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FEATURED STRATEGY

Collect this extra money immediately!

Collect this extra money immediately!This unique income-boosting opportunity allows you to collect up to $1,003 a month in extra government cash. This plan is available to everyone over the age of 18. And because of the way the government views the money that comes from it, your current—or future—Social Security benefits won’t be affected. There’s still time to get your name on the next check run. I’ll show you how here.

 

A Review of My Options Trading Track Record

By Jim Fink on June 27, 2015

I’m not usually one to brag, but I’ve been on a bit of a role inside my private options trading service lately.

In fact, performance has been so good that my marketing department recently created some promotional materials sharing my track record with prospective subscribers. Maybe you’re one of them.

If that’s the case, the following table and subsequent explanation are here for you to see exactly where those performance numbers came from. My numbers are based on 1 contract per options trade, while our promotional materials use a 10 contract amount. Ultimately it’s up to the individual how many contracts they decide to trade.

To summarize, through June 19th, 2015, total income received has been $30,310 and net profit is $28,708 (excluding commissions). With interest rates so low, I conservatively assume that interest income from cash balances is zero. To generate a rate of return, just divide the $28,708 in net profit by the $275,981 in total money at risk (adding up the money at risk for all the individual trades) and the result is 10.40 percent.

Since the S&P 500 ETF (SPY) gained 57.58 percent over the same 50-month (1520 day) period, the OFI portfolio trailed the S&P 500 by 47.18 percent (10.40% – 57.58%). But the raw performance number for OFI is unrealistic because it assumes that cash devoted to a trade is never re-deployed. After investing $33,900 selling an Apple put naked, would you simply keep the cash uninvested after the put expired worthless for maximum profit? No, you would re-invest that $33,900 cash in a new trade! Consequently, the 10.40 percent raw return for the OFI portfolios over the past 1520 days significantly understates OFI’s true profit-generating power.

The average trade duration in OFI is 138.11 days, which remains far less than half a year, so if you want to simulate cash reinvestment, multiply the 10.40 percent OFI 1520-day return by 11/01 (1520/138.11) to get a more-realistic 114.48 percent return with recycled cash. Including dividend reinvestment for the S&P 500 increases its return to 71.89 percent, but that is 42.59 percent lower than OFI’s cash-reinvested return. To be fair, many OFI members recommend a 25% cash reserve to take into account trade adjustments such as spread widenings and debit rolls, so a more-conservative OFI return would be 75% of the 114.48 percent figure, or 85.86 percent, but that still outperforms the S&P 500 by 14 percentage points.

 

Portfolio

Raw 1520-Day Rate of Return:

4/21/11 to 6/19/15

Including Cash Reinvestment

Options for Income

10.40%

114.48%

S&P 500

57.58%

71.89%

OFI Relative Performance

-47.18%

+42.59%

 

Here’s a list of all trades we’ve completed. These amouts are based on a single contract for each trade.

 

Options Portfolio Performance April 21, 2011 to June 19, 2015

 
 
 
   
 

Underlying Stock

Date Initiated and End Date (if any)

Trade Duration (actual or until expiration)

Investment at Risk

Net Income Received

Unrealized Gain or Liability

Net Profit

 

MetLife

4/21/11 to 7/8/13

809

$4,030

$274

N/A

$274

 

Exelon

4/28/11

2094

$1,100

($1,100)

$360

($740)

 

Casey’s General Stores

5/1/11 to 9/17/11

139

$3,815

$295

N/A

$295

 

Molson Coors No. 1

5/4/11 to 4/20/13

717

$4,300

$1,060

N/A

$1,060

 

Berkshire Hathaway Class B No. 1

5/5/11 to 3/17/12

317

$7,630

$680

N/A

$680

 

Stericycle No.1

5/12/11 to 8/18/12

464

$690

$255

N/A

$255

 

Crown Holdings

5/26/11 to 1/19/13

604

$3,905

$215

N/A

$215

 

United Therapeutics No. 1

6/2/11 to 7/16/11

44

$355

$95

N/A

$95

 

Cisco Systems

6/9/11 to 5/16/13

707

$380

$547

N/A

$547

 

Health Care REIT No. 1

6/9/11 to 3/17/12

282

$860

$385

N/A

$385

 

Celgene No. 1

6/16/11 to 10/22/11

128

$815

$185

N/A

$185

 

Intuit No. 1

6/22/11 to 10/22/11

122

$810

$190

N/A

$190

 

Procter & Gamble No. 1

6/30/11 to 1/21/12

205

$735

$265

N/A

$265

 

Amgen No. 1

7/7/11 to 6/12/12

341

$855

($228)

N/A

($228)

 

Danaher

7/15/11 to 9/22/12

435

$805

$425

N/A

$425

 

Autodesk

7/21/11 to 4/21/12

275

$755

$275

N/A

$275

 

NetEase No. 1

7/28/11 to 3/17/12

233

$770

$440

N/A

$440

 

CME Group No. 1

8/4/11 to 3/17/12

226

$1,620

$380

N/A

$380

 

Petrobras

8/18/11

1982

$954

($779)

$104

($675)

 

CenturyLink

8/25/11 to 10/22/11

58

$490

$110

N/A

$110

 

Apple No. 1

9/1/11 to 11/19/11

79

$33,900

$1,100

N/A

$1,100

 

Hansen Natural (Monster Beverage)

9/1/11 to 12/17/11

107

$7,100

$400

N/A

$400

 

