Interview #11 – Roadmap2Retire

The next interview is with R2R. He uses options  to supplement dividend income. Let’s get started
How did you get an interest in option trading?
I have always been intrigued by options trading as leveraged play on equities. I understood from the beginning that gains and losses were more pronounced with options. I knew of some people including family members who used option trading as an extra source of income. I have always wanted to learn about the process and benefit from it.
What actions did you take to learn on option trading?
Options are notorious in burning fresh/new traders and I was no different. I lost some of my money when I started. There were a few wins too, but it was more luck than anything. I decided to slow down, let the option strategies sink in over a period of months/years before I got more comfortable and figuring out what works for me.
What is your goal/ambition?
My goal with option trading is to supplement my passive income by writing calls. My assets are currently in tax sheltered accounts, so I am limited to the type of options I can trade. For now, covered call option writing is the way forward unless I move my assets (which I do not intend to).
How do you describe your style? Did this evolve over time?
I tried buying calls, puts directly and selling them after holding for a few days. Very soon, I realized that I didn’t understand them enough and decided to pause. I later learned how to trade options a bit more conservatively such as writing covered calls. For now, that is my main option strategy to generate income.
How much time do you spend on trading options?
I monitor my portfolio daily. If I see markets extend too much on a security I hold, I will write a covered call. It is my way of taking some profits off the table. It takes only a few minutes each week.
How do you deal with the risk that comes with option trading?
Since I stick to covered calls, my downside is limited — unless the underlying company tanks due to collapsing fundamentals. I usually tend to buy stocks and write covered calls on companies that I understand well (and well researched) and am comfortable holding for an extended duration.
What tools/sites/blogs/podcasts do you read on option trading?
I follow fellow bloggers such as Passive Income Pursuit, Options Hunting, Two Investing etc for ideas. Occasionally I will look at optionalpha.com to learn more, but I havent nearly spent enough time on it yet.
What is the size of your option trading account?
Undisclosed 🙂
Where do you get inspiration for trades?
Fellow bloggers as mentioned above. Also, staying up to date on the companies I own in my portfolio.
How do you track your trades and P&L? Where can we follow your results?
All trades are tracked in a spreadsheet I share on my blog. The page can be found here: http://roadmap2retire.com/options/
What is the worst trade ever you did?
Buying a VIX call a few years ago and holding it for a long time (about 3 weeks) and getting a real life lesson about time decay in options.
What is the best trade ever you did?
A series of trades buying call options on SPY during the QE days. The QE dates were pre-published by the Fed on the bond buying program with amount and schedule. Markets were going up on those days without fail. I used to buy SPY call options and hold them for a day to turn a quick profit.
Where/how can we follow your progress?
I share my trades on my blog: http://roadmap2retire.com/options/
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7 thoughts on “Interview #11 – Roadmap2Retire

    1. Haha I wouldnt call myself an advanced trader. But I have let the idea of option trades sink over the course of years and now can say that I understand some of the movement and things like time decay well.

      Best
      R2R

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  1. Thank you for the interview and the opportunity to introduce myself to your readers, AT. Always enjoyed this series and learn something from everyone and hope my experience can help others.

    cheers
    R2R

    Like

  2. Another great interview. Thanks for sharing. I follow R2R regularly and it’s interesting to follow his own journey and experiences with options trading. More and more of our fellow bloggers have been turning to options to generate extra income and are hybrid dividend/option investors now. Never heard of optionalpha.com before. As I’m still on the sidelines of options trading I want to try and learn as much as possible before I dip my to in the water.

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  3. I thought you only invested in stocks! Good to see more and more people are learning options and trading them. I also use them to supplement my dividend income. In fact I build a dividend portfolio for income in 25 years from now and trade options for income now. Not always easy!

    Liked by 1 person

  4. Great interview, a lot could be learned for newcomers (like myself) with this interview. Thanks for sharing your thoughts. It was very interesting.

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