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White Christmas Portfolio – Goaaaaalll!!!

Looks like we’ll be having a green Christmas this year!

Congratulations to all who played along with our latest virtual portfolio as we couldn’t have made 33 better trades in a month as we blasted past our goal for an 89.4% gain, from $15,000 to $28,415 in just 25 days.  There’s certainly as much luck as skill in getting this kind of result but, since we’re over a month ahead of schedule and ahead of our $25,000 goal – there’s no reason to shut this down and we’ll see how far we can push things through Christmas – on one condition.

In the last update, I put up a link to our NYC Food Bank, where we are fortunate enough to have arranged for matching donations for the next Million Dollars that comes in.  If you should happen to benefit from what you learn following our virtual portfolio – PLEASE take a moment to give something back to the millions who are less fortunate.  It doesn’t have to be the Food Bank – all of our communities have needs and you may find it pleasantly surprising at how good it makes you feel to just walk into a local shelter – hand someone a check and say "Happy Holidays."  

Reach more New Yorkers with a matching gift!

That’s all you have to do.  They may try to hug you (there’s a lot of huggy people working in shelters) but they won’t put you on a list or bug you for money or come to your house – they are just thrilled to make it through a week with enough money to take care of the people who really need it.  Please keep that in mind as this is a particularly hard holiday season for charities – as giving has plunged around the country and needs, obviously, have skyrocketed.  

Thank you.  Now we can get back to our Capitalistic endeavors!  

  • 2 NFLX Nov $67.50 puts sold for $3 expired worthless – up $600
  • 5 DECK Nov $105 calls sold for $6.60 expired worthless – up $3,300
  • 5 SCO Nov $45/48 bull call spreads at $1.10 expired worthless – down $1,100
  • 20 FAS Nov $11 puts sold for .65 (-$1,300) expired worthless – up $1,000
  • 10 SCO Dec $36 calls at net $4.30, out at $5.80 – up $1,500
  • 10 FAS Nov $66 calls sold for net $0, expired worthless – even

Boy did we pick the right time to get bearish this week!  A fantastic net $5,300 (and that’s up from $2,565 the day before as the last of the premium burned out of the options we sold and we got that final drop in oil) gives us a grand total of realized gains of $28,810 – not at all bad off a $15,000 start!   

We are left with just 3 well-balanced open positions heading into the weekend uncertainty so we’re in great position to go with the flow next week but we’re going to be keeping it light and fun into the long Thanksgiving weekend (US markets are closed Thursday and I think Friday is a short day – not sure yet but don’t expect a full day out of me, that’s for sure!).   

As I mentioned before, the realized virtual gains are the result of 33 trade ideas designated for this portfolio, most of which were opened and closed the same day as our goal it to make a quick 20% and get out.  We took trades in both directions and the trades we stuck with longest were, of course, our losers – which we then do our best to work our way out of by rolling or otherwise adjusting the position – which are exactly the techniques we were meant to be practicing in this educational portfolio (see original post).

As we got to the top of our expected range on Tuesday, we dumped the  majority of our longs and, as luck would have it, we hit the big sell-off and that turned our losing shorts into winners and THAT’s why we’re ahead of schedule like this – LUCK is a major factor in getting these kinds of returns and don’t fool yourself into thinking otherwise…

Our remaining open positions are:
  • 10 GNW Jan $5/7.50 bull call spreads at $1.10 ($1,100), now $1.15 – up $50
  • 10 GNW Dec $6 puts sold for .85 (-$850), now .75 – up $100
  • 12 DXD Dec $15/17 bull call spread at net $1.45 ($1,450), now $1.10 – down $420
  • 5 SCO Dec $37 puts sold for net $1.30 (-$1,300), now $1.55 – down $125

Not too terrible for the positions we’re "stuck with", down net $395 gives us an overall balance of $28,415, a $13,415 gain (89.4%) in 25 days!  Keep in mind that it took 33 trades to get here and that costs money too, depending on your broker so it’s critical to use one that has reasonable fees (and good execution).

