Performance
In September, there were 5 positions, average holding period of 3 days, and only 1 position with a loss. The total return for September was 32%, resulting in $940 realized profit off an initial investment of $2,940. The following summarizes the trades for September.
IWM: This is the Russell 2000 Index ETF. Puts were bought and sold in a single day turnover for a profit. This strategy was used twice to make 45% and 30% returns. The timing was crucial and profits were taken quickly. In the current calamity facing the financial markets, shorting indicies is a simple profitable strategy.
IRF and VSH: Interlink (IRF) and Vishay (VSH) were traded in a MnA arbritrage strategy. As discussed in the previous post, VSH had initiated a hostile bid direct to shareholders for IRF at a significant premium. The strategy was to go long IRF (buying calls) and short VSH (buying puts). Unfortuneatly IRF urged shareholders not to accept the deal and the bid is still on the table. Thus IRF declined and the calls lost a significant amount of value. On the flip side, VSH lost a significant amount since the puts were purchased on 9/11. They stock price slid about 18% from 9/11 to 9/19 and resulted in a 200% return on the puts.
WFMI: Due to declining discretionary consumer funds and other technical indicators WFMI was trending down. Puts were bought on 9/12 very close to the money. Within a day the puts were ITM (In The Money). This position was up 20% but it wasn’t closed. On 9/15, WFMI started trending up after a high volume gap up in early trading. The puts were immediately sold and the position closed for a 15% gain.
October’s goal ROI is 30%.
An excel file can be downloaded containing the same information displayed below.
September – October 2008:
| Ares Trading | |||||||
| September 2008 Closed Positions Realized Profit/Loss | |||||||
| Total Invested: | $2,940 | ||||||
| Total Return: | $3,880 | ||||||
| Realized Profit: | $940 | ||||||
| Realized Profit %: | 31.97% | ||||||
| Total Positions: | 5 | ||||||
| Average Days Held: | 2.80 | ||||||
| Date | Qty | Company | Contract | Strike | Expiration | Price | Cost Basis |
| 9/9/2008 | 5 | IWM | Put | 71 | October 08 | $1.36 | $680 |
| 9/10/2008 | 5 | IWM | Put | 71 | October 08 | $1.97 | $985 |
| Days | 1 | Profit % | 44.85% | Profit | $305 | ||
| 9/10/2008 | 5 | IWM | Put | 71 | October 08 | $1.83 | $915 |
| 9/11/2008 | 5 | IWM | Put | 71 | October 08 | $2.38 | $1,190 |
| Days | 1 | Profit % | 30.05% | Profit | $275 | ||
| 9/11/2008 | 10 | IRF | Call | 22.5 | Septem 08 | $0.35 | $350 |
| 9/15/2008 | 10 | IRF | Call | 22.5 | Septem 08 | $0.10 | $100 |
| Days | 4 | Profit % | -71.43% | Profit | ($250) | ||
| 9/11/2008 | 10 | VSH | Put | 7.5 | October 08 | $0.25 | $250 |
| 9/16/2008 | 10 | VSH | Put | 7.5 | October 08 | $0.75 | $750 |
| Days | 5 | Profit % | 200.00% | Profit | $500 | ||
| 9/12/2008 | 5 | WFMI | Put | 20 | Septem 08 | $1.49 | $745 |
| 9/15/2008 | 5 | WFMI | Put | 20 | Septem 08 | $1.71 | $855 |
| Days | 3 | Profit % | 14.77% | Profit | $110 | ||
Ares Trading is satisfied with September’s performance. The target ROI was 30% and the goal was attained. In addition, positions which were losing value fast were stopped adequately. For the coming month of October the target ROI is going to remain 30%. Ares Trading will focus largely on index ETFs (DIA, SPY, IWM, QQQQ, XLF, XLE, DBC) and also try to exploit the credit crisis which is sinking the financial sector.
August was the first break even month for Ares Trading. Long calls/puts were used to create the following positions: DIA (Bearish), Ford (Bearish), DBC (Bullish), QQQQ (Bullish), XLF (Bullish). Ford, DIA, and QQQQ were traded for a profit, however XLF and DBC trended in the opposite direction. The XLF position was properly exited early at a ~12% loss.
Unfortunately, Ares Trading did not exit the DBC position and let the position sink to ~97% loss. Ares Trading had to take a step back from the markets to reevaluate the trading strategy before opening any new positions. Ares Trading is confident that the lessons learned through the July and August logs will improve trading performance in September. The principal traded in August was $873, resulting in a ~1% loss, the total return was $871. There were 5 positions, and the average holding period was 4 days. The September ROI goal is 30%.
