WHAT WE DO? WE SELL OPTIONS FOR INCOME. WE USE THAT INCOME TO BUY DIVIDEND GROWTH STOCKS!
CHECK OUR TRADES ON OUR FACEBOOK PAGE OR HERE.


August 2016 trading, investing, and dividends results

August was a bit slow and my investments stalled. Many of my trades turned against me and I had to wait longer for them to end or expire than expected.

However, I expected August to be slow due to consolidating my trading. In July I made an all time high revenue when I pocketed $5,734.00 dollars in premiums. But such trading was a stretch as my account was not yet big enough to achieve such level of collected premiums. I was taking riskier trades, more trades than my money management allowed, and at several times during July I didn’t feel comfortable with my extended trading. The collected premium was nice but I didn’t like the way I did go for it.

In August I didn’t want to trade that way and I wanted to have my trades easy. I wanted to trade and feel comfortable with my trading. I think, I was successful with that plan in August although I had a few trades which made me uncomfortable. I still have too many trades open, in the money, and unable to get rid of them. I need to find a strategy how to prevent this situation and how to end my trades faster without taking a loss. So, in September, I will be working on consolidating my account, lowering the amount of trades open and improve my money and trade management.

In August, I made $2,528.00 in premiums trading options. It is however well below my original expectations as I planned on reaching at least $3,000 premiums this month. For September I am thus adjusting my expectations down and plan on making $3,000 in premiums.

August is a weak month in my dividend portfolio. My dividend income this month was lower than in July. But it was bigger than other weak months such as May and February. The dividend income this month was $59.16 vs. $86.21 last month.
 

Options Income = $2,528.00 (account value = $10,270.17 +304.38%)
Dividend Income = $59.16 (account value = $19,997.26 +32.08%)
 

If you wish to see details about each account, continue reading below.


 


 
You may be interested in:

 
Options Trade – Sold a Put in VOD By ADY with Average Dividend Yield

 
Dividend Update Preview – August 2016 Infographic By PIP with Passive Income Pursuit

 
The Next Big Rush – Getting Properly Educated in Mining Stocks By FI FIGHTER with FI FIGHTER

 
Cash Secured Put – Valero Energy By Will with Investment Hunting

 
Rolled Sept TLT Covered Puts By Alex with My Trader’s Journal

 
OAP 059: Short Strangle Case Study – Adjustment Strategy That Slashed Our Loss By 87% By Kirk Du Plessis with Option Alpha

 


 

 

 · August 2016 trading results

As I mentioned above my trading in August was slow. It was a planned slow. I wanted to trade this month without stress. Except a few exceptions I was successful with it.

I also adjusted my strategy and money & trade management by adding a trading calendar and number of max. trades I can take in a month to trade often and not to overtrade.

Below is a quick review of all trades I made this month.

I also post my trades in real time on Facebook. When I post a trade I try to write my reasons for taking that trade and write all my feelings about it and plan I am about to take for that trade.

If you want to see and follow those trades, new trades I open and why, you can join our Facebook group. There are other traders like me posting their trades and ideas. You can follow those trades (mirror them), paper trade them, or just watch them and learn.

 

Here is my trading result for the month:

 

August 2016 options trading income: $2,528.00 (99.54%)
2016 portfolio Net-Liq: $10,270.17 (1.44%)
2016 portfolio Cash Value: $19,020.67 (19.82%)
2016 overall trading account result: 304.38%

 

Here are the results of my options trading:

Options Income
(Click to enlarge)

 
Here is my monthly income from options trading:
 

TD Account Value

 
Here are the results of my options strategy:

 

The table above shows my trades up to date. They are real trades I really traded with my own real money. Some people do not believe it could be possible and call me names, fake, liar, and fraud. But what you see in that table above is the final result of my trades management. You are looking at my ability to turn a losing trade into a winner. So the end result seems too good to be true, but it wasn’t that easy.

Not all trades were immediate winners. Some turned bad the very next day and some required an extensive management and adjustments to end them in green. Mystics, Random Walk academics, and Efficient Market theorists are typically and equally divorced from the reality of the market and trading. Amateurs who love forecasting and mysticism (Alexander Elder, The New Trading for a Living), will not get it and will cal you names.

My average trade holding time is currently 19 days, average P/L 2.00% and 84.86% annualized return.
 

