June Trade Review

When people hear the phrase option selling, they usually picture a simple, one-dimensional strategy: sell a put, collect the premium, and repeat. While that’s the start, it’s not the whole story. The real engine of my portfolio isn’t in placing single trades; it’s in managing campaigns.

A trade that goes against you is the moment the real work begins. My approach isn't just about collecting one-time payments. It's a systematic process of managing a position, using defensive rolls to collect more credits and methodically lower my breakeven point. The goal is to continue this process until the campaign becomes profitable.

This framework allows me to generate consistent income, even when an underlying asset is flat or temporarily down. But before we dive into the mechanics, let’s look at the results.

A Snapshot of Performance: June 2025

A strategy is only as good as its performance under real-world conditions. For the month of June, my portfolio achieved:

The Sharpe ratio, a measure of risk-adjusted return, is particularly important. A value of 8.25 is exceptionally high and suggests the returns were generated with very low volatility. The minimal drawdown of just half a percent further illustrates the portfolio's resilience. These results aren’t born from luck; they are the output of a disciplined, rules-based process, which is best illustrated by looking at two campaigns that required active management this past month.

Case Study #1: Managing Volatility in the Oil Patch (USO)

The oil market is notoriously volatile, and June was no exception. A sharp dip in the price of USO, the oil fund ETF, put my short put positions under significant pressure.

On June 24th, the total risk (delta) across my USO positions breached my pre-defined risk ceiling of 90. My rules dictated that I had to act immediately.

The First Roll: I closed the most threatened position, the USO 25JUN25 77 P, for a realized loss. But the campaign was far from over. I simultaneously opened a new position, the

USO 15AUG25 73 P, rolling the trade out in time and down in price, all while collecting a net credit.

The Second Roll: As the pressure continued that same day, I executed another roll. I closed the new August position and rolled the campaign into a much longer-dated put: the USO 16JAN26 65 P.

This campaign remains open in my portfolio today. Why haven't I closed it for a loss? Because my rules for abandoning a campaign have not been met. My macro view on the energy sector remains constructive, and my proprietary trend indicator has not signaled a definitive bearish breakdown. By rolling, I have successfully lowered my cost basis on the entire campaign and given myself over a year and a half for the position to work itself out.

Case Study #2: A Tactical Retreat in Gold (GLD)

I applied the exact same logic to my campaign in GLD, the gold ETF. After a strong run, a pullback in the price of gold challenged my positions.

On June 24th, I took a realized loss on my GLD 25JUN25 306 P. At the same time, I rolled the campaign forward, opening a new position to keep the business running. After another tactical roll a few days later, the campaign now resides in the GLD 15AUG25 295 P.

This campaign, like the one in USO, is still open. The conditions for a full exit, which is either a strongly bearish macro view or a trend breakdown, has not been met. I will continue to manage the position and collect premium to lower my breakeven until I can close the entire campaign for a profit.

I will check back regularly to update these two campaigns along with any new ones that are not simple expirations for full profit.