Spectra Energy

9/8/11 to 12/17/11

100

$585

$115

N/A

$115

 

Kansas City Southern

9/22/11 to 12/17/11

86

$475

$225

N/A

$225

 

Gold ETF No. 1

9/29/11 to 11/19/11

51

$665

$135

N/A

$135

 

SPDR S&P 500 ETF No. 1 (bear call spread)

10/6/11 to 5/19/12

226

$922

($327)

N/A

($327)

 

Deere & Co. No. 1

10/13/11 to 12/17/11

65

$629

$121

N/A

$121

 

Medtronic No. 1

10/31/11 to 2/18/12

110

$670

$130

N/A

$130

 

InterDigital

11/3/11 to 1/21/12

79

$640

$360

N/A

$360

 

iShares 20+-Year U.S. Treasury ETF No. 1

11/10/11 to 2/18/12

100

$400

$205

N/A

$205

 

Apple No. 2

11/23/11 to 12/17/11

24

$830

$170

N/A

$170

 

Microsoft

12/1/11 to 6/16/12

198

$395

($265)

N/A

($265)

 

United Therapeutics No. 2

12/7/11 to 2/18/12

73

$580

$170

N/A

$170

 

Apache

12/28/11 to 4/21/12

115

$770

$230

N/A

$230

 

Schlumberger

12/29/11 to 2/18/12

51

$840

$160

N/A

$160

 

Coinstar

1/5/12 to 4/21/12

107

$560

$190

N/A

$190

 

V.F. Corp. No.1

1/12/12 to 5/19/12

128

$795

$205

N/A

$205

 

Flowserve

1/26/12 to 4/21/12

86

$800

$200

N/A

$200

 

Buckle No. 1

2/2/12 to 9/22/12

233

$600

$250

N/A

$250

 

Kellogg

2/9/12 to 9/22/12

226

$585

$240

N/A

$240

 

iShares 20+-Year U.S. Treasury ETF No. 2

2/23/12 to 10/20/12

240

$1,000

$145

N/A

$145

 

Lufkin

3/2/12 to 6/22/13

477

$1,374

($209)

N/A

($209)

 

Dominion Resources

3/8/12 to 7/21/12

135

$385

$115

N/A

$115

 

Carbo Ceramics

3/22/12 to 1/19/13

303

$966

$34

N/A

$34

 

Cummins No. 1

3/29/12 to 6/22/13

450

$1,195

$25

N/A

$25

 

United Therapeutics No. 3

4/5/12 to 8/18/12

135

$610

$140

N/A

$140

 

Waters No. 1

4/12/12 to 2/16/13

310

$1,228

$17

N/A

$17

 

Berkshire Hathaway Class B No. 2

4/26/12 to 9/22/12

149

$590

$160

N/A

$160

 

CME Group No. 2

5/3/12 to 9/22/12

142

$800

$200

N/A

$200

 

Procter & Gamble No. 2

5/14/12 to 7/21/12

68

$645

$105

N/A

$105

 

Facebook

5/31/12 to 1/19/13

233

$815

$185

N/A

$185

 

Health Care REIT No. 2

5/31/12 to 9/22/12

114

$620

$130

N/A

$130

 

V.F. Corp. No. 2

5/31/12 to 8/18/12

79

$830

$170

N/A

$170

 

Celgene No. 2

6/7/12 to 10/20/12

135

$820

$180

N/A

$180

 

GNC Holdings

6/14/12 to 9/22/12

100

$799

$201

N/A

$201

 

Simon Property Group No. 1

6/21/12 to 8/18/12

58

$830

$170

N/A

$170

 

Intuit No. 2

6/28/12 to 10/20/12

114

$630

$120

N/A

$120

 

Leucadia National

7/5/12 to 12/21/12

170

$400

$210

N/A

$210

 

Union Pacific  No. 1

7/12/12 to 11/17/12

128

$610

$140

N/A

$140

 

Amazon.com No. 1

7/26/12 to 7/28/12

3

$920

($8)

N/A

($8)

 

LinkedIn No. 1

8/1/12 to 8/4/12

3

$915

$160

N/A

$160

 

Procter & Gamble No. 3

8/2/12 to 10/19/12

79

$630

$120

N/A

$120

 

Roper Industries

8/2/12 to 11/16/12

107

$810

$190

N/A

$190

 

S&P 500 Volatility Index (VIX)

8/9/12

1133

$1,625

($532)

($570)

($1,102)

 

Monster Beverage

8/10/12 to 12/22/12

134

$570

$180

N/A

$180

 

Gold ETF No. 2

8/14/12 to 11/17/12

95

$800

$200

N/A

$200

 

Hewlett-Packard

8/23/12 to 5/18/13

268

$595

$156

N/A

$156

 

Salesforce.com No. 1

8/23/12 to 8/25/12

3

$910

$190

N/A

$190

 

BP Prudhoe Bay Royalty Trust

8/30/12 to 12/22/12

114

$5,970

$530

N/A

$530

 

Lululemon Athletica No. 1

9/6/12 to 9/8/12

3

$700

($325)

N/A

($325)

 

AutoZone

9/18/12 to 9/21/12

4

$930

$160

N/A

$160

 

NuStar Energy LP

9/20/12 to 2/16/13

149

$705

$325

N/A

$325

 

Emerson Electric No. 1

9/25/12 to 1/19/13

116

$495

$105

N/A

$105

 