I have a plan for 2016 to create income from trading:

2016 plan $1,000 monthly income – COMPLETED in July 2016
2016 plan $2,000 monthly income – IN PROGRESS ($1,505.63)
 

 
Here are results of the individual trades I traded this month:

 

ESV

Options Income
(Click to enlarge)

ESV continues lagging. The stock continued sliding down and it looks like there is no floor underneath.

Unfortunately, I have been assigned to the stock in April this year at $11 a share, so seeing the stock at $7.46 is a bit unpleasant. However, I collected more than $1,000 dollars in premiums so far and that money collected is offsetting my loss.

I collected $1,050.10 in premiums and my current stock loss is $708 dollars. I am $342.10 dollars above water here.

But I want more. I do not want to be closing the position at a loss although overall there is no loss. For this I will continue holding the stock, collecting the dividend, and continue selling calls and puts to offset the losses as long as the stock starts recovering and gets back up above $11 a share where I liquidate my positions.

Last month stock selling, however, caused my covered calls to be bought back at 50% credit profit and I could sell new covered calls. Now I hold new covered calls and the original short puts which are now deep in the money.

 
LULU

Options Income
(Click to enlarge)

Last month I opened a jade lizard trade against LULU hoping that I would be able to get out before earnings. At first the trade went as planned, but as the time of earnings approached, the stock stalled and I got stuck in the trade. It never reached my buy back order (and maybe I should have taken less profit and close it, but back then I believed this stock will perform well).

The company reported earnings at the end of the month. They missed by a very little (their in store sales were 5.0% and analysts who usually pull their numbers out of their anal expected the stock to make 5.9%) yet the Wall Street reacted like it was the end of the company and the world.

It was the same knee-jerk overreaction as we saw with STX last quarter. So I think. this stock will recover faster than many bears (and some weak bulls) expect. For this reason I am staying in the trade and wait. If the stock stays below my short put strike, then I will make some adjustments to the trade such as rolling, converting into an inverted strangle, naked calls, or reversed jade lizard. I will see in September what will be the best approach to do.

 
TRGP

Options Income
(Click to enlarge)

TRGP is now a waiting game. I have two rolled trades on, waiting for the time value to destroy itself so I can close for a profit and be done with those trades. The stock performs well and I expect it to continue performing well.

 
PSX

Options Income
(Click to enlarge)

In August I opened a jade lizard against PSX. It went well, but later the stock stalled and started falling down. Along with my other positions this started creating a dangerous situation in my account as I was getting too close to my margin limit. So I decided to close the trade for a smaller profit than planned (I learned from LULU).

But as is typical with Mr. Market, he didn’t want to give up so easily. And because I had the remnants of the lizard on I planned to add a protection to the calls by selling new puts should the stock rally again.

Well, if something can go wrong, expect it to go wrong. The stock rallied and I decided to sell new puts to offset losses on the call side. As soon as I sold new puts, the stock tanked again and I had to close the puts again although for a small profit.

I still hold the bear call spread and hopefully it expires worthless. If not, I will be taking a small loss or try to close the spread earlier.

 
STX

Options Income
(Click to enlarge)

STX is also performing well and it is a waiting game now waiting for the stock to move higher so I can close my positions for a profit.

I described my struggle with STX in the second part of my previous post on how to manage losing trades.

 
OKE

Options Income
(Click to enlarge)

OKE was a trade which was performing well at first but later turned sour. It dropped in the money ans stalled in that level. It looked like ages for it to finaly move above strike so I could close it after 31 days being stuck in the trade. Now I am out of this trade and do not plan re-opening any new position against OKE (but it may change of course).

 
WYNN

Options Income
(Click to enlarge)

WYNN is my golden stock right now although it doesn’t look like that and it is giving me a hard time. In August I started opening jade lizards against WYNN collecting nice premiums. Trading went very well until the stock suddenly dropped and left my trades in the money.

Those trades with short put strikes 100, 99, and 97.50 are now deep in the money but have good amount of time to recover. To collect more premiums I sold a naked call and reversed jade lizard. But last week on Thursday the stock jumped up by 5% and left those bearish trades in the money (I didn’t expect recovery this fast). So I converted those calls and reversed lizard into puts and standard lizard. Now it is a waiting game again waiting for the stock to recover.

 
MOS

Options Income
(Click to enlarge)

In August I could close this trade for a small profit even though the option was in the money.

 

If you like these trades and want to be informed when I place them and trade them in real time, you can join our closed Facebook Group. The group is a closed group and there are other traders posting their trade ideas too. We learn from each other, eventually ask questions, get answers, but most importantly you can see what we trade and how. You can follow those trades.

