I used to trade options almost exclusively, but that has changed over the years. Now I also trade shares short-term and long-term. It is time-consuming to report all of my trades without sharing explicit details from my records, so I share only the parts that are easy to report.
My newest focus is calendar spreads. I speculate on market moves with calls and puts. I trade bullish and bearish spreads. I sell naked puts and calls. I buy my way out of some losing positions, but occasionally take delivery of stock. I sell calls against stock that I own and sometimes buy stock just to sell calls against it. I capture dividends from the stocks I hold surprisingly often.
I trade higher volumes in favorite stocks that pay dividends and lower volumes in others.
My activities follow a rhythm centered on the third Friday of each month when options expire. I offer a summary report of trades following each expiration.
You can learn a lot about my approach by reading the trade reports and the discussion entitled My Tools. You can ask questions by using the Contact form and the comment section of the website.
My average annual gain from trading activities over the past six years has been 1.94 percent, but that detail, while true, is misleading. I gained 29.42 percent in 2009 (the first full year I focused on trading options), 11.60 percent in 2010, and then lost 26.97 percent in 2011, 0.98 percent in 2012, and 3.56 percent in 2013. I broke my three-year losing streak by gaining 2.13 percent in 2014. If I do not perform better in 2015, I will shift a portion of my account over to my Morgan Stanley Wealth Manager unless he does worse than I do in 2015.
Note: I increased leverage significantly to create the large loss during 2011. I was not prepared for the sharp spike in volatility that developed in August, did not understand the requirements of hedging such a large position, and bought my way out of positions at premium prices when I ran out of margin. I learned the hard way that experience with leverage during a trending market is not helpful in dealing with leverage during a big reversal, that my ideas about hedging were totally inadequate, and that Good ‘Til Canceled offers can become problematic. I also learned to keep something in reserve for those times when volatility spikes because that’s the best time to make serious money.
Anyone who wants to learn more about me should visit www.TomDenham.com where I am the main subject.