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Hari Swaminathan
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OptionTiger.com is founded by Hari Swaminathan, an entrepreneur, everyday person and a self-taught Options trader for over 5 years. Hari also writes the blog at OptionTiger.com, an insightful commentary of the most important issues in macroeconomics, investing, trading, Option strategies, Index... More
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  • Holy Grail Options – 3.5% In 2 Weeks 0 comments
    May 21, 2013 12:03 PM | about stocks: ETF

    This post was originally written on May 19, 2013 at http://www.optiontiger.com/holy-grail-options-week2/

    On Friday May 17th, we closed one part of the Holy Grail Options strategy for a profit of $900 in 2 weeks. This is a return of 3.5% on the portfolio, and a 4.5% return on Margin. We'll beopening a new trade on Monday May 20th. Watch both Week 1 and Week 2 videos here.

    To recap the trade parameters - This was a "small account" trade. Our maximum allowable margin on the trade was $25K. We split up this allowable margin into Stock A and Stock B. Stock A took up 5K in Margin, and Stock B took up 15K. We never had to increase our margin for either one of these positions, in fact, our adjustments only ended up reducing the margin. In this month's trading cycle, the market was almost uni-directional, UP. In general, this makes capturing a profit a slower process, especially if the markets grind up slowly. Additionally, when the markets makes a steady move in one direction, the strategy requires a bit more adjustment. In this trade, we had to make 2 adjustments to Stock A and 2 adjustments to Stock B. This is a bit more than usual, but was required to adapt to the market conditions.

    To recap the trade parameters - This was a "small account" trade. Our maximum allowable margin on the trade was $25K. We split up this allowable margin into Stock A and Stock B. Stock A took up 5K in Margin, and Stock B took up 15K. We never had to increase our margin for either one of these positions, in fact, our adjustments only ended up reducing the margin. In this month's trading cycle, the market was almost uni-directional, UP. In general, this makes capturing a profit a slower process, especially if the markets grind up slowly. Additionally, when the markets makes a steady move in one direction, the strategy requires a bit more adjustment. In this trade, we had to make 2 adjustments to Stock A and 2 adjustments to Stock B. This is a bit more than usual, but was required to adapt to the market conditions.

    The complete trade parameters

    - Trade entered on Monday May 5th

    - 2 adjustments to Stock A

    - 2 adjustments to Stock B

    - Neither adjustment increased margin beyond 20K

    - Trade closed on Friday, May 17th on Stock B

    - Booked profit on Stock A = $175

    - Booked profit on Stock B = $700

    - Total profit booked = $875

    - Return on portfolio in 2 weeks = 3.5%

    - Return on margin of 20K = 4.5%

    This is how the Holy grail performs. In general, you can expect at least 2 trades a month on the Holy Grail Options strategy. Last month, we had 4 trades which was unusual, but we booked a 2.5% return on each of the 4 trades. When there is significant movement in the markets in both directions, we can expect to close more trades in the same cycle.

    Watch for the new trade on Monday , May 20th which will be available at the end of the week. This will be Week 3 of the Holy grail Options trading cycle for the month of May.Holy Grail Webinar announcement

    We're starting a Webinar series on the Holy Grail - This will be a Free weekly webinar on Sundays at 8 pm Eastern Time, US. To register for this webinar, please visit this page and register with your name and email. You must register here for the webinar, even if you have registered on OptionTiger already. The Webinar series will start on Sunday, May 26th.

    Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.

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