Why is my options account balance not going up?
Why is my options account balance not going up? It doesn’t make sense since I seem to be winning on most of my trades.
There are several reasons for this phenomena when you first start trading option spreads with our services.
For starters, in the first six months of using our services, you will be building your portfolio. As such, you will have more open trades than closed trades. And while almost all of Jim Fink’s closed trades are winners, the open trades are subject to a few things:
- They simply may need more time to work out profitably. Prices fluctuate, so don’t worry yet that your trades are currently in a net loss position. An option trade’s journey is like an airplane ride, with plenty of price turbulence before a (hopefully) safe landing. All that matters is what happens at the expiration date.
- Many brokers value your open options positions at the “bid” price for options you are long and at the “ask” price for options you are short (i.e., worst possible “natural” prices). However, in reality, you would be able to buy back your short options and sell your long options near the “midpoint” of the bid/ask spread.
- Jim may tell you to roll some of your “credit” spreads into “debit” spreads”. With a debit spread you pay money up front and collect your winnings at expiration. Those potential winnings are not factored into the account balance that your broker calculates.
Therefore, it makes more sense to simply focus initially on the win/loss record of your closed trades and the credits they’ve generated. But if you want to fret over your open trades as well (whether they’re in-the-money or out-of-the-money), we’re willing to bet that you’ll see more green than red on your screen.
Jim Fink’s services have very profitable track records. Stick with it, and you will be well rewarded.