An excel file can be downloaded containing the same information displayed below.
August – September 2008:
| Ares Trading | |||||||
| August 2008 Open Positions Unrealized Profit/Loss | |||||||
| Total Invested: | $873 | ||||||
| Total Return: | $871 | ||||||
| Unrealized Profit: | ($2) | ||||||
| Unrealized Profit %: | -0.23% | ||||||
| Total Positions: | 5 | ||||||
| Average Days Held: | 4.00 | ||||||
| Date | Qty | Company | Contract | Strike | Expiration | Price | Cost Basis |
| 7/25/2008 | 1 | DBC | Call | 40 | August 08 | $1.50 | $150 |
| 7/29/2008 | 1 | DBC | Call | 40 | August 08 | $0.05 | $5 |
| Days | 4 | Profit % | -96.67% | Profit | ($145) | ||
| 7/25/2008 | 1 | DIA | Put | 113 | August 08 | $2.04 | $204 |
| 7/29/2008 | 1 | DIA | Put | 113 | August 08 | $2.98 | $298 |
| Days | 4 | Profit % | 46.08% | Profit | $94 | ||
| 7/25/2008 | 5 | F | Put | 45 | August 08 | $0.34 | $170 |
| 7/29/2008 | 5 | F | Put | 45 | August 08 | $0.45 | $225 |
| Days | 4 | Profit % | 32.35% | Profit | $55 | ||
| 7/25/2008 | 1 | QQQQ | Call | 44 | August 08 | $1.72 | $172 |
| 7/29/2008 | 1 | QQQQ | Call | 44 | August 08 | $1.88 | $188 |
| Days | 4 | Profit % | 9.30% | Profit | $16 | ||
| 7/25/2008 | 1 | XLF | Call | 20 | August 08 | $1.77 | $177 |
| 7/29/2008 | 1 | XLF | Call | 20 | August 08 | $1.55 | $155 |
| Days | 4 | Profit % | -12.43% | Profit | ($22) | ||
June and July had many ups and downs. It was a learning experience with profitable results. Yet, the overall percentage gain would have been far higher if stop-loss trades were executed immediately when bets were wrong. In the future Ares Trading will be using a strict 30% stop-loss to prevent burning vital capital as much asset value.
Out of 7 positions in the month of June and July, 3 were highly profitable, 2 were relatively the same, and 2 were down almost 100%. Yet, Ares Trading was able gain 28% profit based on a principal of less than $2,000. The average holding period was quite high at 23 days. In the upcoming month of August, the target average holding period is 7 days.
An excel file can be downloaded containing the same information displayed below.
June – July 2008:
| Ares Trading | |||||||
| June-July 2008 Positions Realized Profit/Loss | |||||||
| Total Invested: | $1,811 | ||||||
| Total Return: | $2,319 | ||||||
| Realized Profit: | $508 | ||||||
| Realized Profit %: | 28.05% | ||||||
| Total Positions: | 7 | ||||||
| Average Days Held: | 23.29 | ||||||
| Date | Qty | Company | Contract | Strike | Expiration | Price | Cost Basis |
| 6/18/2008 | 5 | PIR | Put | 5 | July 08 | $0.15 | $75 |
| 6/20/2008 | 5 | PIR | Put | 5 | July 08 | $0.52 | $260 |
| Days | 2 | Profit % | 246.67% | Profit | $185 | ||
| 6/18/2008 | 2 | PRGS | Call | 30 | July 08 | $0.70 | $140 |
| 7/11/2008 | 2 | PRGS | Call | 30 | July 08 | $0.05 | $10 |
| Days | 23 | Profit % | -92.86% | Profit | ($130) | ||
| 6/18/2008 | 5 | SJM | Call | 45 | July 08 | $0.28 | $140 |
| 6/20/2008 | 5 | SJM | Call | 45 | July 08 | $1.27 | $635 |
| Days | 2 | Profit % | 353.57% | Profit | $495 | ||
| 6/18/2008 | 1 | ZMH | Call | 70 | Sep 08 | $4.50 | $450 |
| 7/17/2008 | 1 | ZMH | Call | 70 | Sep 08 | $4.70 | $470 |
| Days | 29 | Profit % | 4.44% | Profit | $20 | ||
| 6/18/2008 | 1 | SSL | Call | 60 | July 08 | $2.30 | $230 |
| 7/11/2008 | 1 | SSL | Call | 60 | July 08 | $0.40 | $40 |
| Days | 23 | Profit % | -82.61% | Profit | ($190) | ||
| 4/10/2008 | 2 | CCRT | Put | 7.5 | July 08 | $1.51 | $301 |
| 6/27/2008 | 2 | CCRT | Put | 7.5 | July 08 | $1.52 | $304 |
| Days | 78 | Profit % | 1.00% | Profit | $3 | ||
| 7/11/2008 | 1 | LEH | Call | 15 | July 08 | $4.75 | $475 |
| 7/17/2008 | 1 | LEH | Call | 15 | July 08 | $6.00 | $600 |
| Days | 6 | Profit % | 26.32% | Profit | $125 | ||
February was a great month for Ares Trading. Investing with an initial principal of less than $2,000, the strategy was to focus on broad sector trends and cheap option contracts. Focusing on high-volatility plays, 11 out of 11 positions resulted in profit, averaging 31.6%. The average holding period was around 4 days. An excel file can be downloaded containing the same information displayed below.
