Options always work for you. The goal is that they work hard and reach 0 by expiration. At least, that is what my strategy of option writing is about. January was a normal month. The last days were difficult and early February is bad…
Option income – 648,34€
With the experience and stats of 2017, I consider this a normal, average month. It puts me on track to a 11-13pct return on my invested capital. So, nothing to complain here.
The option income came from 14 stock/ETFs. I quite like that the income is diversified and not depending on one big lucky shot. That being said, the most profit came from one ETF, for a total of 18 pct. The next one is around 13pct. That makes 31pct of the profit from just 2 stock. Good news is that it represents multiple trades in these stock.
Until now, my option trading has been around selling puts. This means, I need the market to go up, stay where it is or only have a small down move. I have said it before: that is not sustainable. How to deal with it?
My mix of stock has some (un)correlated items with gold, silver and oil next to “regular” stock. I also try to add some stock that went through a correction – assuming that they will correct less in a market correction. Time will tell…
Next to that, I now start to sell calls as well. It requires the market to go down, stay where it is or not go up a lot. Actually, i combine the puts and calls on the same stock. Results so far: not a lot. I guess it takes time to have enough trades to analyse if this is for me or not. What bothers me most are the naked calls. I can not manage these well. Maybe I need to adopt more a trading strategy and take losses…
Elephants in the room
TEVA – grandfather elephant
Still there, now 22pct ITM… Best it has ever been. I keep it for now, rather than trying to reduce it. There is almost no credit accumulated into the position.
(not disclosed) – father elephant
17 pct ITM. When it is rolling time, I will see if I can lower the strike a little. Or try to maximize the credit I can get. Once enough credit is accumulated, I might be able to quit the trade.
AMS:AD – baby elephant
Went down to only one ITM option. Back to 2 positions.
EBR:ABI – This is actually now a mega size elephant. I got too excited when it reached a “support” and now it is just too big in my portfolio. A good lesson. I learned that a position should never be too big. I think 20pct is a good limit. It could also mean I throw in some protection options.
How was your option month?