May Core Strategy Pre-trade Analysis

Intro

As a new feature, I plan to provide some insight to my expectations for the Core Options Trading Strategy prior to the trading cycle each month.  As part my analysis I am going to look at historical data to try and determine what should be the best (statistically) performers for the upcoming cycle.   Some of the criteria I will look at will include:

• Winning histories
• Average yields
• Frequency

Historical Performance for May

Monthly performance for May is very optimistic.  The lifetime winning history for May is an astounding 92.50%, which is second only to July.  Perhaps even more impressive is the staggering 153.58% average yield for the month.

May lifetime winning history at common returns:

Historically Successful May Picks

Many stocks have high historical performance for the month of May, however, only a few have been traded with much frequency:

Statistical Expectations for May

May obviously looks to be a strong month.  Both March and April were unfavorable to the Core, providing negative or lackluster results, which could set us up for a strong May cycle.  Statistically, QQQ (as usual) provides a strong return with minimal risk as it is also one of the best all time performing stocks for the Core Options Trading Strategy.  IBM also looks to be a winning play for May.

These recommendations are independent of Dave's monthly core picks and are intended to provide traders with a framework to build upon.