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Kim Klaiman is a full time options trader and founder of SteadyOptions. He trades mostly non-directional strategies, like pre-earnings strangles and iron condors. Likes to trade strategies with negative correlation. He lives in Toronto, Canada. Visit the forum. SteadyOptions... More
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  • SteadyOptions 2012 Performance 54 comments
    Dec 3, 2012 12:48 AM

    SteadyOptions performance has been updated.

    November was a good month for SteadyOptions. We closed 35 trades in November, 20 winners and 15 losers. Total gain in November was $1,000 based on $1,000 allocation per trade. Assuming maximum of 6 trades open (the average number is much lower), that's 16.6% non-compounded gain. The YTD non-compounded ROI is 149.8% based on the same 6 maximum trades. Check out the Performancepage to see the full results. Please note that those results are based on real fills, not hypothetical performance.

    The performance was negatively impacted by two earnings plays that we kept through earnings (AKAM and ADM) and carried from the previous month. Removing those two trades would almost double the performance.

    Like in October, most losers were in the 3-7% range. But we also had few decent size winners (OVTI, ARO, GPS and CF). The ability to keep the losers small remains the key factor.

    We continue expanding the scope of our trades beyond the earnings trades, Iron Condors and calendars. We started playing GLD and added the double calendar as an additional earnings strategy. We closed our second SPY butterfly trade for 39% gain and the GLD strangle for 20% gain. We will continue refining those strategies to get better results. This gives members a lot of choice and flexibility.

    Key statistics 01/01/2012-11/29/2012 (based on $1,000 per play, scalable to any amount):
    • Total trades: 254
    • Winning ratio: 60%
    • Average holding period: 5.5 days
    • Average return per trade: 3.6%
    • Average gain per winning trade: 11.9%
    • Average loss per losing trade: -9.1%%
    • Average number of trades at any given time: 4.3
    • Maximum number of trades at any given time: 6.0
    • Average capital on risk: $4,300
    • Maximum capital on risk: $6,000
    • Cumulative non-compounded return: $8,990 (899.0%)
    Total ROI based on maximum capital on risk: 149.8%

    Please note that those results are based on real fills, not hypothetical performance. Unlike many others who can claim baseless numbers, all my trades are backed up by screenshots with actual fills.

    SteadyOptions subscription is now open to new members for a limited time.

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Comments (54)
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  • Kim,


    How many of the earnings plays were done with weekly options?
    22 Feb 2012, 10:19 AM Reply Like
  • Author’s reply » Every stock that has weeklies was done with weeklies.
    22 Feb 2012, 10:24 AM Reply Like
  • Are those prices included commission ?
    26 Feb 2012, 09:34 PM Reply Like
  • Author’s reply » No.


    Everyone pays different commissions, so it would be impossible to reflect commissions in the results. With cheap broker. commissions should reduce the results by ~1.0-1.2% per trade.
    26 Feb 2012, 10:17 PM Reply Like
  • Thank you very much for your articles. I like them a lot.


    I think that it would be useful and more accurate to include commissions in your results although every broker have different pricing.
    5 Mar 2012, 09:35 PM Reply Like
  • Author’s reply » Like I said, everyone pays different commissions, you can easily calculate what impact your commissions would have on the returns.
    5 Mar 2012, 09:40 PM Reply Like
  • If my math is right, RIC plays average 6.28% while straddles.strangles average 3.26%. In more volatile months, would you expect the straddles/strangles to perform better?
    27 Feb 2012, 03:19 PM Reply Like
  • Author’s reply » Based on my experience, yes.
    27 Feb 2012, 03:32 PM Reply Like
  • Kim, which broker do you use in Canada?


    I'm with OptionsXpress Canada, and I pay $1.50 per leg. If I buy 5 $3.75 RIC, I will pay $30 to open 20 contracts, and another $30 to close them. The RIC needs to appreciate at least $60 in order to profit, which is 3.2%. Is this typical? If not, can you recommend a more commission-efficient Canadian broker?
    29 Feb 2012, 11:55 AM Reply Like
  • Author’s reply » Interactive brokers Canada - 70 cents per contract.
    29 Feb 2012, 12:02 PM Reply Like
  • Kim,


    What is you capital allocation for these trades vs your total portfolio? I am talking about your real portfolio and not a hypothetical 10K.