Energy Transfer Partners No. 1

9/27/12 to 12/22/12

86

$525

$225

N/A

$225

 

Nike No. 1

9/27/12 to 9/29/12

3

$935

$145

N/A

$145

 

BlackRock No. 1

10/3/12 to 1/19/13

108

$795

$205

N/A

$205

 

Occidental Petroleum No. 1

10/12/12 to 2/16/13

127

$555

$195

N/A

$195

 

Chipotle Mexican Grill No. 1

10/18/12 to 10/20/12

3

$925

($850)

N/A

($850)

 

Google No. 1

10/18/12 to 10/20/12

3

$995

($800)

N/A

($800)

 

Monsanto No. 1

10/18/12 to 1/19/13

93

$600

$150

N/A

$150

 

Amazon.com No. 2

10/25/12 to 10/27/12

3

$934

$150

N/A

$150

 

Laboratory Corp. of America No. 1

10/25/12 to 2/16/13

114

$510

$240

N/A

$240

 

Medtronic No. 2

11/1/12 to 2/16/13

107

$495

$105

N/A

$105

 

Becton Dickinson

11/8/12 to 3/16/13

128

$335

$165

N/A

$165

 

Apple No. 3

11/15/12 to 12/22/12

37

$740

$260

N/A

$260

 

Salesforce.com No. 2

11/20/12 to 11/24/12

5

$946

$135

N/A

$135

 

V.F. Corp. No. 3

11/20/12 to 2/16/13

88

$815

$185

N/A

$185

 

NetEase No. 2

11/29/12 to 3/16/13

107

$655

$145

N/A

$145

 

Lululemon Athletica No. 2

12/5/12 to 12/8/12

4

$715

$100

N/A

$100

 

Herbalife

12/6/12 to 5/18/13

163

$805

$250

N/A

$250

 

Priceline.com No. 1

12/13/12 to 4/20/13

128

$720

$280

N/A

$280

 

Intuitive Surgical

12/20/12 to 1/19/13

30

$1,625

$375

N/A

$375

 

Yum! Brands No. 1

12/20/12 to 4/20/13

121

$600

$150

N/A

$150

 

Tractor Supply Co. No. 1

12/26/12 to 4/20/13

115

$375

$125

N/A

$125

 

Clorox No. 1

1/3/13 to 4/20/13

107

$600

$150

N/A

$150

 

Simon Property Group No. 2

1/17/13 to 4/20/13

93

$805

$195

N/A

$195

 

Buckle No. 2

1/24/13 to 3/16/13

51

$570

$180

N/A

$180

 

Dick’s Sporting Goods No. 1

1/24/13 to 6/22/13

149

$380

$270

N/A

$270

 

Amazon.com No. 3

1/29/13 to 2/2/13

4

$920

$165

N/A

$165

 

Express Scripts

1/31/13 to 5/18/13

107

$580

$170

N/A

$170

 

Chipotle Mexican Grill No. 2

2/5/13 to 2/9/13

4

$905

$190

N/A

$190

 

NextEra Energy No. 1

2/7/13 to 6/22/13

135

$610

$140

N/A

$140

 

Praxair No. 1

2/14/13 to 7/20/13

156

$830

$405

N/A

$405

 

DirecTV

2/21/13 to 4/20/13

58

$300

$100

N/A

$100

 

Murphy Oil

2/21/13 to 4/20/13

58

$395

$105

N/A

$105

 

Priceline.com No. 2

2/26/13 to 3/2/13

5

$915

$180

N/A

$180

 

Apple No. 4

3/7/2013 to 5/18/13

72

$795

$205

N/A

$205

 

American Tower No. 1

3/15/13 to 7/20/13

127

$610

$140

N/A

$140

 

Lululemon Athletica No. 3

3/20/13 to 3/23/13

3

$440

$130

N/A

$130

 

Amazon.com No. 4

03/21/13 to 6/22/13

93

$770

$230

N/A

$230

 

Snap-on

3/21/13 to 6/22/13

93

$375

$125

N/A

$125

 

AvalonBay Communities

3/28/13 to 7/20/13

114

$830

$170

N/A

$170

 

Fusion-io

3/28/13 to 7/10/14

469

$1,318

($143)

N/A

($143)

 

Mastercard No. 1

4/4/13 to 5/18/13

44

$825

$175

N/A

$175

 

Sherwin-Williams No. 1

4/4/13 to 5/18/13

44

$800

$200

N/A

$200

 

Baker Hughes

4/11/13 to 7/20/13

100

$395

$105

N/A

$105

 

iShares 20+-Year U.S. Treasury ETF No. 3

4/11/2013 to 12/6/13

239

$1,000

($700)

N/A

($700)

 

Clean Harbors

4/18/13 to 7/20/13

93

$400

$100

N/A

$100

 

Google No. 2

4/18/13 to 4/20/12

3

$920

$165

N/A

$165

 

Best Buy No.1

5/2/13 to 1/18/14

261

$1,125

($225)

N/A

($225)

 

LinkedIn No. 2

5/2/13 to 5/4/13

2

$920

$170

N/A

$170

 

Linn Energy

5/2/13

806

$740

($485)

$105

($380)

 

McDonald’s No. 1

5/9/2013 to 4/19/14

345

$755

$325

N/A

$325

 

SPDR S&P 500 ETF No. 2 (bear calendar spread)

5/14/13

857

$1,218

($562)

$134

($428)

 