February 2008:
| Ares Trading | |||||||
| February 2008 Performance | |||||||
| Total Invested: | $1,864 | ||||||
| Total Return: | $2,453 | ||||||
| Total Profit: | $589 | ||||||
| Total Profit %: | 31.60% | ||||||
| Total Positions: | 11 | ||||||
| Average Days Held: | 4.18 | ||||||
| Date | Qty | Company | Contract | Strike | Expiration | Price | Cost Basis |
| 2/5/2008 | 1 | COF | Put | 50 | March 08 | $4.40 | $440 |
| 2/8/2008 | 1 | COF | Put | 50 | March 08 | $5.40 | $540 |
| Days | 3 | Profit % | 22.73% | Profit | $100 | ||
| 2/5/2008 | 1 | WFC | Put | 30 | March 08 | $1.85 | $185 |
| 2/8/2008 | 1 | WFC | Put | 30 | March 08 | $2.40 | $240 |
| Days | 3 | Profit % | 29.73% | Profit | $55 | ||
| 2/8/2008 | 2 | CQB | Call | 20 | May 08 | $0.95 | $190 |
| 2/14/2008 | 2 | CQB | Call | 20 | May 08 | $1.40 | $280 |
| Days | 6 | Profit % | 47.37% | Profit | $90 | ||
| 2/8/2008 | 1 | WY | Call | 65 | April 08 | $3.25 | $325 |
| 2/11/2008 | 1 | WY | Call | 65 | April 08 | $4.15 | $415 |
| Days | 3 | Profit % | 27.69% | Profit | $90 | ||
| 2/19/2008 | 10 | S | Put | 7 | March 08 | $0.08 | $80 |
| 2/28/2008 | 10 | S | Put | 7 | March 08 | $0.12 | $120 |
| Days | 9 | Profit % | 50.00% | Profit | $40 | ||
| 2/20/2008 | 1 | DBC | Call | 35 | April 08 | $1.43 | $143 |
| 2/26/2008 | 1 | DBC | Call | 35 | April 08 | $1.85 | $185 |
| Days | 6 | Profit % | 29.37% | Profit | $42 | ||
| 2/20/2008 | 1 | QQQQ | Put | 43 | March 08 | $0.96 | $96 |
| 2/22/2008 | 1 | QQQQ | Put | 43 | March 08 | $1.23 | $123 |
| Days | 2 | Profit % | 28.13% | Profit | $27 | ||
| 2/20/2008 | 1 | XLF | Put | 26 | March 08 | $0.82 | $82 |
| 2/22/2008 | 1 | XLF | Put | 26 | March 08 | $0.99 | $99 |
| Days | 2 | Profit % | 20.73% | Profit | $17 | ||
| 2/20/2008 | 2 | ADBE | Call | 37.5 | March 08 | $0.75 | $150 |
| 2/26/2008 | 2 | ADBE | Call | 37.5 | March 08 | $0.85 | $170 |
| Days | 6 | Profit % | 13.33% | Profit | $20 | ||
| 2/26/2008 | 1 | C | Put | 25 | March 08 | $0.90 | $90 |
| 2/29/2008 | 1 | C | Put | 25 | March 08 | $1.54 | $154 |
| Days | 3 | Profit % | 71.11% | Profit | $64 | ||
| 2/26/2008 | 1 | LOW | Put | 25 | March 08 | $0.83 | $83 |
| 2/29/2008 | 1 | LOW | Put | 25 | March 08 | $1.27 | $127 |
| Days | 3 | Profit % | 53.01% | Profit | $44 | ||
An excel file can be downloaded containing the same information displayed above.
