Weekly Update: January 6, 2016
Weekly Update: January 6, 2016
Yearly Performance Review:
Happy New Year! With the markets off to a tumultuous start to 2016, we’re taking a temporary departure from our normal schedule.
Instead of our normal weekly update, I’m providing a performance review in today’s issue. Analyzing our trades from all of 2015 will highlight the things we did right, and some of the things we did wrong.
So let’s get to it…
During 2015, you received 44 trades (4 of which are still open). Of those 44 trades, 10 achieved a maximum gain in the 100% to 200% range.
As a result, 22% of the trades we made this year have allowed you to at least double your money.
But there’s more…
Another 3 trades achieved maximum gains in the range of 200% to 300%. That means you had 3 opportunities to at least triple the money you risked on premium to enter the trade.
Furthermore, 2 trades achieved a maximum gain in the range of 300% to 400%. In other words, there were two opportunities to quadruple your money.
And finally, one trade ran to a rather hefty gain of 596%!
Add it up and you’ll find 16 of the 44 trades we made this year (36%) allowed you the opportunity to bag outsized gains in the range of 100% to at least 550%.
Now, you may be wondering why I’m using ranges.
To put it simply, I have no idea where you decided to take profits. Grouping our profitable trades into ranges just gives you an idea of what kind of gains you may have achieved.
While I provide profit targets with each trade, they’re merely a guide. The decision of where to collect profits is ultimately up to you. As a result, your performance may differ from what’s provided here.
Now, let’s take it a step further…
An additional 5 trades achieved maximum gains in the 50% to 99% range. And yet another 3 trades achieved gains of 20% to 49%. While these trades didn’t hit our profit targets, or our minimum 100% profit goal, they still gave you the opportunity to make money.
Maybe you profited, maybe you didn’t.
Either way, when you tally all this year’s winning trades, you’ll find 24 achieved a profit of at least 20%.
That’s an overall win rate of 54%.
Of course, that means we had some trades that didn’t work out. 15 of our closed 2015 trades never made it above a 20% gain. We’ll simply chalk all those up in the loss column.
What happened with these trades?
While the thesis was valid, the trades simply didn’t work out in our favor. Either an unforeseen factor sent the stock or commodity ETF in the opposite direction than I expected, or the stock didn’t move in our intended direction quick enough.
Is there a way we can avoid these losses in the future?
While I have a goal of making each trade profitable (and hopefully to the tune of a 100% profit or more), not every trade is going to be a winner. It’s just a fact of life.
Anybody claiming a 100% win rate when trading the markets is full of hot air!
To sum it all up…
Overall, we had a solid 2015 in the Options Profit Pipeline. And you can rest assured I’ll be doing all I can to make performance even better in 2016!
I strongly value your subscription and the trust you place in me to bring you top-notch option trading ideas in the commodity space!
Let’s catch up on our open positions…
Portfolio Highlights:
Just a quick note: I won’t update every open position every update. I focus on the positions with significant news or price movement.
. . . . iShares Gold Trust $IAU January 2016 $12 calls and iShares Silver Trust $SLV January 2016 $18 calls
As long time subscribers remember, we established these long-term gold and silver call positions in January of 2015. With both metals still in the dumps to start 2016 and expiration just a few days away, it’s clear these trades will end up in the loss column.
. . . . Freeport McMoran $FCX February 19, 2016 $9 calls
$FCX is still struggling due to extensive weakness in the copper market. The red metal is still stuck below $2.10 a pound thanks to another dose of poor Chinese economic data released earlier this week.
Remember, $FCX hit our risk control line at $7.50 on December 7th. As a result, only aggressive traders should be holding these calls for a potential rebound.
. . . . Newmont Mining $NEM January 15, 2016 $21 calls
Investors sent $NEM higher the first two trading days of 2016. That’s because the price of gold is rallying due to increasing uncertainty surrounding the strength of the global economy.
We have until the end of next week for this trade to get into gear. Keep in mind, only aggressive investors should still be in these calls since the risk control line at $18.50 was hit on December 14th.
. . . . Southern Company $SO February 19, 2016 $47 calls
$SO is still on a nice upward trajectory despite the dramatic increase in market uncertainty the past few days. In fact, shares of the utility company are now above our $47 strike price and not far from our first profit target at $48.
Keep holding these calls for higher prices in $SO!
. . . . ConocoPhillips $COP January 15, 2016 $57.50 calls
Well folks, the price of WTI crude seems bent on hitting $30 a barrel. As I write this morning, the commodity is down 4.6% to $34.30. And that’s despite a rather bullish report from the EIA report this morning showing a 5.1 million barrel draw for the week of January 1st.
With expiration just around the corner, it looks as though these calls are going to expire worthless. However, as we start the New Year, the oil industry is looking drastically oversold in the face of increasingly bullish data.
Category: Commodity Trading