We do not accept any advertising or commissions from any broker but we have been looking for a good one and (from advertised rates), I see Options House charges $5 up to 5 contracts or $8.50 plus .15 per contract and Trademonster seems to charge a flat $12.50 for up to 20 contracts.  Trade King says $4.95 plus .65 per contract as does Zecco.  It would be nice for Members to share information in the comments below as many have become disenchanted with Think or Swim since the merger with AMTD.  

In our small portfolios, we typically work with less than 20 contracts, usually entering 5 or 10 positions in our first round as we generally want to limit our exposure to no more than 10% of the portfolio on any given trade.  We’ll be back in the saddle, redeploying our virtual cash again next week – trading our way towards a very Merry Christmas.  And this time, let’s all do our best to do something for those less fortunate!

"Goodness is the only investment that never fails."Henry David Thoreau  



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    Sign up today for an exclusive discount along with our 30-day GUARANTEE — Love us or leave, with your money back! Click here to become a part of our growing community and learn how to stop gambling with your investments. We will teach you to BE THE HOUSE — Not the Gambler!

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  1. I have tried several brokers and have stuck with Interactive Brokers for the past two years.  If you are looking for a fancy platform with all kinds of research and charts like TOS, this is not it.  But for affordability, it is great.  They have decent portfolio margin rules if you use it, and their options are around .70 a contract, depending on what you are trading.  Execution speeds seem about the same as others I have tried, customer service is OK.  You can trade futures as well, though I have not tried that yet.  I have been able to purchase most bonds too, and you can access global markets in Europe, Canada, India, Singapore and Australia for fairly reasonable fees.  I have traded from my Droid, though mostly I just use that app to see my portfolio when I can’t get to the computer.  After TOS, you will feel that the interface is clunky, but it is a dependable and cheap platform.  I have also never have troubles with losing trades or not getting in when there have been market crashes.
    I was with Zecco for a year, but on April Fools Day, I checked my account pre-market and suddenly I had $6 million dollars.  (I was trading about $6000 then.)  Someone hacked in and gave about 20 of us a pile of money as a joke, which was corrected by 10 AM, but not before one guy traded and lost money, for which he was held accountable.  I figured if someone could hack in and add, they could also go the other way.  IB is great for security.  I have a cool little number generator on my key chain that goes with my password.  

  2. My family and I thank you Phil for this portfolio.  I’ve done very well following your suggestions.  You neglect to mention that, of the three weeks this portfolio was active, you were away for 10 days and that is perhaps the greatest lesson I will take away from here, that I don’t have to watch the markets every day to make money.  Thank you for that, you have opened up a new way to look at trading for me.  

  3.  I am a customer of Options House and love it!  I used to be a Trade King customer until they effed me over one too many times.

  4. $500 can provide meals for a family of four for a year?  I suppose it’s $1,000 with the match and I wanted you to know I chose that one, Phil, and I did feel good about it.  Also, I wanted to ask Revtodd if there was a web site or address to help support his organization?  

  5. Finally got around to finish my article about timing the market. I backtested the first method over a couple of years with ETF, 3x ETF and options:

  6. Phil—the foodbank is great idea—I am giving in my community,Cleveland — the City Mission and the Cleveland food bank do a great job-as the need is great in each of our own areas—

  7. Well I couldn’t play the WCP due to working all day but I’m giving from the profits made through early morning Oil shorts . I’ll be giving to the Lorain County food bank and the Salvation Army .

  8. Does anyone have the link to JRW s strategy?

  9. As far as trading platforms I do 90% of my trades through IB like Rev Todd said they charge .75 per contract Max if you are above or below the bid ask the price is less.  I love the Book trader  for trading futures and stocks. I but haven’t gotten the spread trader to work right so It is fairly combersome to trade speads one leg at a time. Their isn’t a real good  charting package so I use TOS for charting and trade mypositions in IB book TRader on top of the TOS charts.

