Option Investor

Option Writer-March Summary

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March was a volatile month for the strategy. However, we are basically flat when it sould have been a lot worse. it is evident that taking profits earlier on stocks like AAPL, WYNN, MON and ICE would have provided less downside exposure and resulted in a better monthly profit. Even though the TA stop was used most, the most reliable stop last month was the PL. That was true due to the amount of volatility pushing prices further down into the the other stop triggers. Normal market conditions usually allow for more wriggle room and therefore support the cost basis stop more often. Our results are obviously different than yours due to the delays, option price fluctuations and the risk management you are comfortable. The list above proves that no one risk management technique should be used exclusively and that the underlying positions' risk profile should influence which one to use.

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