We present our ideas here at TheOptionsEdge.Com and in the spirit of full transparency, we track the performance of these ideas in the TOE Trade-Ideas portfolio. In 2016 and 2017 we wrote for Action Alerts Options over at TheStreet.Com. We identify this portfolio as the AAO Trade-Ideas. The following table summarizes the performance of all our ideas since we started publishing in 2016. We have broken up the analysis into three sub-components. (1) Trades that are still open, (2) Trades that were closed so far in 2017, and (3) those trades that were closed in 2016.
Computing returns for options trades in a manner that is comparable to a stock portfolio are somewhat challenging. Some people like to compare gains and losses to the price of the underlying security. By this method, the average annualized return enjoyed was 5.5%. It is worth noting that this method has far less risk as the underlying stock, as the options strategies we use generally have limited risk compared to a stock holding. An alternative method is to compare the gains and losses on the options trades to the Capital at Risk. This method is closer to the risk of holding stocks but it tends to be more volatile. By this measure, the tactical portfolio generated an annualized return of 21.2%.
For more on how we calculate returns, click here.
