I shared in early 2023 that I started a new options trading strategy that can cover the downside (if I get the direction wrong) and capture the upside if all goes well and it is relatively low-risk as compared to other options strategies.
I called it the SOP Strategy and you can read further here:
My Options Trading Strategy For 2023 | Introducing SOP Options Trading Strategy
In this article, I wish to share what are the profits made from this strategy and the success rate on the trade positions that I have closed using the SOP strategy.
Total Profits & Success Rate
There were a total of 84 trades made, with 3 losing trades and 81 winning trades (96.4%). The losses from the 3 losing trades were quite minimal (the highest was USD31) as I closed them because I did not want to wait any further and chose to deploy the reserve capital elsewhere.
I made a total of S$29,400 (USD21,778) in 2023, starting from the end of March 2023 to year-end. The capital that I use ranges from S$50k to S$200k, depending on the number of open positions that I have but I do not have to commit the cash in my brokerage account to open up these positions as I am using a margin account.
However, I do have cash reserves parked elsewhere in bonds that I can activate in case all my SOP positions get exercised early, though that is unlikely to happen as my SELL PUT contracts are OTM instead of ITM, which minimise the early assignment risk.
This Is Not The Wheel Strategy
It is worth noting that this is not the Wheel Strategy. Unlike the Wheel Strategy, I do not have the intent to get assigned or let the options contract expire in the money. Selling Covered CALL after the SELL PUT contract gets assigned has its disadvantages. If the share price plunges, there is hardly any premium left to farm. If the share price moons after the Covered CALL options contract is sold, then the upside is capped by the strike price of the contract.
Concluding Thoughts
Moving forward in 2024, I will still be using the SOP strategy as it is effective if the market continues to rise, stays choppy, stays stagnant, or has a slight drop. The returns may be lower as compared to buying CALL options but you get protected on the downside or when the market stays stagnant, which will eat away the time value of your CALL options contract.
If you wish to be updated on my trades as I make them, you can follow me on my Patreon page as I usually update them on the same day of my trade or the following day. Please only take these trades as a reference and not as a signal to buy/ sell as we are responsible for our decisions, profits, and losses.
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