Before diving into the May 2016 Income, I have some exciting news to share. As you know, I am a big fan of option writing for passive income. Via the FIRE community I got in touch with few others that do the same. Inspirational! I am very happy to announce that every Monday of June, I will feature an interview with an option trader. Going forward, I plan to do this on the third Thursday of the month.
So, what did the passive income look like?
For now, dividends are only a small portion of my passive income strategy. I have a idea in place to grow my DGI portfolio with mainly Belgian companies (Partly for tax purposes). More on that later.
This month’s income was nice: 84€
This is a nice income for doing nothing. Most of this comes from my new buy Solvay. The rest is from KMI.
Options Premium Income
May has been an interesting month for me. I have made some newbie mistakes with a covered call (selling an option when I was not willing to sell the stock) and the market went against my directional options: GDX took a dive while I was positioned for a stable or higher price. Both events limited my income. Part of the game!
This month’s income was still nice: 197,5€. Compared to my initial year goal, my income this month is still awesome. When I put things in perspective, it is regular. All depends from your point of view. Funny actually.
Going forward, I will adjust my strategy a little. This is related to the outer-space speculation tax in Belgium. Profit out of short term trading on stock (not ETFs) is taxed at 33 pct (trading costs are not taken into account). Till now, there was juridical debate on options and banks decided not to apply the tax. This might change and even be applied retro actively. This will cost me money (I will spare you the details on how option rolls are taxed, in one word: over the top!)
So, my real premium income will be ETF based. Here, I take profit early.
On individual stock, I will let options expire. For a funny funky reason, this is not considered a trading profit (are you still following?) This will happen in another account.
How was your May Income?