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.

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

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?