Accenture

5/16/13 to 2/21/14

281

$830

$185

N/A

$185

 

Baxter International No. 1

5/23/13 to 8/17/13

86

$370

$130

N/A

$130

 

Health Care REIT No. 3

5/30/13 to 1/17/15

597

$1,060

$200

N/A

$200

 

Covance

6/3/13 to 7/20/13

47

$370

$130

N/A

$130

 

Stericycle No.2

6/6/13 to 8/17/13

72

$370

$130

N/A

$130

 

V.F. Corp. No. 4

6/6/13 to 8/17/13

72

$790

$210

N/A

$210

 

Celgene No. 3

6/13/2013 to 10/19/13

128

$565

$185

N/A

$185

 

Public Storage

6/13/2013 to 9/21/13

100

$790

$210

N/A

$210

 

Regeneron Pharmaceuticals

6/13/2013 to 9/21/13

100

$770

$230

N/A

$230

 

Apple No. 5

6/20/2013 to 9/21/13

93

$770

$230

N/A

$230

 

Franklin Resources

6/27/13 to 8/17/13

51

$395

$105

N/A

$105

 

Simon Property Group No. 3

6/28/13 to 1/18/14

204

$815

$205

N/A

$205

 

Procter & Gamble No. 4

7/5/13 to 7/20/13

15

$420

$80

N/A

$80

 

Tesla Motors

7/11/2013 to 9/26/13

77

$855

($630)

N/A

($630)

 

Precision Castparts

7/12/2013 to 12/21/13

162

$1,545

$455

N/A

$455

 

Allergan No. 1

07/18/2013 to 9/21/13

65

$400

$100

N/A

$100

 

NetFlix

7/18/13 to 8/17/13

30

$775

$225

N/A

$225

 

Amazon.com No. 5

07/25/13 to 7/27/13

3

$935

$140

N/A

$140

 

W.W. Grainger No. 1

7/25/2013 to 9/21/13

58

$720

$280

N/A

$280

 

LinkedIn No. 3

8/1/13 to 8/3/13

2

$940

($155)

N/A

($155)

 

Chubb No. 1

8/5/2013 to 9/21/13

47

$400

$100

N/A

$100

 

Parker Hannifin No. 1

8/6/2013 to 11/16/13

102

$400

$100

N/A

$100

 

Procter & Gamble No. 5

8/8/2013 to 12/21/13

135

$635

$115

N/A

$115

 

Alexion Pharmaceuticals No. 1

08/12/13 to 9/21/13

40

$820

$180

N/A

$180

 

Amazon.com No. 6

08/15/2013 to 10/19/13

65

$790

$210

N/A

$210

 

Nike No. 2

8/15/2013 to 10/19/13

65

$385

$115

N/A

$115

 

Kinder Morgan Energy Partners

8/22/13 to 12/20/14

485

$627

$303

N/A

$303

 

BlackRock No. 2

8/27/2013 to 10/19/13

53

$780

$220

N/A

$220

 

Yum! Brands No. 2

8/29/2013 to 11/16/13

79

$400

$145

N/A

$145

 

Gilead Sciences No. 1

9/5/2013 to 11/16/13

72

$385

$115

N/A

$115

 

iShares MSCI EAFE Index ETF

9/5/2013 to 11/16/13

72

$395

$105

N/A

$105

 

Lululemon Athletica No. 4

9/11/13 to 9/14/13

3

$470

$90

N/A

$90

 

Agilent Technologies

09/12/13 to 11/16/13

65

$500

$100

N/A

$100

 

Union Pacific  No. 2

9/12/2013 to 11/16/13

65

$400

$100

N/A

$100

 

Helmerich & Payne No. 1

9/19/2013 to 12/21/13

93

$395

$105

N/A

$105

 

ProShares Short VIX Short-Term Futures ETF No. 1

9/19/2013 to 2/22/14

156

$685

$320

N/A

$320

 

Advance Auto Parts No. 1

09/23/2013 to 12/21/13

89

$405

$95

N/A

$95

 

Deere & Co. No. 2

9/26/13 to 1/18/14

114

$395

$255

N/A

$255

 

Praxair No. 2

10/3/13 to 11/16/13

44

$370

$130

N/A

$130

 

Sunoco Logistics Partners No. 1

10/3/13 to 11/16/13

44

$380

$120

N/A

$120

 

Allergan No. 2

10/17/13 to 1/18/14

93

$380

$120

N/A

$120

 

Equinix

10/17/13 to 12/21/13

65

$370

$130

N/A

$130

 

Google No. 3

10/17/13 to 10/19/13

3

$940

($800)

N/A

($800)

 

Monsanto No. 2

10/17/13 to 1/18/14

93

$597

$153

N/A

$153

 

Amazon.com No. 7

10/24/2013 to 10/26/13

3

$925

($170)

N/A

($170)

 

BioMarin Pharmaceutical

10/28/13 to 1/18/14

82

$300

$200

N/A

$200

 

BlackRock No. 3

10/31/13 to 1/18/14

79

$810

$190

N/A

$190

 

SolarCity

10/31/13 to 1/18/14

79

$345

$155

N/A

$155

 

W.W. Grainger No. 2

10/31/13

624

$1,626

$544

($818)

($274)

 

Laboratory Corp. of America No. 2

10/31/13 to 5/16/14

198

$940

$60

N/A

$60

 

Honeywell

11/4/13 to 12/21/13

47

$388

$112

N/A

$112

 

