Passive income – April 2016

Having a second source of income is a nice thing. It can give a boost to your regular working income. It also brings the prospect of day day exceeding your expenses. The side income stream I work on for now are Dividend Income and Option Premium.

Dividend Income

This one is quite simple and easy this Month: 0€
Nothing to worry about. I am considering DGI as a discovery activity for my future income. I play around wThe result for ith some stock and thoughts. A fun experience.

Screen Shot 2016-04-30 at 08.09.48
I only own the bold ones… the rest is a wish list

I build a small overview of my DGI portfolio, tracking the moments that the stock goes ex-dividend. This way, I can keep track on what happens and can keep an eye on when to keep an extra eye on my covered calls. I also only log the income when it hits my account. At that time, I know the full net amount that is mine.  May looks to be a top month :-). A next step is to track the growth of that income on a portfolio level and on individual stock level. I really like these “I got a raise” posts.

Options income

This is the more experimental part of my play money. Year-to-date, i can not complain. Compared to my yearly goal, I am way ahead. I reached 96pct. I thus decided to stop putting a target on it.

Why not stretch myself? I do not think it is wise to push myself over my risk limits any further. I already go above the value-at-risk I wanted to manage. I do not need a public goal that pushes me in danger territory.

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The April result was great, beating my March record. I earned 403€ in option premium this month. This beats my expectations. I have earned via a total of 7 stocks premium income. By fare the biggest earner is GDX. This one alone represents 214€ of the total.

I am also happy that I was able to take a small profit on a long standing option going the wrong way. This frees up some of my capital for better use elsewhere.

Does this mean that all is peaceful and risk free in option writing land? No, it is not. As mentioned, sometimes the puts go very deep in the money and this is something you need to digest well. Stupid mistakes also can cost you money. I made one last week, selling a covered call on my GDX positions. I had a part foreseen for call writing. I overlooked I already had a call open. So, selling a second one should not have happened. As a result, I could now miss out potential gains from the current rally. We will see on May 20.

How was your April income?

 

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32 thoughts on “Passive income – April 2016

  1. March and April have been quite “decent” months in terms of stock performance, and I guess that here is where options are really a huge help to a DGI portfolio. Normally when markets are rising there is little action, but I can see more and more that options can grant extra return if well played. Great job on the amount you are making, I hope that I can soon join the ranks of the options traders… 🙂
    When you sell puts do you broker holds on all the money that you would have to pay if the option expires ITM?

    ciaociao
    Stal

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    1. Options can help boost a portfolio return. You need to be willing to have swings in profit on individual options and hold options for a longer than wanted time.
      In Belgium, you either have the cash blocked on your account, usually via a margin. This is less than the total amount if assigned. The other alternative is collateral. I use both cases and have in any way cash available on the side via a savings account

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  2. Wow, your option profits are going through the roof! Nice work AT. Looking forward to seeing your DGI updates in the future. We are still awaiting confirmation of the final dividends for April, should have the final update by the end of the week, but it should rival your €400 option income.

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    1. The options are doing well for now… I am curious to see what a big market crash will do with my positions…
      I look forward as well to my DGI income.
      I look forward to see your April passive numbers

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  3. hey,

    awesome month! I remember your last income post. options income was under 300 dollars I think.
    Very good progress here.

    congratulation on your first dividend growth stock. 🙂

    Keep up the great work 🙂

    best regards

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  4. Wow I should look more into stocks that produce strong dividends. Up until now I’ve been mostly focused on capital gains, but passive income seems like much less stress. Do you ever get stressed trading options?

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    1. I used to stress out the first time I got 3 options deep in the money at the same time. Now, i am getting used to it.
      I just wonder what will happen when the next big crash happens and the damage is really massive.
      I try to have some gold and regular stock options on. They should behave different in times of great stress. The key word here is “should”

      Liked by 1 person

    1. Not sure I understand teh question.

      The jump in income is due to the markets being more volatile in the stock I trade. I also was more aggressive in writing my puts.
      Covered calls are only a small portion of my portfolio. Most of them indeed go in the money

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  5. Making mistakes is OK……especially if it is only with relatively small amounts of money.
    If you are not making mistakes, you are not doing much of anything.
    Good work.

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  6. I really respect option investors! Such a tough and risky business but you seem to be doing very well! I am now starting to build a dividend portfolio so hopefully I can see the returns in the future years. I need to build a spreadsheet to track the ex-dividend dates. What are your thoughts on capital stocks? I am gradually heading towards having gold and 2-3 other stocks in my portfolio with the rest being dividend income stocks.

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    1. Gold and gold mines are assets in my portfolio. I am a believer of the stabilizing effect of these in my portfolio.
      Most of my assets are funds. I slowly get into DGI now

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      1. Ciao ATL,
        What gold do you own exactly? ETFs? Physically backed? I was looking into that too, it’s a way to stabilize the PF, especially during bad crashes…
        ciao ciao
        Stal

        Like

        1. A mix of all to keep it simple…! 😉
          I have gold mine tracker GDX. It provides leverage on the price of gold.
          I also own PHAU, that is is a physcical backed ETF. They have gold bars in a vault in London.

          Like

            1. Me too!
              About 15 months ago I got the need to own gold and bought PHAU. It is still under water now.
              By the end of 2015 I had done a lot more reading and research. I now realize that GDX is more my thing.It blends in well with the play money portfolio I have.

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