 
Here is the entire account value from the beginning of tracking it up to today:

TD Account Value
 

 

 


 
You may be interested in:

 
ACHIEVING FINANCIAL FREEDOM By Eric Bowlin with Eric Bowlin

 
Start and Setup an LLC on-line in Less than 6 Minutes By DEREK CHAMBERLAIN with Money Ahoy

 
Swing Trading Whole Foods By Dennis McCain with Dennis McCain Investing

 
Option Trader Interview #6 – Hello Suckers By Amber with Amber Tree Leaves

 
What Would George Costanza Do In This Market? By Super Saver with My Wealth Builder

 
Straddle the Market to Profit From Uncertainty, the Valeant Way By Option Pundit with Option Pundit

 


 

 · August 2016 dividend investing results

August is a weak month along with May and February for me. I might be looking for companies which pay dividends in those months to boost my dividend income in those months.

I use DRIP to reinvest dividends and what I like to watch is how DRIP is affecting my dividends and a slow growth of my account.

To speed things up I decided to trade options in ROTH IRA although not as a primary source of income, just to increase money to be able to reinvest them. So I sell puts against stocks I do not mind owning such as PSEC, ETE, ESV, etc. (I do not have yet too much money available to invest into options, so I have to stick with cheaper and riskier stocks).

I decided to create three sub-accounts (created in my spreadsheet as a mental sub-accounts) with a certain purpose. Here is my plan for 2016:

1) In 2016 I want to save $1,000 for great opportunity. Time to time a stock with a great opportunity shows up. A sudden fall in price or selloff can happen. Then, I do not have cash to buy such stock. This fund would serve this purpose to have cash to buy.

2) My next “virtual account” is dedicated to options trading. In 2016 I planned to save $2,000 dollars and use them for options trading. This month I was able to save $2,000 and have it fully invested in options to generate cash. All income from options is now being relocated to my “Great opportunity virtual account”.

3) Once my “Great opportunity virtual account” will be funded I will be relocating all income into my next virtual account – stock purchasing account. Once I save at least $1,000 in this account, I will buy shares of a stock in my buy list.

Well, little game of mine.

But, it helps me to stay on track.

Here is a picture of my spreadsheet showing my “virtual accounts”:
 

Options Income
(Click to enlarge)
 

Here is my ROTH account review:
 

Options Income
(Click to enlarge)
 

My annual dividend income this month increased from $920.74 to $931.56.

 
Dividend stocks added or removed from portfolio:

 

August 2016 dividend stock buys: none
August 2016 dividend stock sells: none

 

To purchase stocks I use trailing stock order strategy OTO trade order (one triggers other) and I described this strategy in my post about purchasing stocks in falling markets.

I also invest into dividend paying stocks using Motif investing which allows me to buy all 30 stocks I want in one purchase using fractional investing, similar to a mutual fund.

You can actually build your own mutual fund with Motif investing.

Here is my Motif Investing account you can review:
 
 

 

 
 

I continue reinvesting my dividends using DRIP program. I love how my holdings grow when reinvesting the dividends and when the stock prices are going lower. As I believe we are heading into a recession I will be able buying more shares for a lot cheaper.

 

Dividend stocks DRIP:

 

April 2016 DRIP:

American Capital Agency Corp. (AGNC) $31.42
MasterCard Incorporated (MA) $3.06
Kinder Morgan, Inc. (KMI) $5.70
Realty Income Corporation (O) $10.11
Prospect Capital Corporation (PSEC) $8.87

 

Here are my ROTH IRA trading/investing results:

 

August 2016 dividend income: $59.16
August 2016 options income: $0.00
2016 portfolio value: $19,997.26 (-2.91%)
2016 overall dividend account result: 32.08%

 

The account shrank by -2.91% from last month, overall I am up 32.08%. The dividend income was down from last month as August was a weak month. All dividends were reinvested back to the companies which generated them.

 
Here is my dividend income:

ROTH IRA account value
 

 
Annual dividends since the beginning:

ROTH IRA account value
 

Here is the entire account value from the beginning of tracking it up to today:

ROTH IRA account value

 

 


 
You may be interested in:

 
August 2016 Income By Scott with Two Investing

 
Options Trade – AAPL By David with David’s Financial Freedom Journey

 
Weekly Trade Setups Ideas & Market Analysis – September 5th to 9th 2016 By Nial Fuller with Learn to Trade the Market

 
Stocks and market predictions By Martin with Vetr

 
A Banker’s perspective on your loan application By TFB with The Financial Blogger

 


 

Below is my dividend income review for the entire year:

Dividend Income
My ROTH IRA dividend income breakdown per month and per company.
 
