April 2020 was a good and exciting month for option trading. Let’s start with the good and then dive into the excitement
I had a nice trading income of 486,25€. I am quite happy with that result. It means that my money works hard for me. The result is a mix of puts and calls (cash secured) and covered calls on my stock.
Here is the breakdown
The option income is concentrated around VTI. This is roughly 40pct of my income. I can be aggressive here, as I have decided to buy this stock. Whenever I see an option that fits my purchase level, I write the put, pocket the money and wait. So far, VTI did not go down to my level so the intent to buy is still there.
GDX is a combination of puts at levels that would lower my cost base and covered calls.
These are the positions I currently have.
This is where the excitement comes from.
Both the QQQ and SPY are calls, and they are not covered by stock I own. They are protected by another call. My total max loss can be 1300USD here. And the last days, both positions flirted with the call strike, meaning that the loss can start.
GDX, I do not mind to be called away. That will give me a nice an healthy profit and the possibility to write juicy puts at real high strikes. So, when called away at 32, I will write the 31 put. I then buy back cheaper. And would they go really high, then, I move on to a next stock.
FXI is a China ETF. I opened that position a few days before they went public with the corona virus. Patience is the name of the game here
Losses I carry forward
And to be transparent, I also show the losing trading that got assignment.
I do not report this loss yet as an option trading loss. It will only be a loss when I close the position and realise the loss. I am optimistic about the world one day going back to massive oil consumption. Probably one last time before we switch to green energy. So, I will keep this position. The juicy dividend is no more. Shell announced a massive cut. And to be honest, I think this is the right thing to do. I prefer less dividend and a company that survives, rather than some money now and a chapter 11 later on.
I will write a put to lower my position even further. As long as that strike is not hit, I get the premium as option income.
I also set up some historical reporting. Just for the fun.
Note that I trade options for fun. To get a balance against boring index investing. And this is not pejorative. Boring index investing is what I want to do. I just need some adrenaline flows as well. Consider it a hobby. A hobby like photography costs money. This hobby pays me
The big loss in August 2018 is the result of AB Inbev going down real hard and me not managing my risk well. I was over concentrated in one stock. And due to my bad personal situation, I decided to close down my full trading portfolio. I only returned at the end of 2019.
Let me know would you have a question for me.