#203 - Is 5% Per Month Trading Options Even Possible?

Episode of: The "Daily Call" From Option Alpha

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Apr 13, 20183m
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#203 - Is 5% Per Month Trading Options Even Possible?
Apr 13 '183m
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Hey everyone. This is Kirk here again at optionalpha.com and welcome back to the daily call. Today, we are going to be answering the question, “Is 5% per month trading options even possible?” Once and for all, I think that the answer to this question is unequivocally, “No. It is not possible to do that on a consistent basis.” I’m actually floored that there are still sites out there… I won’t even name the names, but it's probably some part of the title of this podcast that promote and suggest that 5% returns per month on a whole portfolio basis is consistently possible. If you really think about this rationally, you would be looking at 60% annualized returns every single year and that would put you in not only the top category for every single hedge fund, every single mutual fund, but very quickly, you would own the entire world. You would have at that point, compounded growth at 60% per year which you would own the entire world of investable assets. Therefore, it is not possible to do 5% per month trading options.

Now, is it possible to have a 5% month? Of course! Could you have one single month or maybe even two months in some cases where you have just insane returns and really good returns for those two months? Of course it's possible. It's statistically possible. It’s probably happened to people before. But on an ongoing basis, it is completely ridiculous to think that you can generate 5% per month trading options without taking on massive, massive risk and leverage. And of course, the more leverage, the more risk you take on, the higher chance you increase and probability of completely blowing up your account is. Hopefully this ends that entire conversation. There is no way you can get to that level. Now, we’ve talked about what you could get to and we’ve got training and guides on expected returns, portfolio returns that you can target. It's got to be reasonable and I think a lot of people are being unreasonable in this space. 5% a month, no way, no how, nobody's ever done it. Show me somebody who's ever done consistently 5% per month or anywhere close to that 60% annualized returns. It's not possible and it’s not out there. Hopefully this helps out. Until next time, happy trading!

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