March 2020 Monthly Options Strategy Analysis

Friday March 13th 9:25 AM Posted in: Monthly Options Analysis

Note, we have slightly modified the format of this content, do make sure you have read the entirety of the post.

Key Stats

147

Total
trades

109

Winning
trades

74%

Winning
history

93%

Average
return

Analysis

We have analyzed a total of 147 March options trades from 2002 on and found somewhat favorable results. Our key data show a winning history that under performs the monthly options strategy as a whole, however, it does so with an average return well outside of our recommended target profit.

The trade history shows very difficult years in 2015, 2014, 2011, 2010, and 2004 which is highly atypical for our strategy. Most month's analysis will show at most only a single unfavorable year. Similarly, not a single stock has better than a 90% winning history from our data.

The risk v. reward chart (below) reflect mostly the same narrative. Note that the strategy has under performed in March for most sought returns with the unusual exception of a returns between 55% - 95%.

Risk vs Reward

Successful Picks

StockPlaysWins
AAPL131185%134%
AMZN10880%86%
DIA181372%72%
GOOG8675%81%
IBM11982%111%
QQQ161063%58%
SPY9667%49%
WYNN8675%170%

Trade Recommendations

The obvious elephant in the room is the broad market sell off as a response to COVID-19. With such volatility, option trading carries a significantly higher risk than normal. This is particularly apparent when pricing options on the call side. Simply put, trading this month is a gamble.

Target Profit Recommendation

March is clearly a risky month, smaller gains in the 10% - 20% range would be ideal.

50%

Target Profit
Per option trade

Make up to a 50% return or better from our option trades by following our profit targets.

78%

Time-tested
winning history

Over 20 years of trade history with better than 7 out of 10 winning options trades.

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