Baxter International No. 2

11/7/13 to 2/22/14

107

$400

$100

N/A

$100

 

Energy Transfer Partners No. 2

11/7/13 to 1/18/14

72

$400

$100

N/A

$100

 

Priceline.com No. 3

11/7/13 to 11/9/13

3

$860

$140

N/A

$140

 

Discover Financial Services

11/14/13 to 12/31/13

47

$355

($290)

N/A

($290)

 

Outerwall

11/14/13 to 12/21/13

37

$385

$115

N/A

$115

 

Panera Bread No. 1

11/14/13 to 2/22/14

100

$395

$105

N/A

$105

 

SolarWinds

11/21/2013 to 3/20/15

484

$1,050

$670

N/A

$670

 

Philip Morris International

11/27/13 to 5/17/14

171

$555

$285

N/A

$285

 

Sunoco Logistics Partners No. 2

11/27/13 to 2/22/14

87

$330

$170

N/A

$170

 

Occidental Petroleum No. 2

11/27/13 to 5/16/14

171

$710

$365

N/A

$365

 

Hess No. 1

12/5/13 to 2/22/14

79

$395

$105

N/A

$105

 

HollyFrontier

12/5/13 to 3/22/14

107

$370

$130

N/A

$130

 

Digital Realty

12/12/13 to 7/19/14

219

$700

$390

N/A

$390

 

Noble Energy

12/12/13 to 2/22/14

72

$385

$115

N/A

$115

 

Priceline.com No. 4

12/12/13 to 2/22/14

72

$830

$170

N/A

$170

 

Buckle No. 3

12/19/13 to 9/20/14

275

$390

$280

N/A

$280

 

Google No. 4

12/19/13 to 3/22/14

93

$1,385

$115

N/A

$115

 

IBM

12/19/13 to 2/22/14

65

$385

$115

N/A

$115

 

Dick’s Sporting Goods No. 2

12/26/13 to 3/22/14

86

$395

$105

N/A

$105

 

Halliburton

12/30/13 to 3/22/14

82

$343

$157

N/A

$157

 

Buffalo Wild Wings No. 1

1/2/14 to 3/22/14

79

$345

$155

N/A

$155

 

Tractor Supply Co. No. 2

1/2/14 to 4/17/15

470

$1,105

$40

N/A

$40

 

Mastercard No. 2

1/9/14 to 7/19/14

191

$1,750

$250

N/A

$250

 

Gilead Sciences No. 2

1/13/14 to 3/22/14

68

$370

$130

N/A

$130

 

Brinker International

1/16/14 to 4/19/14

93

$385

$115

N/A

$115

 

Sherwin-Williams No. 2

1/16/14 to 3/22/14

65

$375

$125

N/A

$125

 

Kohl’s Corp. No. 1

1/23/14 to 3/22/14

58

$370

$130

N/A

$130

 

Ralph Lauren

1/23/14 to 3/22/14

58

$350

$150

N/A

$150

 

Clorox No. 2

1/30/14 to 4/19/14

79

$395

$105

N/A

$105

 

The Coca-Cola Company No. 1

1/30/14 to 4/19/14

79

$395

$105

N/A

$105

 

3M No. 1

2/6/14 to 4/19/14

72

$345

$155

N/A

$155

 

Aon

2/6/14 to 4/19/14

72

$385

$115

N/A

$115

 

Allstate

2/13/14 to 4/19/14

65

$325

$125

N/A

$125

 

PPG Industries No. 1

2/13/14 to 5/17/14

93

$380

$120

N/A

$120

 

Dillard’s No. 1

2/20/14 to 5/17/14

86

$350

$150

N/A

$150

 

Ecolab No. 1

2/20/14 to 4/19/14

58

$385

$115

N/A

$115

 

Boeing

2/27/14 to 5/17/14

79

$385

$115

N/A

$115

 

CVS Caremark

2/27/14 to 5/17/14

79

$398

$102

N/A

$102

 

Bed, Bath & Beyond

3/6/14 to 11/22/14

261

$635

$135

N/A

$135

 

Qihoo 360 Technology

3/6/14 to 3/8/14

2

$455

$115

N/A

$115

 

Fastenal

3/13/14 to 5/17/14

65

$400

$100

N/A

$100

 

FireEye

3/13/14 to 3/21/14

8

$375

($335)

N/A

($335)

 

O’Reilly Automotive No. 1

3/13/14 to 5/17/14

65

$395

$105

N/A

$105

 

Johnson & Johnson No.1

3/20/14 to 5/17/14

58

$395

$105

N/A

$105

 

McKesson Corp. No.1

3/20/14 to 6/21/14

93

$735

$265

N/A

$265

 

NextEra Energy No. 2

3/27/14 to 6/21/14

86

$400

$100

N/A

$100

 

The Hershey Company

3/27/14

512

$1,225

($1,225)

$50

($1,175)

 

The Travelers Companies

3/27/14 to 5/17/14

51

$400

$100

N/A

$100

 

Archer-Daniels-Midland

4/3/14 to 8/18/14

137

$837

($332)

N/A

($332)

 

Stratasys

4/4/14 to 9/20/14

169

$900

$100

N/A

$100

 

Amazon.com No. 8

4/10/2014 to 6/21/14

72

$775

$225

N/A

$225

 

Mylan

4/10/14 to 5/17/14

37

$370

$130

N/A

$130

 

Teradata

4/10/14

459

$575

$300

($423)

($123)

 

Deere & Co. No. 3

4/17/14 to 6/21/14

65

$370

$130

N/A

$130

 

EQT Corp.

