Finally Results!

After all that procrastination I have my 2009 performance on Excel. It includes all commission deductions, wash sales, and expired options. What it does not include is the reduction of profit after taxes. (Technically I am still in the red so no taxes on loses yet.) I know I am still in the red but since April I have been hooked to a particular option spread that has brought me consistent gains. More on that in a later post. Now just look below to see how I have fared so far this year.

I began trading options around Nov '08 and haven't returned to trading actual stock shares ever since. Although I love options I have also had my worst ever losses with them. The main reason for the loses was my inability to factor in time decay. Me as a beginner thought naively that if I purchased an option worth $0.10 and sell it at a $1.00 I would make a 1000% profit. What I did not consider was the amount of time I had in order for the option premium to reach $1.00 before expiration. There lies my misunderstanding for option trades. When you pay to purchase an option and it expires out of the money, you get zip-poo in return. Nothing. Zero. Nada. A big fat O. So I did that for about the first five months of my option trading experience and racked in an amazing loss of over $30k. (How stupid is that? Probably ranks in the top 10 of all stupid things I did in my lifetime to date.) The chart above only covers year '09 but I had some terrible option trades in '08 too. The chart of my overall performance including 2008, the year I started trading is important to me. Important to me in many ways such as learning not to repeat the same mistakes and the fact that even if I hit any significant profit for 2009 it would still be overshadowed by the losses of '08. Hence I still have work to put together my overall lifetime performance results. That will be for another post.