    Could you please post your actual trades with commissions?
    For example, you made 1.5% on CRM RIC x-commissions but depending on the trade size and broker the same trade may have been lost.
    What was your real result with this trade?


    19 Mar 2012, 11:43 AM Reply Like
  • Author’s reply » Typically my commissions would reduce about 1.0-1.2% from the performance. On RIC it is slightly higher. The CRM RIC was breakeven after commissions. Since the trades are so low risk, I'm actually able to allocate about 10% in my real portfolio. It depends how many other trades I have at that time, it varies from 8% to 12%.


    Commissions are definitely important for those strategies. But it depends on so many factors that it would cause more confusion if I posted the results with commissions.
    19 Mar 2012, 11:53 AM Reply Like
  • Thank you for replying, Kim. I am trying to define optimal allocation parameters for myself and I struggle with the whole "only risk what you can afford to lose" concept, so, please bear with me.


    First of all, 1.0-1.2% can make a big difference if you compound it. Just like in your CRM trade your account was flat instead of being up 1.5%. If you repeat it 10 times, it'll still be flat vs being up 16% hypothetically. Posting results with commissions would add a degree of reality to them. Just make a remark that commissions are for IB.


    As for 10%, is this 10% or account value per trade (max 5 trades?) or 10% for all option trades combine?
    How many option trades (earnings or others) do you typically hold at the same time?


    Do you consider 100% of all your non-cash holdings (options, stocks, etc.) being at risk or only as portion of them? If so what portion?


    Thanks again
    19 Mar 2012, 05:32 PM Reply Like
  • Author’s reply » In your CRM example, lets say you have 100k account and allocate 10% of it to each trade. So you allocate 10k and make 150 before commissions. Repeat it 10 times and you are up 1,500 which is 1.5% (non-compounded), not 15%. So in any case, the difference would not be huge.


    10% is per trade, so the CRM example would apply. If you have 5 trades open, it would allocate 50% of the account. I typically hold 4-5 trades, or 40-50% of my options account. The allocation is based on risk - I know that those trades rarely lose more than 7-10%, worst case scenario maybe 15-20%, so you don't risk more than 2% per trade.
    19 Mar 2012, 06:56 PM Reply Like
  • 150 before commissions could be less than 0 after commissions. 30 contracts per RIC leg, for example, would cost 120*$0.7*2=$168 for a round trip for IB. $150 profit would turn into $18 loss.


    Thank you for the position size verification. I tend to view any option position as a 100% risk, especially considering that it may expire soon.
    20 Mar 2012, 09:42 AM Reply Like
  • Author’s reply » I think with those trades, it is way too conservative. You never hold through expiration, you always sell before earnings. realistically, your risk is about 20-25% maximum.
    20 Mar 2012, 10:48 AM Reply Like
  • What about liquidity risk? Some of these trades have pretty wide bid/ask spreads.
    Also, at what point do you decide that a trade is loser worth closing?
    20 Mar 2012, 11:51 AM Reply Like
  • Author’s reply » I'm trying to trade options which have decent liquidity.


    When I hold 2-5 days, I never lost more than 15-20%, so no stop losses. many times the trade was down 15% and the recovered due to IV increase or stock move.
    20 Mar 2012, 12:05 PM Reply Like
  • Kim,


    What are your overall stats? Could you please share the following:
    - how long have you been trading earnings
    - what is your total number of trades
    - how many of them are winners
    - what is your overall result including commissions for this strategy (% of growth since inception)


    Thank you
    21 Mar 2012, 09:27 AM Reply Like
  • Author’s reply » I started trading this strategy last June. 143 trades so far, 58% winning ratio (83 winners). Average return: 7.0% including commissions. That means that allocating 10% per trade, you would double the account in 9 months. The only losing month was November.
    21 Mar 2012, 09:58 AM Reply Like
  • Great results! Did you in fact double your account in 9 months or what is your real return so far?


    Thank you!
    21 Mar 2012, 11:32 AM Reply Like
  • Author’s reply » I started very small and increased my allocation very gradually till I had full confidence in the strategy. Have I started with 10% allocation, the account would actually more than double if compounding was used.