4/17/14 to 6/21/14

65

$365

$135

N/A

$135

 

Amazon.com No. 9

4/24/2014 to 4/26/14

2

$695

$130

N/A

$130

 

Panera Bread No. 2

4/24/14 to 6/21/14

58

$390

$110

N/A

$110

 

Ulta Salon, Cosmetics & Fragrance No. 1

4/24/14 to 6/21/14

58

$400

$100

N/A

$100

 

Waters No. 2

4/24/14 to 6/20/14

57

$400

$60

N/A

$60

 

Edwards Lifesciences No. 1

5/1/14 to 6/21/14

51

$400

$100

N/A

$100

 

Meritage Homes

5/1/14 to 9/19/14

141

$400

$180

N/A

$180

 

Quest Diagnostics

5/1/14 to 6/21/14

51

$400

$100

N/A

$100

 

FMC Technologies

5/8/14 to 7/19/14

72

$395

$105

N/A

$105

 

Reynolds American

5/8/14 to 8/16/14

100

$360

$140

N/A

$140

 

Ecolab No. 2

5/15/14 to 7/19/14

65

$365

$135

N/A

$135

 

Stericycle No.3

5/15/14 to 8/16/14

93

$385

$115

N/A

$115

 

ProShares Short VIX Short-Term Futures ETF No. 2

5/16/14 to 10/18/14

155

$940

$60

N/A

$60

 

Boston Beer

5/22/14 to 7/19/14

58

$750

$250

N/A

$250

 

Omnicom

5/22/14 to 10/18/14

149

$390

$165

N/A

$165

 

V.F. Corp. No. 5

5/22/14 to 8/16/14

86

$400

$100

N/A

$100

 

Advance Auto Parts No. 2

5/29/14 to 10/17/14

141

$920

($520)

N/A

($520)

 

Amgen No. 2

5/29/14 to 10/17/14

141

$335

$320

N/A

$320

 

Walt Disney No. 1

6/5/14 to 8/15/14

71

$375

($205)

N/A

($205)

 

B/E Aerospace

6/10/14

402

$1,147

($1,147)

$88

($1,059)

 

Dick’s Sporting Goods No. 3

6/12/14 to 9/20/14

100

$370

$130

N/A

$130

 

McDonald’s No. 2

6/12/14 to 6/19/15

372

$850

$335

N/A

$335

 

Procter & Gamble No. 6

6/23/14 to 8/16/14

54

$345

$155

N/A

$155

 

Dillard’s No. 2

6/26/14 to 8/13/14

48

$370

($15)

N/A

($15)

 

Sotheby’s

6/26/14 to 2/20/15

239

$905

$190

N/A

$190

 

Cummins No. 2

7/10/14

435

$1,160

($1,160)

$405

($755)

 

Emerson Electric No. 2

7/10/14

435

$1,085

($1,085)

$222

($863)

 

Ulta Salon, Cosmetics & Fragrance No. 2

7/17/14 to 9/20/14

65

$380

$120

N/A

$120

 

Amazon.com No. 10

7/24/2014 to 7/25/14

2

$455

($332)

N/A

($332)

 

Diageo

7/24/14

358

$900

($900)

$712

($188)

 

Actavis plc

7/31/14 to 9/20/14

51

$335

$165

N/A

$165

 

LinkedIn No. 4

7/31/14 to 8/2/14

2

$455

$100

N/A

$100

 

Amazon.com No. 11

8/7/14 to 9/20/14

44

$400

$100

N/A

$100

 

Celgene No. 4

8/7/14 to 8/15/14

8

$275

($215)

N/A

($215)

 

Nike No. 3

8/14/14 to 10/18/14

65

$390

$110

N/A

$110

 

CME Group No. 3

8/21/14 to 9/20/14

30

$380

$120

N/A

$120

 

Russell 2000 Index

8/21/14 to 9/20/14

30

$390

$110

N/A

$110

 

Buffalo Wild Wings No. 2

8/28/14 to 1/17/15

142

$815

$185

N/A

$185

 

Intuit No. 3

8/28/14 to 9/20/14

23

$385

$115

N/A

$115

 

T. Rowe Price

9/4/14 to 4/17/15

225

$830

$310

N/A

$310

 

Mastercard No. 3

9/5/14 to 1/17/15

134

$585

$165

N/A

$165

 

Helmerich & Payne No. 2

9/11/14

309

$1,090

($90)

($358)

($448)

 

United Parcel Service

9/11/14 to 11/22/14

72

$395

$105

N/A

$105

 

O’Reilly Automotive No. 2

9/18/14 to 11/22/14

65

$380

$120

N/A

$120

 

Royal Caribbean Cruises

9/22/14 to 12/20/14

89

$370

$130

N/A

$130

 

Edwards Lifesciences No. 2

9/25/14 to 10/30/14

35

$325

($305)

N/A

($305)

 

Harley-Davidson

9/25/14 to 11/22/14

58

$380

$120

N/A

$120

 

Parker Hannifin No. 2

9/25/14 to 11/22/14

58

$390

$110

N/A

$110

 

Seattle Genetics

10/2/14 to 12/20/14

79

$400

$100

N/A

$100

 

Yum! Brands No. 3

10/2/14 to 11/22/14

51

$375

$125

N/A

$125

 

