September 2022 Options Trading Summary | $5,230

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. πŸ˜…

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. πŸ™‚

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. πŸ™‚

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.

Author: Liquid Independence

Editor in Chief at Freedom 35 Blog.

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10/04/2022 5:39 am

Now I know why some restaurants serve hamburger steak!


10/04/2022 12:23 pm

When you are reporting your income, is that gross or net of commissions?
Imagine you were trading options with one of the big 5 or even questrade for that matter?
Also how much margin space do you have in this account, if you don’t mind me asking?

Last edited 1 year ago by Curious
10/05/2022 11:42 am

Hi Liquid, thank you for sharing, good job in Sept!. “in hindsight I would have been better off just taking the losses”. How do you know? In a QQQ bear call spread for instance, what do you do if only the option you sold ends up in the money and the one you bought at a hgher strike expire worthless? Would you take overnight risk and start the next day with a short position in QQQ that you got assigned?

10/09/2022 6:23 pm

Got it πŸ‘thank you.


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