It was another profitable year for us at SPX Option Trader! We ended 2020 with the following returns for the entire year, +2,621% ROI in our SPY weekly option trading, +2,587% ROI in our SPX weekly option trading, +544% ROI in our SPX Binary Trader and +428% ROM in our SPX Spread Trader. Certainly 2020 was an unusual year and that is an understatement. The global pandemic has had an impact on us all. We’ve seen this unusual activity reflected in our trading performance. Our annual performance for 2020 in both SPY and SPX weekly option trading was below our historical annual performance. While our annual performance for 2020 in both the SPX Binary Trader and SPX Spread Trader was right in line with our historical performance. This mixed performance reflects how unusual this past year was.
Our forecasts have remained incredibly accurate this past year. In fact, our percentage of accuracy in forecasts for target levels was higher in 2020 than our historic averages. In the SPX we had 78% accuracy in hitting our 1st level, 53% in hitting the 2nd level and 43% in hitting the 3rd level. These are well above our historic averages. The same was true in the SPY as we had 86% accuracy in hitting our 1st level, 63% in hitting our 2nd level and 50% in hitting our 3rd level. So, for 2020 our accuracy in forecasting target levels was above average! Our accuracy for forecasting the daily level was right in line with our historic averages. Yet despite this high rate of accuracy, we have seen a lower overall return in our SPX and SPY trading compared to previous years. We believe this is due to several factors.
For 2020 the average price of the options we trade was nearly double what it has been in years past. This makes larger % gains more difficult to achieve. For 2020 the number of days with no trades was nearly triple what we normally experience in a year. This has reduced our trading opportunities. Despite all these unusual events, we still achieved a nice profit for the year. The success of all our strategies and high accuracy rate of our forecasts give us great confidence and hope of a great year ahead of us. We are glad to have ended yet another year with a profit. We achieve this profit by using the information provided each day in the SPX Daily outlook and staying consistent in our approach in the good times and in the rough patches.
Trading is a tough way to make a living. It takes not only discipline and a winning strategy, but an emotional strength unlike any other profession. It requires a trader to approach each day fresh, and not let yesterday’s performance impact today’s decisions. It requires a trader to not get over exuberant after huge gains, or despair after a down trade. We stay consistent in our approach and do our best to not let our emotions get out of control. This is so important after a month like this past month. We ended December with -408% ROI in our SPX weekly option trading, -422% ROI in our SPY weekly option trading, -135% ROI in our SPX Binary Trader and -133% ROM in our SPX Spread Trader. This was the toughest month we’ve seen in our trading since inception of our service in 2016. We ended this past week with -79% ROI in our SPY weekly option trading, -86% ROI in our SPX weekly option trading, -105% ROI in our SPX Binary Trader and -1% ROM in our SPX Spread Trader.
We do not like drawdowns, no one does. But they happen in trading. While this past month was down, we are not discouraged. We are confident of seeing better days ahead, and so we stay at it each day. This is the great advantage of day trading; each day is new and full of possibility. All it takes is one nice profitable day (as we have had many times) to make up for this past month. We look forward to a great year ahead of us as we continue day trading SPX and SPY weekly options.
There will be no trading activity on Friday, January 1st as the market is closed. Normal trading activity will resume on Monday, January 4th. We wish you and your family a happy new year! We look forward to 2021 expecting to see some great trading days ahead.
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