We Averaged an 80% ROR in the Worst August Since 2015

Last Week's Income Report: September 5th, 2022


While there will be no Options Income Weekly video this week due to the Labor Day holiday, I want to review the current trading environment and our results from August. 

Stocks delivered their worst August performance in seven years, with the S&P 500 down 4.2%. Ouch.

But it wasn’t exactly a shock after July’s monster run-up and given that August is historically one of the worst months for stocks. On average, the S&P 500 has declined 0.6% for the month over the past 25 years.

In fact, the only month in which stocks tend to perform worse is September, with an average decline of 0.7%.

Perhaps the one thing that was a bit shocking was the market’s reaction to Federal Reserve Chair Jerome Powell’s speech in Jackson Hole, Wyo. The news that the central bank will continue hiking interest rates to get inflation under control and that we should expect “some pain” ahead shouldn’t have been news to anyone.

Yet, the market downturn accelerated sharply after the Aug. 26 speech, and stocks have continued to struggle since.

Although history isn’t on the bulls’ side this month, I’m not worried.

Last month, Options Income Blueprint members closed eight winning trades in a row. Members who sold just one contract each booked $315 in cash.

Here’s a quick rundown of August’s winning trades:

For trades opened in 2022, our win rate stands at 92% — 48 winners and four losers — and we’ve netted $1,098 in cash.

As you can see above, the rates of return on our closed trades are also very high, with three trades in August delivering triple-digit annualized returns. For the month, we averaged an annualized return of 80% per trade during a very tough month for stocks.

September certainly also be a rocky month for investors. But, as a member once put it, I will continue to remain “annoying calm.”

I can do this because I have confidence in our options selling strategy, which is rooted in fundamentals. Sure, we have a number of ongoing positions that are underwater. But they are in solid companies and throwing off cash every week or two.

Going forward, I plan to continue trading familiar names that have served us well in recent weeks, such as streaming platform operator Roku (ROKU). We’ve closed five winning trades on the stock in the past month and a half. Members who sold just one contract each earned $183 in income with an average annualized return of 104% per trade.

With the holiday weekend behind us, expect volume to pick up. The next major event is the Federal Reserve meeting scheduled for Sept. 20-21. It’s possible the market fails to make up its mind on which direction its headed until then. But given the reaction to Powell’s most recent comments, I wouldn’t assume that continued rate hikes have fully been baked into equity prices.

So, stay light on your feet and don’t overcommit your capital. But you don’t have to sit on the sidelines either. I won’t be.


Receive the latest news

Subscribe To Our Daily Newsletter

Get notified about new articles, special events, training, and much more

Like What You See?

Leave your info below to get more options and trading ideas to your inbox

Yes, send me news to my inbox.