2022 Options Alerts Performance & Results Summary

Trends by Expiration Dates: Deep vs. Near Expiration

One of the key factors that influence option performance is the time to expiration. We found that alerts with varying days to expiration had different success rates:

• 0-30 Days to Expiration: These alerts performed relatively well, with an average gain of 151.80% across 37 alerts. Traders benefited from the volatility of short-term options.

• 30-90 Days to Expiration: This category had the most alerts, with 110 alerts and an average gain of 156.70%. It was a sweet spot for options traders, as the slightly longer expiration provided ample room for price movement.

• 90-180 Days to Expiration: With 17 alerts in this range, the average gain dropped to 59.73%. These medium-term options were less volatile but still provided moderate gains.

• 180+ Days to Expiration: Deep expiration alerts (6 total) had the lowest performance, with an average gain of 55.37%. This suggests that traders might want to be cautious with very long-term options, as they tend to yield lower returns.

Price Range Trends: High-Growth Potential in Mid-Range Stocks

The strike price of an option also plays a role in determining its success. Here’s how different price ranges performed:

• $0-$20 Strike: A total of 20 alerts fell into this range, with an average gain of 121.86%. These lower-priced stocks provided steady, but not extraordinary, returns.

• $20-$50 Strike: 38 alerts in this range saw a more modest average gain of 116.67%, suggesting that stocks in this price range were reliable but not exceptionally high-performing.

• $50-$100 Strike: Stocks in this mid-range had the highest average gain of 177.50% across 35 alerts. This range seems to be the sweet spot for traders looking to maximize their returns.

• $100-$200 Strike: 60 alerts in this higher price bracket saw an average gain of 120.17%, offering a balanced risk-reward profile.

• $200+ Strike: This group, while small with only 17 alerts, yielded the highest average return of 229.91%, indicating that high-priced stocks can offer lucrative opportunities when the market moves in the right direction.

Sector Insights and Patterns

Although this analysis focuses on price ranges and expiration dates, sector trends also play a critical role in option performance. Based on the ticker symbols, it appears that:

• Technology Stocks: Stocks like AAPL (Apple) and AMD (Advanced Micro Devices) had mixed results. While AAPL delivered no gain, AMD’s put options provided significant returns.

• Consumer Goods: TGT (Target) was one of the top-performing stocks, with its options returning a massive 1287%.

Analysis of Low-Performing Alerts (Under 20% Gains) in 2022

In 2022, 32 alerts—or 18.71% of the total—yielded gains below 20%, highlighting patterns in underperformance and areas for strategy refinement.

Expiration Window Trends

The low-performing alerts were mostly concentrated within specific expiration windows:

• 30-90 Days: This window saw the highest concentration, with 24 alerts (75%) under 20% gain. While generally effective, this expiration range held the majority of lower-performers, indicating a need for careful selection within this timeframe.

• 0-30 Days: Represented 4 alerts (12.5%) of low performers. These short-term alerts struggled to gain traction, likely due to rapid market changes or limited time for favorable movement.

• 90-180 Days: Also with 4 alerts (12.5%) falling below the 20% threshold, suggesting that while some medium-term alerts yield stability, a subset remains vulnerable to underperformance.

• 180+ Days: No alerts in the longest expiration window fell below 20% gains, indicating that long-term positions tend to maintain resilience against poor performance.

Strike Price Range Trends

Low-performing alerts were distributed across strike price ranges, with the highest concentration in higher strike prices:

• $100-$200 Strike Range: This category accounted for 13 alerts (40.63%) under 20% gains, indicating that mid-to-high-priced options faced challenges in reaching profitable levels.

• $50-$100 Strike Range: Contained 8 alerts (25%) that underperformed, suggesting mixed results within this commonly targeted range.

• $0-$20 and $20-$50 Strike Ranges: Each of these lower-priced categories saw 4 alerts (12.5%) underperform, indicating that even stable lower-priced options are not immune to market fluctuations.

• $200+ Strike Range: Representing 3 alerts (9.38%) below target, high-priced options carried additional risk, resulting in underperformance in a subset.

Sector Trends

Sector-specific analysis of low performers reveals the following:

• Technology: This sector had the most significant concentration of low performers, with 6 alerts (18.75%) below the 20% gain threshold. Given technology’s inherent volatility, these results indicate that some tech alerts struggled with market sensitivity in 2022.

• Financials: Representing just 1 alert (3.13%) among low performers, indicating relative stability in the financial sector compared to others.

This analysis of low-performing alerts underscores the importance of expiration timing, strike price selection, and sector-specific strategy, especially in high-volatility areas like technology. Identifying these trends allows for targeted adjustments to enhance performance and reduce exposure to underperformance in future trading.

Conclusion: Key Insights and Strategies for Trading Success

The analysis of 2022’s alerts highlights significant patterns and performance insights that can inform traders’ approaches to options trading. By examining these patterns in expiration trends, strike price ranges, and sector-specific outcomes, we gain a clearer picture of the risk-reward balance that options trading presents.

1. Timing Is Critical: Optimal Expiration Windows

Our review shows that alerts with a 30-90 day expiration window tended to offer the best balance between volatility and time decay. Short-term options, those within the 0-30 day expiration range, also performed well, providing rapid opportunities for those looking to capitalize on market movement without holding positions long-term. Longer expiration windows, however, especially those exceeding 90 days, displayed a substantial drop in potential returns. This suggests that shorter expiration alerts may provide more profitable opportunities by leveraging market fluctuations while avoiding excessive time decay and uncertainty.

2. Price Range Sweet Spots for Maximizing Gains

Options with strike prices in the $50-$100 range were among the top performers, offering an average gain of 177.5%. This price range seems to be a “sweet spot” for many traders, balancing affordability with potential market volatility that can drive profitable outcomes. High-priced stocks in the $200+ range also showed significant potential, with an average gain of 229.91%, indicating that while these options are higher in cost, they can yield exceptional returns for traders who can manage the additional financial commitment.

3. Sector-Specific Insights

The performance of different sectors also played a role in alert success. Technology stocks displayed mixed outcomes, likely influenced by rapid market shifts and high volatility that characterize this sector. Consumer goods stocks, notably Target (TGT), achieved some of the highest returns, suggesting that certain staple industries may offer stable yet lucrative options trading opportunities. Recognizing the potential and risks inherent in each sector can help traders strategically allocate their options alerts based on prevailing market conditions and sector performance.

4. Risk Management and Diversification

Options trading inherently involves risk, and this data underscores the importance of diversification. Successful strategies included spreading alerts across varying expiration windows and sectors, rather than relying on a single type of stock or timing strategy. Diversifying alerts can help reduce exposure to sector-specific risks and market timing uncertainties, making for a more balanced approach to trading.

5. Understanding Market Volatility and Strike Price Selection

Choosing strike prices that align well with market conditions appears crucial. Higher strike prices, though potentially more expensive, tend to yield higher returns when the market conditions are favorable. For traders, carefully evaluating both the volatility of the underlying stock and market trends is key to selecting strike prices that have the best chance of success within the desired timeframe.

This in-depth look at the 2022 alerts emphasizes the importance of strategy, timing, and adaptability in options trading. By analyzing and applying these insights, traders can refine their approach and make more informed decisions. The trends uncovered highlight the nuanced nature of options trading, where understanding expiration, price ranges, sector dynamics, and risk management can enhance the overall trading experience.