    During July-August the results were unreal. I was getting 18-20% return per trade. Of course at some point it had to come down to earth, but I still think that with right management, 7-10% over time is doable.
    21 Mar 2012, 11:46 AM Reply Like
  • Kim, with all due respect, you did not answer my question :-(
    Considering all your ups and downs and learning curve, where are you now comparing with your starting balance in June'11? What is your overall ROI?


    Also, how small is very small? What is the smallest position size that can still make 10+% after commissions?


    Thanks again
    21 Mar 2012, 04:06 PM Reply Like
  • Author’s reply » My account included other trades, some of them made money some of them lost, this is not relevant to this specific strategy. The size of the position doesn't really matter for the returns since I don't pay per ticket fee. I'm paying 0.70 per contract. To answer your question, I started with 3-4% allocation per trade.


    Obviously I won't go into my personal account details, but if I had a 10k account and allocated 1k per trade, and traded only those trades, my account would be worth around 20k today, not compounded.
    21 Mar 2012, 04:20 PM Reply Like
  • Thank you for making this clear.


    With 1K per trade, trading straddles or strangles on AAPL, GOOG, or PCLN would be problematic. Do you only do RICs for those?


    21 Mar 2012, 08:30 PM Reply Like
  • Author’s reply » Yes, RIC for higher priced stocks. It also gives me a nice mix of RICs, straddles and strangles. In fact, since in my group there are many people with smaller account, I'm trying to limit the position size to maximum $500-600 per spread, so even guys with 5k accounts can trade those strategies.
    21 Mar 2012, 08:45 PM Reply Like
  • Pl. explain RIC.
    I do lots of option trading, both long and short, in mostly uncovered calls and puts with a medium to long time horizon. It has resulted in very volatile results: up to 100% or more in profit or loss!!!!!!!
    I would like to learn strategies of less volatility with consistent positive returns. (2-3% month is too much to expect?)
    Your suggestions including other links will be appreciated.
    7 Apr 2012, 04:14 PM Reply Like
  • Author’s reply » RIC=Reverse iron Condor.


    Yo might consider joining my Mastering The Non-Directional Trading forum to learn about those strategies. If you want steady and consistent results and reduced volatility, this is exactly what we are doing. Try it for free for one week.
    7 Apr 2012, 04:19 PM Reply Like
  • Kim


    You provide excellent information in your articles. Why not give everyone what they want and include returns with and without commissions? You state that including commissions would be confusing - isn't that like a dictator saying people are too ignorant to be trusted to vote? Try it out and see what happens - if it's mass confusion and markets swoon as a result, you can always stop. I predict it will be helpful to your audience and your business.
    8 Apr 2012, 11:06 PM Reply Like
  • Author’s reply » 9coriolis1,


    My performance numbers include real, not hypothetical fills. In addition, I calculate portfolio value including cash (most of the time the significant portion of the model portfolio is in cash). Very few traders do that. By doing that, I'm already in a huge disadvantage compared to how others report performance.


    Calculating performance with commissions is easy, but everyone has to adjust it to his personal situation.


    As for doing what everyone asks - you can never please everyone. If I include my commissions, there will be always people who will say that they pay more and my performance is still not realistic.
    9 Apr 2012, 04:00 PM Reply Like
  • Kim,


    Why did you not include the 15% allocation this time?
    14 Apr 2012, 10:17 AM Reply Like
  • Author’s reply » I'm trying to be conservative and less confusing. People can definitely allocate 15% when the maximum loss is 25% and only four losses are more than 10%, and it is easy to calculate what the return would be. But if I have 5-6 trades open sometimes plus maybe one IC, I don't feel it's appropriate to present 15% allocation for tracking purposes. I'm going to launch an official subscription service soon and I need to be as transparent as possible for tracking purposes.
    14 Apr 2012, 03:42 PM Reply Like
  • Thank You for the reply. I was just curious. By the way I really like your style of investing and would very much be interested in your service.
    14 Apr 2012, 06:10 PM Reply Like
  • Took the C earnings play with you and did pretty well ~18%. WFC didn't work out well...down ~2.5% on that...otherwise good stuff from your articles. keep them coming!
    14 Apr 2012, 02:34 PM Reply Like
  • My math counts exactly 50 trades that were entered into during the first three months of this year (one earnings cycle). The average return per trade was 3.8% per trade. Assuming this is reduced 1.5% for the cost associated with commissions the return is 2.3% per trade. The average return (2.3%) per trade multiplied by 50 trades is 115%. Therefore the return with this method is 115% whatever someone allocates per trade.


