March of 2020, which was more than 2 years ago.
I had to roll a lot of weekly trades to not lose money. However, in hindsight I would have been better off just taking the losses.
Going forward instead of trying to be bearish or bullish, I will be more neutral with my trades. Picking a direction, especially short term can be really difficult.
Overall I’m glad September ended with a net credit with my trades. I did pay over $1,000 in trading commissions which is not ideal. But so far it looks like IBKR is still the most cost effective way to trade options.
I’m still trying to find a strategy that can be successful no matter what kind of market we’re in.
Something that’s been helping me is keeping an eye on multiple indexes to gauge where the market might be moving. I look at…
- QQQ – Tech heavy
- SPY – Large cap
- IWM – Small/mid caps
By using all 3 I have a better understanding of overall market sentiment and can make better decisions about whether to buy or sell an option. For example, if only 1 or 2 indexes are showing signs of weakness, then I have less conviction about a bearish trade. And if all 3 indexes are showing relative strength on the same day then I’ll be more willing to make a bullish trade. 🙂
My focus now in October is trying more short term strategies like 0 day to expiration vertical spreads. This basically removes overnight risk so I don’t have to worry about the next day. I look forward to see how these types of trades play out.
Random Useless Fact:
Cooking often requires improvisation.