 

 · All accounts

Besides trading and dividend accounts I also have 401k account, emergency savings account, etc., which I do not report in detail. You can review those accounts in my “All Accounts Value” table at the bottom of My Trades & Income page.

My accounts increased from previous month and are making 37.05% (up 2.51% from previous month) for the year.

 
Options Income
 

Remember, if you like trading options and want to have trade ideas for free, join my Facebook closed group and follow my put selling trade ideas in real time, comment, ask questions, and interact with other members. Other members of the group can also post their trades so you can learn from them too.

 
 

You can join the options trading group here

 
 

What do you think?

How about your investing or trading results?

Do you have any question? Need help to start trading or investing? Shoot me an email or let me know below in comments how I can help you.

 
 





9 responses to “August 2016 trading, investing, and dividends results”

  1. DivHut says:

    Your options premiums continue to roll in. Looks like you made a lot of trades for the month and I wish I understood them a bit more. The entry price and exit price are the options premiums you receive when you open to sell and then buy to close? Am I making sense? I still want to better understand how these options trades work. Great update between your premiums and dividends received.

    • Martin says:

      Hi Keith,
      Yes you are correct. When I open a trade and sell a put, call, or any similar structure (it could be a jade lizard or strangle) I receive a premium. The premium is equal to the value of the option or structure and it is time sensitive so as the option nears expiration and it is “out of the money” the value is shrinking (the premium would be smaller if I sold the same put again e.g. 20 days after the opening of the first put). When the value is lost enough, I buy the put back. It is similar as shorting the stock, you sell the stock, when it loses value, you buy it back. The difference is yours.
      If you are on Facebook, you can join our trading group and follow those trades and see how they work.

  2. Congrats on a fine month. It’ might be off for you , but it’s still very impressive. Thanks for sharing your trades.

    • Martin says:

      Actually it is not off at all. I am impressed too because before my trading was losses only. This is actually a first year with consistent winning. But too early to judge. I was learning a lot over the last four years and the path to this point it full of dead skeletons I would prefer left buried and don’t look back only to learn from those mistake I made in the past.

      Thanks for stopping by!

  3. ambertree says:

    It is important to feel comfortable with the trading strategy and trade within the money management rules laid out.

    Your option income is quite nice compared to mine.

    Keep trading

    • Martin says:

      Yes, it is a key thing in trading. When you are comfortable even though you are wrong with the trade and your original expectation then you can afford to be wrong. I was building up this income over time with quite aggressive trading and now I am about to ease it out.

      Thank you for stopping by and commenting!

  4. easydividend says:

    Hi :)

    I think in the next year I will take some money from my option trading account and try to keep up with you. Your trading results are amazing. For me the trades are a little bit too risky, but if I take only a small amount of my account I think I can live with it.

    I am trading far more conservative. Trying to make between 1 and 5 percent each month on a 50.000 euro account. It is a saver way, but i think it will not be too bad if a try a littler riskier with 5000 dollar or something like that.

    Thanks for sharing!

    Best regards

    Chri

    • Martin says:

      Hi Chris, I do not think that the trades are risky, They only look like that but in fact they are not. The point is in being able to play with the trade to keep it positive until it ends as a winner. For example, if I trade a jade lizard and I have a naked put and the stock tanks, what would you do with the put? You have a plenty of options of what you can do:

      – let is assign and start selling calls
      – roll it lower and away in time
      – convert it into calls
      – create an inverted strangle
      – create a reversed jade lizard

      All these adjustments will keep you in the trade (not taking a loss) and convert your trade back into a winning trade. But of course, there is no free lunch with those adjustments. They will cost you – time, and some also more margin.

      For this reason you HAVE TO STAY SMALL!!! If you overtrade, you are done and will be forced to take a loss.

      So the best way to learn and gain confidence is to try one trade and as you said copy me and learn from it. When I was learning options I did the same – copying my mentor and learning from his trading. If you need more help to stay on top of a trade let me know and we can come up with a plan how to guide you through a trade without getting you lost in the middle. Also if you get lost in the middle you can always send me an email with questions on how to fix a trade.

      Believe me, those trades look risky but they are not. The risk is actually elsewhere (trade and money management).

      Good luck and all best
      Martin

Leave a Reply

Your email address will not be published. Required fields are marked *