    If an investor allocates 10% of their portfolio every trade they would have returned 11.5% of their portfolio this past quarter.


    If an investor allocates 15% of their portfolio every trade they would have returned 17.3% of their portfolio this past quarter.


    If a particularly risky investor allocates 20% of their portfolio every trade they would have returned 23% of their portfolio this past quarter.


    Quite impressive for non-directional trading.
    14 Apr 2012, 06:23 PM Reply Like
  • Author’s reply » Thanks Mark,


    Your calculations are pretty accurate. My average commissions are around 1.2%, so the return would be slightly higher. However, last three months were actually less successful due to low volatility environment. Since I started trading it in July 2011, the average return was 6.6% after commissions based on 153 trades. Based on conservative 10% allocation, it would give you 101% return on the whole portfolio.
    14 Apr 2012, 09:09 PM Reply Like
  • Thanks. I didn't include your non-earning plays as that may be a cause for any deviation plus I could always make a mistake.


    On a separate note using this techniqueI opened trades on CREE and GS on Thursday and closed them on Friday. I made a solid 10% after commissions on GS and 6.5% on CREE. My limit on GS hit its mark in the morning and I didn't want to hold CREE through the weekend and decided to just take the profit. I'm looking forward to a full earnings season.
    14 Apr 2012, 09:36 PM Reply Like
  • What is a RIC trade?
    16 Apr 2012, 05:06 AM Reply Like
  • Author’s reply » Reverse Iron Condor
    16 Apr 2012, 09:25 AM Reply Like
  • Hi Kim,
    I have some feedback.
    - I really like your performance report as it gives the total picture of your returns when following your suggestions.
    - Also I want to thank you for providing the dividend companies which are probable opportunities and pointing out your successful trading method.
    - I'm interested in your service, however, I don't think I could do the monitoring necessary to get in and out of trades to get similar results as you do. I also work full time. Have you considered offering an automated service which duplicates your trades?
    30 Apr 2012, 04:57 AM Reply Like
  • Author’s reply » Thanks for the feedback nameless1,


    I'm not a fan of autotrading. I think that once the service has too many autotraders, the results will suffer. When too many contracts come at once, market makers start playing games and it will be difficult to get good fills. I know few services which have been doing very well till they started autitrading, and the results started suffering.


    We do however, do some longer term trades like condors and calendars. And even for those earnings trades, you can always place a limit order to sell at predefined profit target.
    30 Apr 2012, 09:13 AM Reply Like
  • Kim, you do a great job with these articles and have worked out a nice approach, but you need to tell people from the outset that it won't work with most brokerages. Typical fees will eat all of your profits and then some -- you'd be losing money. I don't know of a brokerage in the US that charges as little as the deal that you have (0.70 per contract with no set fee.) TD Ameritrade charges 0.75/contract + 9.99 (the 9.99 gets charged only once for straddles, strangles, or spreads). Well, 9.99 is 1% of $1000, which becomes 2% for the round trip. If the per contract fee adds only another 1.2% typically as you have stated, then the deduction is 3.2%. So in 2012, if I had been able to match all your fills, my average gain from 72 trades would be just 0.1%. Yikes -- that's $1 x 72 = $72, for all of that trouble. But it's worse than that if there were many condors, where the set fees are ~$40 per round trip. If one-third of the trades were condors, I would have lost ~$408.
    4 May 2012, 04:43 AM Reply Like
  • Author’s reply » JYucca,


    You are absolutely right that commissions are critical for trading, but this holds for any strategy. In fact, we have a lot of discussions about brokers and commissions on my SteadyOptions forum.


