Portfolio performance comparison between an options-based portfolio approach and the Dow Jones. The performance data over a two-year period (April 2020 - March 2022) is overlaid. The options-based portfolio data demonstrate consistent portfolio appreciation, largely matching and/or outpacing the broader market returns. These results were achieved with a long-term target portfolio allocation of ~40% cash, ~40% long-term stock positions and ~20% options (leveraging the rules of option trading and IV Rank) in an effort to reduce overall portfolio risk and volatility. The target portfolio allocations are dynamic and can change at any time, contingent on market conditions. These results were achieved with substantially reduced portfolio risk and a much lower portfolio beta (measure of portfolio risk).            

May 2020 - May 2022 options trading metrics highlighting average income per trade, average return on investment per trade and overall premium capture specific for the options component of the portfolio. All trades are risk-defined while following the 10 rules of option trading in high IV rank environments. 

May 2020 - May 2022 metrics highlighting options win rate, option trade types and the number of different tickers used across stocks and ETFs.

May 2020 - May 2022 Return on Investment (ROI) per option trade. All option trades are risk-defined via put spreads, call spreads and iron condors in order to leverage a minimal amount of capital to maximize returns. The ROI target per trade is 5-15% at a delta of ~0.15 or ~85% probability of winning the trade at expiration. Option trades are spread across a wide array of tickers (stocks and ETFs) to maximize sector diversity across uncorrelated stocks with high IV Rank while maximizing the number of trades.

Sample trade type distribution over the first half of 2021 (January - June), consisting primarily of iron condors and put spreads and to a lesser extent, call spreads. Statistically insignificant (~5%) are diagonal put spreads and diagonal call spreads. This option trade type distribution is dynamic and the weighting changes as a function of time.  

Noah Kiedrowski 
Founder and Managing Member

Stock Options Dad LLC

A Registered Investment Adviser (RIA) firm