Here is the follow-up from my June 30 OptionsProfits column titled, "Making Money in a Market That Goes Nowhere"

In that article, I listed five stocks to buy and the associated puts and calls that would generate very nice returns even if the market went sideways. As it turned out, things have gotten appreciably better (although after a lot of choppiness).

DJIA, QQQQ June 29-Sept 27
Source: Yahoo Finance

 

From June 29 through Monday, September 27 the DJIA, S&P 500 and PowerShares QQQ Trust ( QQQQ) were up 9.58%, 9.65% and 13.88%, respectively. So, was it a bad idea to be so conservative with my suggestions? Here are the trades and their results so far. You decide...
Trades

The chart below shows the returns on the five underlying shares if you had bought and held each since the publication date.
Returns

 

That 17% average gain is almost 70% better than the market averages over the same not quite three-month period.

The best part... every one of the underlying stocks is now well above the strike prices we chose. If nothing changes through the December to February expiration dates all five puts will expire worthless and all five calls will be exercisable.

The average holding period from inception through final expiration dates was 5.3 months and the average static return was 23.68%. That made for an annualized rate of over 53% plus dividends. With each stock we still have a very nice margin of safety in case the market, or these particular shares pull back over the next few months.

A 10% move in the indices is very nice. Making much better returns with less risk ...

Priceless.

At the time of publication, Paul Price was long shares and short options in SEE, EEFT, IM and FLR.

Dr. Price joined Merrill Lynch in 1987 and over the next 13 years worked with A.G. Edwards, Wheat First and Ferris, Baker Watts. Dr. Price enjoyed enough success to retire in October 2000, but he continues to write and give investment seminars.

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