May has been a great month. Plenty of public holidays with good and great weather, time with family and friends and a party for the 40th birthday of my wife. What else would you want? And then I looked at my total passive income. It is just amazing to cross the 1000€ mark in a given month!
Let us start slow, and build up gradually to the final result.
Dividends – 23,98€
May has been a bad month compared to last year: a 62 pct drop. Not a reason to smile. Just be aware that dividends are actually an accidental income, part of my play money. I do not focus on this. The drop is caused by the sell of an investment that pays in May.
Capital gains – 321,7€
May has seen a massive capital gains income. This is all the result of 1 covered call: my RDS.A shares have been called away. No real reason to be sad. I will write put options at strike 24 until I am assigned stock again. When that happens, the put premium will have outpaced the missed dividend payments.
By design of my trading strategy, these capital gains are more a one off thing that happen exceptionally.
Option income – 704,17
A new monthly high! and this for the 5th month in a row this year. WOOT WOOT!
Part of this is due to the fact that I added more capital to the options portfolio (the cash of my RDS.A sales and some left over cash in a given trading account). As far as trading goes, I stay roughly 90pct of the time loyal to my strategy and plan. I dare to do a gamble trade once in a while. Some go good, others will take time to recover.
As mentioned before, I need to think about setting up trade diversification as well. Right now, when the market will crash, I will take a major hit and end up with a lot of stock. During that time, it is very unlikely that I will be able to sell puts, and it will take time before I can sell covered calls. My income will thus drop. Will I be ready for that to happen? It is not something to look forward to.
Current use of leverage: for each 100€ in option contract exposure, I have 60€ cash.
Current annualised return: 15,4 pct (this is after all trading fees and applicable taxes). Imagine that this continues… would be insane… More realistic is 10 pct.
Total – 1049,85€
Seeing this number makes me pinch my arm. Is this real? IT is beyond my wildest dreams!
I do realise that roughly 30pct of this is exceptional. The capital gains are in general not there. Crossing that mark is thus more a gimmick than a result I can expect every month.
How was your monthly income?