January 2014 Core Strategy Pre-trade Analysis

Friday January 10th 7:30 AM Posted in: Daily Blog

Once a month, Options-Intelligence uses its vast options trading history to generate key statistics for our Core Options Trading Strategy members. These statistics are designed to arm option trades with invaluable information and insight into the the trends and expectations for the upcoming option trading cycle.

Historical Option Performance for January

January is historically one of the toughest months for the Core Strategy. The trading period has seen some stellar results, but more often then not, there seems to be a couple of losing trades sprinkled in with the winners. This pattern has held true since 2003 with 2004 (all winning plays) and 2013 (mostly losing plays) being the exceptions.

January lifetime winning history at common returns

Return Winning History
10% 67%
20% 57%
30% 45%
40% 40%
50% 35%
75% 18%
100% 12%

Historically successful January option picks

Stock # of Trades Winning History Average Return
AMZN 6 67% 43%
BRCM 6 67% 89%
DIA 10 70% 40%
EBAY 6 88% 47%
IBM 8 75% 66%
QQQ 8 75% 32%

Statistical Expectations for January

Based on our trade history, the Core Strategy will mostly likely be as challenging this January as it has been in the past. The winning history for common returns should be a fair warning to avoid chasing big winners this month. This is further reinforced by the lower than normal average returns for successful January picks. Also note, there is no consistently traded pick with a perfect or near perfect winning history, consider diversifying your funds during this month to reduce the risk of picking a bad trade. As always, make money and happy trading!

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