Kohl’s Corp. No. 2

10/9/14 to 1/17/15

100

$370

$130

N/A

$130

 

Visa

10/9/14 to 12/20/14

72

$375

$125

N/A

$125

 

Procter & Gamble No. 7

10/16/14 to 12/20/14

65

$355

$145

N/A

$145

 

Phillips 66

10/30/14 to 2/20/15

113

$790

$210

N/A

$210

 

The Coca-Cola Company No. 2

10/30/14 to 12/20/14

51

$500

$100

N/A

$100

 

Best Buy No.2

11/6/14 to 6/19/15

225

$745

$105

N/A

$105

 

SPDR Health Care ETF

11/7/14 to 12/20/14

43

$390

$110

N/A

$110

 

Western Digital

11/13/14 to 12/20/14

37

$400

$100

N/A

$100

 

CBS Corp.

11/20/14 to 12/20/14

30

$390

$110

N/A

$110

 

SPDR S&P 500 ETF No. 3

11/20/14 to 12/31/14

41

$443

$157

N/A

$157

 

Baxter International No. 3

11/26/14

233

$820

($820)

$705

($115)

 

Michael Kors

12/4/14

260

$900

($900)

$5

($895)

 

Sunoco Logistics Partners No. 3

12/4/14 to 2/20/15

78

$400

$100

N/A

$100

 

Hess No. 2

12/11/14 to 2/20/15

71

$345

$155

N/A

$155

 

Cardinal Health

12/26/14 to 2/20/15

56

$395

$105

N/A

$105

 

Dick’s Sporting Goods No. 4

12/31/14 to 3/20/15

79

$385

$115

N/A

$115

 

Zimmer Holdings

1/2/15 to 2/20/15

49

$380

$120

N/A

$120

 

Panera Bread No. 3

1/5/15 to 5/15/15

130

$865

$135

N/A

$135

 

Gold ETF No. 3

1/8/15 to 2/20/15

43

$385

$115

N/A

$115

 

iShares 20+-Year U.S. Treasury ETF No. 4

1/12/15 to 2/20/15

39

$390

$110

N/A

$110

 

Hasbro

1/15/15 to 4/17/15

92

$390

$110

N/A

$110

 

Praxair No. 3

1/15/15 to 4/17/15

92

$380

$120

N/A

$120

 

Walt Disney No. 2

1/20/15 to 2/20/15

31

$405

$95

N/A

$95

 

V.F. Corp. No. 6

1/22/15 to 3/20/15

57

$390

$110

N/A

$110

 

Kohl’s Corp. No. 3

1/22/15 to 3/20/15

57

$370

$130

N/A

$130

 

Crown Holdings

1/23/15 to 3/20/15

56

$395

$105

N/A

$105

 

The Coca-Cola Company No. 3

1/29/15

204

$372

$216

($175)

$41

 

Cognizant Technology Solutions

1/29/15 to 3/20/15

50

$400

$100

N/A

$100

 

Amazon.com No. 12

1/29/15 to 1/31/15

2

$435

($320)

N/A

($320)

 

Priceline.com No. 5

2/5/15 to 3/20/15

43

$380

$120

N/A

$120

 

3M No. 2

2/9/15 to 3/20/15

39

$390

$110

N/A

$110

 

Nike No. 4

2/19/15 to 3/20/15

29

$365

$135

N/A

$135

 

Chubb No. 2

2/19/15

148

$385

$270

($215)

$55

 

GlaxoSmithKline

2/26/15

176

$400

$125

($360)

($235)

 

Foot Locker

2/26/15 to 5/15/15

78

$355

$145

N/A

$145

 

PPG Industries No. 2

2/26/15

176

$855

($855)

$760

($95)

 

SPDR Dow Jones Industrial Average ETF

3/5/15 to 5/15/15

71

$400

$215

N/A

$215

 

Vanguard REIT ETF

3/6/15

196

$665

$245

($510)

($265)

 

Union Pacific No. 3

3/12/15

162

$892

($892)

$157

($735)

 

Campbell Soup Company

3/19/15 to 5/15/15

57

$395

$105

N/A

$105

 

Colgate-Palmolive

3/19/15 to 5/15/15

57

$385

$115

N/A

$115

 

Brown-Forman Class B

3/23/15 to 6/19/15

88

$410

$90

N/A

$90

 

Allstate

3/26/15

113

$411

($411)

$137

($274)

 

SPDR Utilities ETF

3/26/15

176

$395

$230

($237)

($7)

 

Johnson & Johnson No.2

4/2/15 to 5/15/15

43

$397

$103

N/A

$103

 

PepsiCo

4/9/15

99

$387

$113

($39)

$74

 

DTE Energy

4/9/15

99

$360

$140

($455)

($315)

 

American Tower No. 2

4/16/15

92

$380

$120

($60)

$60

 

NextEra Energy No. 3

4/16/15 to 6/19/15

64

$400

$100

N/A

$100

 

Costco Wholesale

4/23/15

85

$340

$160

($404)

($244)

 

Allergan No. 3 (name changed from Actavis plc)

4/23/15 to 6/19/15

57

$360

$140

N/A

$140

 

Edwards Lifesciences No. 3

4/30/15 to 6/19/15

50

$380

$120

N/A

$120

 

McKesson No. 2

4/30/15 to 6/19/15

50

$775

$225

N/A

$225

 

Lululemon Athletica No. 5

5/7/15 to 6/19/15

43

$400

$100

N/A

$100

 

