The trading plan mission statement should state the goal of the portfolio as well as the starting portfolio value, benchmark growth goals and the strategies that will be initiated within the portfolio.
Also, the mission statement will need to break down the allocation of assets into each selected strategy. It is important that investors stick to the allocation percentages. Finally, the mission needs to state why this will be a formula for success.
Please remember that it is important to select trading styles that are appropriate to meet YOUR risk profiles. Every trading plan will be unique.
Trading Plan
“Plan the Trade, Trade the Plan”
Starting Portfolio Value: $5,000
Target Monthly Portfolio Growth: 10-15%
Option Strategies Initiated: Vertical Spreads, Butterflies and Iron Condors
Portfolio Overview:
The portfolio will use equity options to utilize option spreads that
will take advantage of the time decay factor of options. The portfolio
will attempt to remain as Delta neutral as possible to avoid volatility
whiplash. The trades will target out of the money options that have a
high probability of expiring worthless in an attempt to collect option
premium and reduce risk.
Portfolio Allocation:
15% Non-Directional Strategies: Low-risk, high probability
non-directional option spreads that target range bound markets using
exchange traded funds (ETFs).
80% Spread Strategies: Low-risk, high probability vertical option spreads that collect time premium.
5% Hedged Strategies: OTM long-term $SPX put positions to hedge overall negative portfolio Vega risk.
Please fill out Section 10.1 of the Trade Plan Template.
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