Buy IWM sell puts & strangle

Buy IWM via selling puts and selling a strangle

Sell IWM Nov 74 puts

Sell IWM Dec 70/88 strangle (88 calls, 70 puts)

These filled in the morning. I take some small positions after many weeks of no trading. My only other trading position is short LGF Dec 11 puts. 

Why now? The stock almanac shows November to be a strong month. As always, seasonality is one of the weaker indicators. I have tons of free capital to deploy, and the recent selling squall is an opportunity to dip my little toe in the water. 

Net long IWM

long LGF

10-0 For October grade A-, also anniversary of the 87 crash

Ten winners, zero losers for the October option cycle. I've been so busy, that I didn't trade much, but these ten came home as winners. Why the A- because there was plenty of room for improvement and bigger profits.

One of my best percentage gains for the year was on EWG the German stock ETF. I sold puts months ago, and the return on margin required was like 80%. Most of the puts I sell are about six weeks out and return on margin required is usually in the single-digit percentage range. That's the good news, the bad news was that it was a very small position in dollar terms.

For oldtimers, the 25^th anniversary of the 1987 stock market crash, saw another drop. I started trading a few months before the 1987 crash. I believe that those early days of trading have forever imprinted on me, and a big reason why I tend to be so cautious. Suzy Orman often talks about a person's earliest memory of money, and how that impacts them. The first few investments a person makes can also have a big impact, especially if the “end of the world” happens when a person is just getting in.

I wish I could say that I knew the stock market would recover, but virtually no one did. As with any crisis, there is no way of knowing where the bottom is. Back in 1987, it was near impossible to make any trades during that time because it was all done over the phone.

My schedule looks like it will remain very busy, so updates will tend to be sparse for a while.