    I don't have any special deal, 0.70 per contract is a standard fee charged by Interactive Brokers. In fact, if you trade many contracts, eOption is even cheaper - they charge 3.00+0.10 per contarct. So for 20 contracts, that's 0.25 per contract. If people insist paying higher fees, there is not much I can do about it.
    4 May 2012, 09:06 AM Reply Like
  • I think if you are going to trade options, you have to shop around a bit. If you are paying a $9-$10 ticket and $0.70 per contract, you are going to be hard pressed to make money unless you are trading a large number of contracts to reduce that ticket price. Interactive Brokers is a good broker at $0.70 per contract and no ticket price, however you have to build at least $10 in commissions per month (they charge you the difference if you don't) and also $30 additional dollars per month in order to not get charged for the live data. Most active traders have no problems racking up $40 in commissions, but still something to think about.


    eOption has decent rates. $3.00+.10. Reviews on Investimonials have not been great, but as long as you can manage your portfolio in a paper account or something like that, it can probably get you by.


    Lightspeed is one that I am thinking about trying out. $.60 per contract, no ticket.


    BTW, Kim. Thank you for your articles, they have taught me much.
    7 Jun 2012, 03:58 PM Reply Like
  • Try interactive brokers.
    28 Jul 2013, 08:58 PM Reply Like
  • Author’s reply » Thanks TRHanson,


    I don't know why people still insist staying with brokers who charge those ridiculous commissions. If more people transferred their business, those brokers would probably adapt. Paying this $10 ticket fee makes a huge difference. Plus IB typically has better fills.
    7 Jun 2012, 04:14 PM Reply Like
  • Kim,
    I follow your strategy for a long time . I think it a very good protential .
    couple of questions :
    1- How many hours per week do you think your strategy requires " I am trying to make sure that I can handle it time wise "
    2- Did you try or some of your followers tried to fill those legs , one leg at a time to get a better pricing . I read some articles about trying to use extrme over bought or oversold on an intraday basis in order to squeeze a little on fills . Please elaborate as much as you can on that .
    Many Thanks


    2 Sep 2012, 09:51 PM Reply Like
  • Author’s reply » Sam,


    We are doing extensive discussions on SteadyOptions on each trade, including potential best timing, price etc. It does require some level of involvement, and if you do it by yourself, it definitely requires 2-3 hours per day to filter the candidates, doing backtesting etc.


    I don't leg in. The whole idea is to trade non-directionally. If I could predict direction, I would probably do better by just trading calls and puts. Sometimes you can save few cents, but you are taking directional risk, and if you are wrong, you can lose much more than gains.


    2 Sep 2012, 10:55 PM Reply Like
  • Kim,


    Thanks for all the invaluable assistance and insight you are providing on SA. I am still working my way through your articles, so I apologize if you have addressed this already, but I have the following questions:


    - Are you delta-hedging when you put on your iron condor or straddle earnings plays? How much delta are you comfortable with, and does the answer depend on the duration of your trades?


    - Do you "backtest" / believe in backtesting? I've read conflicting schools of thought on this, one of which suggests that doing so may only result in curve fitting a system, the other which says there are so many factors which can't practically be modeled that it's a waste of time?


    Thank you.
    12 Nov 2012, 03:05 AM Reply Like
  • Author’s reply » I usually aim to be as delta neutral as possible. If the stock moves, I might roll to the next strike.


    Yes, I do backtest every trade to determine the best time and price to enter. It's not perfect, but it's definitively helpful.
    6 Dec 2012, 02:50 PM Reply Like
  • Kim,


    I've been testing your ideas since mid-September and would like to email the Excel file to you for your comments. Please advise method to send you the file. Thank you.
    5 Dec 2012, 07:48 PM Reply Like
  • Author’s reply »
    5 Dec 2012, 09:02 PM Reply Like
  • I read your article 'my investing strategy for 2012' (
    in which you said that you plan on having about 40% in iron condor/butterflies.
    When looking at the trades in the performance section, I don't see any iron condor/butterflies, only straddles, strangles and rics.
    Do you maintain an iron condor-ish portfolio in addition to or outside of the steady options trades?
    10 Dec 2012, 01:46 PM Reply Like
  • Author’s reply » Are you looking at We did 5 RUT iron condors in 2012. We also did 2 butterflies and few calendars. Those theta positive trades are supposed to balance the earnings trades in terms of theta and vega and they are integral part of the SO portfolio.
    10 Dec 2012, 01:57 PM Reply Like
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