We’re halfway to goal – let’s see if we can double up in two months!
We began this virtual portfolio on June 11th and we ran $10,000 to $26,000 by October 4th, when I decided the risks of paying with our 160% profit in what was getting to be a very choppy market outweighed the potential reward of doubling up again. Two months later, I’m not entirely sure I’ve changed my mind but we’ve had so many nice short-term opportunities lately and we’ve been doing so many short-term, focused trades as we try to keep to cash that I thought this would be an ideal time to sharpen our short-term trading skills and spend time focusing on trades we can all follow and learn from.
The idea of these picks was to find $10,000 worth of small plays that we thought could gain 500% by Jan 21st as part of a larger portfolio. If you can do this with just 10% of a $100K portfolio or 5% of a $200K portfolio, that’s plenty of risk for these uncertain times and it’s a nice 25-50% bonus on the entire portfolio if it works out. Risk can be a component of a conservative portfolio if we wall it off safely. We wanted to increase our shopping budget for Christmas and, while 5x would have been nice, 2.5x in the hand beats 5x in the bush – always keep that in mind as we try to turn $25K into $50K.
What kind of trades were successful last time? It wasn’t really directional trades so much as opportunities, like grabbing BP on the cheap and, of course, our lovely artificial buy/writes like C, which was one of our surviving spreads and should finish off at the December goal of 1,150% profit. Of course we had a better VIX then – we were in the 30s in June and it’s not as simple to make money by just selling options at VIX 22 but it’s better than 18, where we’ve been since early October and that’s one of the reasons I lost my taste for this Portfolio – too much risk and not enough reward with the low VIX!
The lower VIX is a also why we’ve been taking more directional plays in member chat. If it’s a bad time to sell premium, then it’s a better (it’s never good)…