  10. Bert—-thanks—I see you are from the Cleveland area—I am from the east side

  11. I have only done a few of the WCP trades and have adapted some for IRA, but all I can say is wow after making money on DECK and USO.

  12. Phil – I did most of the WCP trades but not all. Still made 75% of what you did which lifted my entire portfolio from a 10% loss to a 15% gain for the year. Many heartfelt thank you’s.

  13. Phil – I have a Dec $20 SDS call option (opened before I recently became a member). What do you recommend I do with it? Thanks

  14. like they say in the commercial – IB has Really low margin rates of less than 2%.

    i dont think anyone comes close .

    an account at IB and TOS makes a lot of sense. use tos for tools and ib for more active strategies

  15. Good afternoon!  

    You’re very welcome Bruce, happy to hear it!  

    $500/Dennis – Maybe not a meal you’d be happy with but think hamburger helper, etc.  Beats starving.  Thanks so much for stepping up, in this country, it’s simply a travesty that anyone has to go to bed hungry when restaurants give each diner more food than most families eat for a meal in other countries.  

    Nice article, StJ, thanks! 

    Thanks Savi, Cleveland certainly needs it.

    Thanks Bert! 

    Thanks JMM – Of course, I love trades like DECK (earnings backspreads) but, unfortunately, that one went against us at first and we had to ride it out before risking a new one.  Still, the payoffs are amazing when they work and, as you saw, we can ride out a move against us.  

    Congrats Nicha, great to hear, I’m very happy for you.  Just remember there was a lot of luck involved in getting our timing right this month – it can be very dangerous to have great success if you let your expectations run away with you. 

    SDS/Crussell – Well, I don’t know what you bought it for but we had a nice dip and I guess you did OK.  We don’t like owning calls for very long as you are the sucker paying the premium in that situation – not where we like to be.  You have 30 days and time is ticking down.  At $1.95, they are .80 in premium so that’s what you are spotting SDS so you need a 5% move down (2.5% drop in the S&P to 1,185) to be $1.95 in the money – as soon as you no longer expect that to happen – it’s time to get out of the trade.  You should ALWAYS be aware of numbers like that with your trades – these are not random numbers, you are betting on certain outcomes and the best way to manage your trades is to review whether or not your expectations for each position are realistic on a regular basis.  

    Check out the house porn section of the WSJ.  Personally, I look at these homes and it just reaffirms my belief that there is such a thing as having too much.  Also it’s interesting how, after a certain level – there’s not much left to do other than add more rooms and more art and more expensive furnishings – it’s just stuff in the end…

  16.  Phil: artificial buy writes
    I have several artificial buy writes where premium has melted away and I like the stock long term.  For example ABX Jan 12 10 ea,   long 40 ‘s, short 50′s and short 45 puts. Should I be thinking of rolling the longs to Jan 13, letting the shorts run their course?  I’m not sure what my plan should be.  At this point gain would be about $4,100, close above 50 in Jan and gain would be about twice that and then  would need to start a new position.  Once again I’m less concerned with the specific stock but rather how to adjust similar set-ups as expiration gets closer.   TIA

  17. Savi
    I live Southwest in a small farm town called Wellington( South of Elyria,Oberlin area.  I’m a Field Engineer and work all over Ohio. I was in Wade Park area on Friday.

  18. Holy cow I need to have another kid right away – This boy is so cool, check out the way he breaks down upcoming the football schedule.

  19. @Felipe
    It’s 5 am and the dow futures are off 161.  Would you think that there is an 80% chance that buying the futures now would prove profitable in the next few hours?

  20. 80%/Flips – Wow, I don’t know about 80% but I do like buying the RUT (/TF) on the 700 line and playing for a bounce or the Dow (/YM) off 11,600 or the S&P (/ES) at 1,190 or even gold (/YG) at $1,700 but VERY tight stops because, if those lines fail – we’re on that Highway To Hell I warned about on Friday.