My return on investment trading Cimarex since June 2003 stands at 614.9%, which more or less doubles the stock's 309.5% rise over the same time period. Not too bad.
But as you'll see below, I was reversed to short at the start of this month, and while I try hard not to have an opinion about the future direction of the stocks I'm trading, I honestly can't help but feel neutral or even slightly bullish on this one. That has me contemplating something I don't do very often: writing $90 June (covered) puts.
But as you'll see below, I was reversed to short at the start of this month, and while I try hard not to have an opinion about the future direction of the stocks I'm trading, I honestly can't help but feel neutral or even slightly bullish on this one. That has me contemplating something I don't do very often: writing $90 June (covered) puts.
1. LONG the week of 6.2.03 at 22.41. My stop was $18.68, so the initial risk (R) on the trade was $3.73. Stopped out and reversed to short at $19.23 the week of 9.22.03. The percentage loss on the trade was -14.2%, and the reward-to-risk ratio was -$3.18/$3.73 = -0.85.
2. SHORT the week of 9.22.03 at $19.23. Using $23.06 as a stop, R = $3.83. Stopped out and reversed to long the week of 12.1.03 at $24.72. The percentage loss on the trade was -28.5%, and the reward-to-risk ratio was -$5.49/$3.83 = -1.43.
3. LONG the week of 12.1.03 at $24.72. With the stop set at $20.73 my risk was $3.99. Stopped out and reversed to short at $37.52 the week of 6.5.06. The percentage gain on the trade was 51.8%, and the reward-to-risk ratio was $12.80/$3.99 = 3.21.
4. SHORT the week of 6.5.06 at $37.52. The stop was $46.18, so R = $8.66. Stopped out and reversed to long the week of 4.16.07 at $37.27. The percentage gain on the trade was 0.7%, and the reward-to-risk ratio was $0.25/$8.66 = 0.03.
5. LONG the week of 4.16.07 at $37.27. I used $33.42 for a stop, so the risk on the trade was $3.85. Stopped out and reversed to short at $51.71 the week of 7.28.08. The percentage gain on the trade was 38.7%, and the reward-to-risk ratio was $14.44/$3.85 = 3.75.
2. SHORT the week of 9.22.03 at $19.23. Using $23.06 as a stop, R = $3.83. Stopped out and reversed to long the week of 12.1.03 at $24.72. The percentage loss on the trade was -28.5%, and the reward-to-risk ratio was -$5.49/$3.83 = -1.43.
3. LONG the week of 12.1.03 at $24.72. With the stop set at $20.73 my risk was $3.99. Stopped out and reversed to short at $37.52 the week of 6.5.06. The percentage gain on the trade was 51.8%, and the reward-to-risk ratio was $12.80/$3.99 = 3.21.
4. SHORT the week of 6.5.06 at $37.52. The stop was $46.18, so R = $8.66. Stopped out and reversed to long the week of 4.16.07 at $37.27. The percentage gain on the trade was 0.7%, and the reward-to-risk ratio was $0.25/$8.66 = 0.03.
5. LONG the week of 4.16.07 at $37.27. I used $33.42 for a stop, so the risk on the trade was $3.85. Stopped out and reversed to short at $51.71 the week of 7.28.08. The percentage gain on the trade was 38.7%, and the reward-to-risk ratio was $14.44/$3.85 = 3.75.
6. SHORT the week of 7.28.08 at $51.71. My stop was $68.85, so that means R was $17.14. Stopped out and reversed to long the week of 4.20.09 at $26.67. The percentage gain on the trade was 48.4%, and the reward-to-risk ratio was $25.04/$17.14 = 1.46.
7. LONG the week of 4.20.09 at $26.67. The stop was $16.07, so my risk was $10.60. Stopped out and reversed to short at $95.30 the week of 5.2.11. The percentage gain on the trade was 257.3%, and the reward-to-risk ratio was $68.63/$10.60 = 6.47.
8. SHORT the week of 5.2.11 at $95.30. The initial stop was $120.95, so R = $25.65. Closed yesterday at $91.76 with a $117.73 stop. The percentage gain on this trade is 3.7%, and the reward-to-risk ratio is $3.54/$25.65 = 0.14.
Bottom Line:
7. LONG the week of 4.20.09 at $26.67. The stop was $16.07, so my risk was $10.60. Stopped out and reversed to short at $95.30 the week of 5.2.11. The percentage gain on the trade was 257.3%, and the reward-to-risk ratio was $68.63/$10.60 = 6.47.
8. SHORT the week of 5.2.11 at $95.30. The initial stop was $120.95, so R = $25.65. Closed yesterday at $91.76 with a $117.73 stop. The percentage gain on this trade is 3.7%, and the reward-to-risk ratio is $3.54/$25.65 = 0.14.
Bottom Line:
Winning Trades: 6 | 75.0% | $20.78/share avg.
Losing Trades: 2 | 25.0% | -$4.34/share avg.
Average Trade: Gain of 44.7% | $14.50/share | Reward-to-Risk Ratio (R): 1.60
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