Option Performance Yesterday's Into The Close was rather lengthy due to the many winners (and therefore rollovers) that had to be dealt with vis a vis Sep monthly expiration. It also provided a microcosm of option performance, as the 17 trades that expired yesterday ran the gamut of performance from +568% (BABA) to 100% losses, or 50% losses using a hard stop. The tables below show option performance from using no stops whatsoever, to using only the 50% hard stop from entry to compare performance: Sep Expiration - Using No Stops Whatsoever Sep Expiration - Using only the -50% from entry Stop PRO Service - Sep Expiration using only the -50% from entry Stop The PRO Service had 12 Sep expiration trades, 5 of which were exited early due to tagging the -50% from entry hard stop. Still, the average trade was up 104%. Not shown is the no stops whatsoever table for PRO, with an average trade of +85%. Conclusions It's rare for us to have 17 positions (Premium Service) on for any one month, so let's at least take some real world insight away from this just passed Sep expiration: (1) First off, average return per trade does much better when we apply the -50% hard stop from entry rule. In the Premium Service, 7 out of 17 trades lost 50% from entry, but overall option performance was up 63% (no stops), to up 80% (applying 50% hard stop) and up 104% (with 50% hard stop) in the PRO Service. (2) Despite outperformance using the -50% hard stop, using no stops whatsoever turned in a very respectable performance of +63% per average trade. Option trading is akin to psychological warfare against ourselves, so putting on a trade and walking away until expiration is a psychological advantage, i.e., once a position is taken, the less we "mess" with it, the less decisions regarding that position, the easier the trade is to manage. In this case, no stops whatsoever, is about as easy a way to manage an option trade as is conceivable and even then, the average (Premium) return is +63% per trade. Some might say: "Case closed." (3) The third leg of trade management strategy is to apply a 50% trailing stop once a trade is up 100%. I don't have the complete data set, nor the time this morning, to apply that criteria to our group of Sep expiration trades. However I can surmise, based on personal experience, that the average return per option trade will fall between +63% and +80%, which if true, would render trailing stop exits to a matter of personal preference. I'll reserve total judgement on the trailing stop exit until I can put together some hard evidence to support my conclusion. Let's call that analysis - Pending. The Big Picture We have been looking for a seasonal/cyclic low during September-October for the past several weeks. So far, no cigar. The stock indices are grudgingly moving up on most days and easily recovering from any short-lived dips, almost teasing anyone to take a chance on the downside. A simultaneous breakdown of multiple indices, especially below well defined parallel channels, will result in a Special Alert and the initiation of put positions on SPY/QQQ and/or calls on VXX/UVXY. Nonetheless, until further notice, no clear breakdown = no downside positioning. SPX This S&P 500 chart is indicative of all of the indices insofar as prices are in an uptrend and showing no hint of either accelerating up or reversing down. Going forward into the 4th Quarter of 2025, we will continue trading the sector trends in the precious metals, clearly up strong, and isolated stocks like TSLA, RKLB and a few select technology stocks that are now newly appearing on my radar. As for Bitcoin, a breakaway from the $115K-$117K zone of resistance/support will be the first hint of directional bias going forward. BTC I've stripped this Bitcoin chart above down to its essentials, as it is barely holding onto to its long term bullish trendline. A break into the $120K's or break below $110K could prompt a fresh trade. Silver Silver appears destined for $46-$52 and its calls, even out to Dec expiration (90 Days), remain cheap and ripe for 5X to 10X returns. Although I like the round number $40 strike best, any Dec call in this table has excellent upside potential on a continuing rally in Silver and SLV. ----- Active Options PRO Service Premium Service
