2023 Options Alerts Performance & Results Summary

Trends by Expiration Dates: Deep vs. Near Expiration

Expiration timing significantly influenced alert performance. Here’s how each category performed:

• 0-30 Days to Expiration: This short-term category saw 37 alert, with an average gain of 151.80%. These options benefited from rapid market movements, making them ideal for traders looking for quick, high-volatility opportunities.

• 30-90 Days to Expiration: The largest category, with 110 alerts, achieved an average gain of 156.70%. This window balanced volatility and time decay effectively, making it a “sweet spot” for maximizing returns with moderate holding times.

• 90-180 Days to Expiration: With 17 alerts, this medium-term category had an average gain of 59.73%. These alerts provided moderate returns, suitable for traders seeking stability over quick profits.

• 180+ Days to Expiration: Long-term options (6 alerts) saw an average gain of 55.37%, indicating lower performance in this category. This suggests that deep expiration alerts may underperform due to extended exposure to time decay and market fluctuations.

Price Range Trends: Identifying High-Return Strike Price Ranges

Strike price significantly impacted performance across categories:

• $0-$20 Strike: With 20 alerts, this lower-priced category achieved an average gain of 121.86%, offering steady but modest returns.

• $20-$50 Strike: Mid-priced options in this range saw 38 alerts with an average gain of 116.67%. This range was reliable but did not yield high-growth returns.

• $50-$100 Strike: The standout category, with 35 alerts, returned an impressive 177.50% on average, making it the best-performing strike price range and a key area for maximizing gains.

• $100-$200 Strike: This higher range, with 60 alerts, offered balanced returns with an average gain of 120.17%, appealing to traders with a moderate risk appetite.

• $200+ Strike: Although fewer in number, with only 17 alerts, this high-priced category achieved the highest average return of 229.91%, showing the potential for lucrative returns when the market moves favorably.

Sector Insights and Patterns

In 2023, sector-specific trends played a notable role in alert outcomes, with varied performance across different industries:

• Consumer Discretionary: With 6 alerts and an average gain of 70.56%, this sector demonstrated steady, moderate returns. Alerts in companies like JD and ABNB captured consumer-driven market fluctuations, providing stable gains without excessive volatility.

• Consumer Staples: Although represented by just 2 alerts, this sector achieved the highest average gain of 362.12%, showcasing its potential for significant returns, especially in essential industries like Target (TGT), which benefited from stable market demand.

• Financials: Financial sector alerts, including those in COIN and BAC, delivered an impressive average gain of 291.82% across 6 alerts. This sector’s gains were buoyed by market interest in financial assets, underscoring its strong potential amid economic changes.

• Technology: Representing 21 alerts with an average gain of 189.64%, the technology sector showed both high performance and volatility. Alerts in companies like AMD, NVDA, and AAPL yielded substantial returns, reflecting the dynamic nature of tech stocks and their rapid response to market shifts.

These insights reveal the importance of sector diversification, as each sector responded uniquely to economic and market changes throughout the year. This diversity provided members of Pure Power Picks with opportunities to capture gains across stable and high-volatility sectors, supporting a balanced approach to options trading.

Analysis of Low-Performing Alerts (Under 20% Gains) in 2023

In 2023, 35 alerts—or 20.47% of the total—yielded gains below 20%, indicating patterns within these lower-performing alerts that can guide adjustments in strategy.

Expiration Window Trends

Low-performing alerts were more common within certain expiration windows:

• 30-90 Days: This category had the highest concentration of low performers, with 13 alerts (37.14%). While this window generally showed strong results, a subset of alerts in this range did not achieve high gains, suggesting selective caution when timing specific alerts within this period.

• 0-30 Days: Representing 9 alerts (25.71%), this short-term window also contained a notable share of low performers. Rapid market shifts and limited reaction time might have impacted gains within this timeframe.

• 90-180 Days: This medium-term category included 6 alerts (17.14%) that underperformed, pointing to a possible risk in holding some alerts beyond 90 days without clear market momentum.

• 180+ Days: None of the long-term alerts (over 180 days) fell below the 20% gain threshold, suggesting that while these options may experience lower volatility, they also maintain some resilience against severe underperformance.

