fbpx The October Seasonal Trade - 2020 Update (Preview) | Option Strategist

The October Seasonal Trade - 2020 Update (Preview)

By Lawrence G. McMillan

One of our favorite seasonal trades – and one of the most rewarding – is the October Seasonal Trade. It will be coming up at the end of October. It calls for buying “the market” on October 27th and selling out your position on November 2nd . BUT...the trade is only taken if there has been a 3.2% or larger decline sometime during the month of October. So far, we don’t have that last criterion satisfied, but it’s still early in October.

We will publish a more in-depth analysis of past results in two weeks, but for now, consider the results in the table below. We only began trading the October Seasonal in 1978, so there are 10 elections in the results since then. One of the years, the trade was skipped (2016) because the market did not decline 3.2% anytime during October 2016 (it was the consensus that Hillary Clinton was going to win, and the market rose for nearly the entire month of October in anticipation of that fact).

So that leaves nine other election years in which the October seasonal trade was taken. The system profited in...

Read the full article, published on 10/9/2020, by subscribing to The Option Strategist Newsletter now. Existing subscribers can access the article here

The Option Strategist Newsletter $29 trial

Share this

Option Strategist
Blog Search

Trading or investing whether on margin or otherwise carries a high level of risk, and may not be suitable for all persons. Leverage can work against you as well as for you. Before deciding to trade or invest you should carefully consider your investment objectives, level of experience, and ability to tolerate risk. The possibility exists that you could sustain a loss of some or all of your initial investment or even more than your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with trading and investing, and seek advice from an independent financial advisor if you have any doubts. Past performance is not necessarily indicative of future results.
Visit the Disclosure & Policies page for full website disclosures.

-->