Intuit No. 4

5/7/15

71

$395

$105

($13)

$92

 

Valero Energy

5/7/15

134

$400

$200

($143)

$57

 

ProShares Short VIX Short-Term Futures ETF No. 3

5/14/15

127

$855

$145

($465)

($320)

 

Chevron

5/19/15

122

$760

($760)

$440

($320)

 

S&P 500 Index

5/19/15 to 5/22/15

3

$355

$145

N/A

$145

 

Lennar

5/21/15

92

$400

$150

($126)

$24

 

Molson Coors No. 2

5/26/15

52

$405

$95

($50)

$45

 

Amazon.com No. 13

5/26/15

52

$400

$100

($12)

$88

 

Alexion Pharmaceuticals No. 2

5/28/15

85

$360

$140

($45)

$95

 

Southern Company

6/4/15

78

$378

$122

($181)

($59)

 

Varian Medical Systems

6/4/15

78

$375

$125

($163)

($38)

 

CME Group No. 4

6/11/15 to 6/19/15

8

$405

($340)

N/A

($340)

 

Berkshire Hathaway Class B No. 3

6/18/15

92

$335

$165

($164)

$1

 

TOTALS

 

138

$275,981

$30,310

($1,602)

$28,708

 

 

I am also happy to say that out of the 346 total trade recommendations made through June 19th, 293 have been profitable — a “win rate” of 84.68 percent. Ken Kam of Marketocracy.com, a website that tracks the performance of top investors, has written that “a winning percentage of 66 percent would be excellent and would rank among our best investors on this measure.” So, OFI’s 84.68 percent win rate is above Marketocracy.com’s threshold figure of excellence.

I like to play “what if” by slicing and dicing the OFI portfolio in different ways to see how performance could have been improved. It turns out that put spreads in the “Conservative Income” portfolio are the most successful with an astoundingly-high win rate of 91.14 percent. Boring is beautiful! Selling naked puts has a higher probability of success (i.e., increases the win rate), but a significantly lower rate of return. For example, Apple trade No. 1 involved a naked put. Even though the trade made its maximum $1,100 profit, it included a huge $33,900 margin requirement which dragged the typical 20-percent-plus rate of return from put spreads all the way down to 3.2 percent ($1,100/$33,900).

Of the 33 “Gunslinger” trades, 21 were winners and 12 were losers for a win rate of 63.64 percent, which is slightly lower than the 68.2 percent expected win rate of one-standard-deviation trades. A total return of -5.40 percent doesn’t sound profitable, and it isn’t. On the other hand, the gunslingers didn’t lose much either: – $1,375 on total investment of $275,981 (half of one percent). The most recent gunslinger was CME Group (CME) on June 11th which unfortunately didn’t work out because of a completely unforeseeable “black swan” flood on the Chicago River. The CME trade was directional call credit spread and not a neutral iron condor and, even though it was a loser, I like the idea of moving gunslingers away from iron condors and towards directional bets with positive seasonality. The neutral iron condors have no statistical “edge”, whereas seasonality provides an edge, so gunslingers with an edge are more appealing to me. Even with a seasonality edge, however, gunslingers are short-term gambling and are for entertainment purposes only.

The “Growth” portfolio remains a small after-thought, but I hope to add more LEAP calls later this year — no later than the start of the bullish October-April period. I thought about converting Linn Energy (LINE) into a LEAP call and transferring the position from Conservative Income to Growth, but it’s a troubled, debt-laden energy company that would have added no industry-sector diversification to the Growth portfolio’s current energy focus.

The “Downside Protection Hedges” Portfolio has 21 winners and only 15 losers but rate of return remains negative at -12.73%. Losing on hedges is okay, since hedges are like homeowners insurance – something you pay for but hope you’ll never need to cash in because nobody wants their house to burn down. Furthermore, total loss on hedges on a per-contract basis was only -$3,021, which amounts to only 1.1 percent of invested cash of $275,981. I think that paying 1.1 percent of assets for some downside “peace of mind” is well worth the cost. With the S&P 500 and Dow Jones Industrials continuing to hit all-time highs through late-May and the small-cap Russell 2000 through late June, bearish hedge trades aren’t expected to be winners. The fact that recent downside hedges such as Best Buy and Lululemon Athletica expired profitably may be a signal that the overall market is beginning to stall. This is definitely not the time to give up on hedges and a 10% stock-market correction sometime in the second half 2015 is highly likely.

 The OFI rate of return would have been higher in four “alternative reality” scenarios:

(1) No Apple trade No. 1 (naked put);

(2) No gunslinger trades;

(3) Only “Conservative Income” portfolio trades,

(4) Only “Conservative Income” portfolio trades but without Apple trade No. 1.

Scenario

1520-Day Rate of Return:

4/21/11 to 6/19/15

1520-Day Rate of Return Including Cash Reinvestment

Average Trade Duration in Days

Win Rate

OFI Portfolio

10.40%

114.48%

138

84.68%

No Apple Trade No. 1

11.40%

125.36%

138

84.64%

No Gunslingers

12.01%

119.90%

152

86.90%

Only Conservative Income Trades

14.96%

174.60%

130

91.14%

Only Conservative Income Trades Without Apple Trade No. 1

17.11%

199.45%

130

91.11%

Gunslingers

-5.40%

-1908.84%

4

63.64%

Downside Protection Hedges

-12.73%

-118.56%

163

58.33%

 

 

 

 

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