Strike Price Range Trends

Low performers were distributed across various strike price ranges, with concentrations in the following:

• $50-$100 and $100-$200 Strike Ranges: Both ranges contained 9 alerts each (25.71%) in the low-performing category. While these ranges offered high gains overall, a subset did not meet expectations, highlighting the need for careful strike selection within these ranges.

• $0-$20 and $20-$50 Strike Ranges: Each of these lower-priced categories saw 6 alerts (17.14%) underperform, indicating that although they are generally more stable, some low-priced options did not yield significant returns.

• $200+ Strike Range: This higher-priced category contained 5 low-performing alerts (14.29%). While high-priced options have strong upside potential, they also entail elevated risk, which affected a subset of alerts here.

Sector Trends

Sector-specific trends within low performers showed concentrations as well:

• Technology: This sector had the highest share of low performers, with 4 alerts (11.43%) under 20% gain. Given the tech sector’s volatility, these results suggest that not all technology alerts benefited from the market conditions in 2023.

• Financials: The financial sector represented 2 low-performing alerts (5.71%), emphasizing the importance of timing in this sector, as it showed both high gains and some low returns.

• Consumer Discretionary: Contributing only 1 low-performing alerts (2.86%), this sector showed relative stability, with fewer instances of low performers, reflecting steadier market demand.

Conclusion: Key Insights and Strategies for Alerting Success in 2023

The analysis of 2023 alerts from Pure Power Picks reveals essential patterns and strategies that can aid traders in refining their approaches to options trading. By examining expiration trends, strike price ranges, and sector-specific outcomes, we uncover a deeper understanding of the risk-reward balance that options trading offers.

1. Timing is Essential: Optimizing Expiration Windows

   Our 2023 review highlights that alerts with a 30-90 day expiration provided an optimal balance between volatility and time decay, achieving an average gain of 156.70%. Short-term options with 0-30 day expirations also performed well, delivering an average gain of 151.80% and presenting fast-paced opportunities for traders. Meanwhile, options with 90-180 days or more showed reduced performance, with gains averaging around 59.73% for medium-term and 55.37% for long-term expirations. This trend suggests that shorter expiration alerts may offer more profitable potential by leveraging immediate market movements while minimizing exposure to prolonged time decay.
   
   

2. Identifying Price Range Sweet Spots

   Options with strike prices between $50-$100 stood out as top performers, yielding an average gain of 177.5%, establishing this range as a “sweet spot” for maximizing gains. This price range often combines affordability with market volatility that can drive substantial profits. Additionally, high-priced options above $200 delivered the highest average return of 229.91%, illustrating the potential for exceptional returns when the market favors these options, even if they come with a higher cost. This pattern suggests that balancing investments between mid- and high-priced strikes can effectively optimize returns.
   
   

3. Sector-Specific Insights for Informed Alert Decisions

   Sector trends played a significant role in alert outcomes in 2023. Technology stocks demonstrated varied performance, reflecting the sector’s inherent volatility, while financial stocks provided solid returns amid economic fluctuations. Standout gains in consumer goods stocks like COIN (Coinbase) underscore the potential within stable yet dynamic industries. For traders, recognizing these sector-specific patterns and market conditions can be advantageous when strategically allocating options alerts.
   
   

4. Diversification as a Core Strategy for Risk Management

   The inherent risks of options trading highlight the importance of diversification. Successful strategies in 2023 included spreading alerts across varying expiration windows and sectors, reducing dependence on any single stock or timing strategy. This approach mitigates exposure to sector-specific risks and timing uncertainties, providing a balanced pathway for growth while managing potential downturns.
   
   

5. Adapting to Market Volatility through Strike Price Selection

   Selecting strike prices aligned with market conditions was crucial in 2023. Higher strike prices, though often more expensive, yielded significant returns when the market moved favorably. This underscores the importance of understanding market trends and volatility when choosing strike prices. Traders who evaluate both stock-specific trends and broader market conditions stand to optimize their success, especially within the chosen timeframe.

By taking these insights from 2023 into account, options traders can refine their strategies, focusing on optimal expiration periods, well-suited strike price ranges, and informed sector diversification. With these tools, Pure Power Picks members are well-equipped to capitalize on opportunities and manage risk effectively in the dynamic options market.