Dividend and option income March 2017

Each month, I track my passive income. And this month is extra special as I start to track my option experiments that I launched in February and March.

Dividend income

Not being an active DGI investor, I do have some dividend stocks that pay regularly a nice dividend. It is always fun to see these appear on your account. In March, this represented 101,83€ .

A quarter of this dividend comes for the first time from crowdfunding. I do have a small portfolio in this asset class. Rather to try and get a feel of what it is. Mixed feelings so far…

Option income

March was a good one for premium income. I ended the month at 587,93. That is 6 cents more than my previous best month! Imagine I can have this as a monthly average… That would be awesome.

image (9)

Reaching this new all time high is actually the result of a trade that earned me the full 2USD. I had a covered call on GDX, at a strike I did not want to sell. (BAD IDEA) It was more an opportunistic play, as I thought it would go down fast. It did first, then the stock went up again, and I felt bad… I closed the position for a net 2USD profit. My broker earned a lot more on this trade. Such is live! I still own GDX, and plan to write calls as soon as I can get a decent premium for the price I want. This happend Friday March 30, in the evening. It pushed my results just above Feb results.

The experiments

In February and March, I started 2 additional option portfolios. Unlike the play money portfolio, these portfolios are 100pct cash secured. That means that I can be more aggressive in my trades and try out other types of play.

Here are the results

Option trading results

When I look at these numbers, I think: Throw it all in your options portfolio!!!

STOP, WAIT, HOLD YOUR HORSES

This is only the result after 3 months, 3 months where the bull went full steam ahead. Before I jumpt to conclusions, I would like to see

  • 2 years of trading
  • A serious correction or crash
  • A few assignments followed by a period of limited income from puts and limited income from covered calls. Results will be pulled down by this.

Want to learn about options?

I started to write some extensive posts on options. A first series is ready! What is a call, then you can read what is a put, exercise time and options specific lingo.

 

For full disclosure, I will give you the calculation approach. When you think it is wrong, feel free to let me know.

for the “my portfolio” and “our portfolio”, it is pretty straight forward

  1. take the initial amount
  2. Take the start date and date of calculation (in this case: March 30)
  3. Take the realized P&L
  4. Plug all of that in the formula “intrate” of google docs

Calculates the effective interest rate generated when an investment is purchased at one price and sold at another with no interest or dividends generated by the investment itself.

This way, I simulate what the yield would be when it is placed on a savings account. As soon as I get stock assignment, I will add the dividends and the return from covered calls and the capital gains from selling to the realized P&L

The total portfolio is a different story:

  • I took the returns as from January, The 2 other portfolios only started in Feb and March. As such, I recalculated them to a yearly equivalent
  • This portfolio contains option premium from stock that I own. I do not calculate the “cost” of the covered calls by adding the value of the stock temporary to the portfolio cost. This is thus an overestimation of the real return. That being said, these stock are stock I hold “forever”

How was your March passive income?

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27 thoughts on “Dividend and option income March 2017

  1. Bringing in 101€ for not being an active dividend investor is pretty good 🙂 That’s more than many of our fellow investors bring in. Of course, it’s not a race. Everyone proceeds at their own pace and through their own method as you are utilizing options and from what I can see doing a pretty good job too. Solid income from your divvys and options. Keep up the good work and I’ll continue to follow your journey.

    Liked by 2 people

  2. Woow 587 only for options income. That is awesome. That is a nice passive income stream.
    I am sure you will get better at this month after month

    Which broker do you use for options trading?

    Our dividend income will be posted this month. I am not doing any options trading. (not yet)

    Great stuff !

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  3. Ciao ATL,
    Nice month I see! I am waiting for some more reports and I wills end out mine, it looks like it was a good month from the data that I have collected. As to your calculation on the returns I would have to see formulas to comment on those. Intrate doesn’t take into account if money was paid in the “fund”, and it might give you a number that is not correct, there was a post that I have used long time ago to make my own index, and that seemed to me as to be the best tool to track total returns on a portfolio… But having said that I’d need to see calculations to really comment on those… 😛
    Either than that it seems that results are getting in, so you should be pretty happy! Any new companies that you are targeting for further additions?

    Ciao ciao

    Stal

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    1. The formula suits my needs for now. When you plug in 10 000 at 1/1/2017 start capital and 11 000 end capital at 31/12/2017, it then spits out 10pct. As I do not plan to add additional personal capital to the portfolios, I am happy with that. Would be different when I add extra capital each month. Not the case for now.
      My focus remains on EU companies. Premium seems to be ok right now. Some are running away from my max wanted price. Maybe ex-div dates ill fix some of that.

      Liked by 1 person

  4. have you or any other reader ever considered to find the compromise between pure DGI and indexing? I mean an ETF that invests in DGI stocks only (and not the whole world, whole S&P, whole whatever) and pays a dividend? I was thinking of starting to build my DGI portfolio on that basis. Buy such an ETF on a regular basis and complement with some DGI stocks that I particularly like, but as such avoiding having to invest in 30-40 stocks; I ‘d prefer the DGI ETF and then perhaps 10 stocks max. DGI etf’s that I have found so far are VIG, DGRO, DGRI.

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    1. Personally, I have not yet looked at that. DGI is not a prime objective for me. One reason people might not be interested is that you pay the ETF costs to manage your DGI stock. I do see the benefit of having to follow fewer stock yourself.

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      1. I am currently in testing mode: pure ETF accumulation, DGI, option strategy, active mutual funds (mijn kapitaal). I haven’t decided yet, but am trying out with some smaller buckets of money. Expense ratio for VIG is 0.09% which is basically negligible for normal sized porfolios. DIY DGI might still be zero, but once you factor in transaction costs upon liquidation a pure DGI porfolio may be more expensive (liquidating 50 positions vs liquidating perhaps 10 positions)

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        1. Sounds like the same restart I took a few years back. It is good that you have an open mind and explore all possibilities. IT is important to discover what fits your personality.
          The 0,09% is actually really really good!
          The downside of DGI in Belgium are the taxes and double taxes on dividends. Hence, I go for accumulation. That means I have to worry about extracting money from my portfolio when I retire.

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      1. Rather painful actually, been far too aggressive at the beginning. Ran into many in-the-money puts/calls. Had to correct with some losses. Might still make some money by the end of April, but it’s far less than anticipated. Will certainly post about it later.

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  5. Thanks for sharing this. I’m going to read up on your posts. I’ve experimented with covered calls and love the approach, especially on stocks with some ability to move. TWTR is a good example. I have no attachment to the stock so if it gets called away at a profit I don’t mind, and I think it has a natural floor because its intellectual property — i.e. it won’t go to zero before getting bought out …

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  6. Nice month will impressive dividend and options income. I would love a market correction soon also in order to take advantage of more opportunities. Thanks for sharing.

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  7. Congratulations on a wonderful month of income, options isn’t for everyone (and not for us) but I love seeing how well you’re doing with it.
    Very nice job with the dividend income, you earned as much as we did and that isn’t even your focus!

    Like

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