February 2021 is gone and our investing and trading report can be closed in the books. February was a good month despite the market selling off the last few days. Our options income exceeded my expectations. We made more money than in January but due to the market weakness, our net liquidation value didn’t move. That made me wonder why since we made money.

But now, let’s jump to our investing and trading report:

We received $1,309.00 in premiums trading options against our holdings this week. For the entire February 2021, we received $4,884.00 premiums. That is almost $5,000 for the month. If I received such income, why our net liquidation value has not moved? I looked at the numbers and I saw it. I had more trades open than before this week that required more buying power, and I increased our stock holdings from $18,179.67 to $29,034.92. All our income was reinvested back into stocks. But because the market was weak the last few days, our margin requirements and stocks moving mostly down suppressed the net-liquidation value of our account.
 

Open trades

The table above shows all my open trades and expirations. It is just a simplified tracking and buying power reduction. My goal is to trade a set amount of equity strangles in what I call perpetual strangle trading. It is nothing fancy. I just have a list of equities I like to trade options around them, I like to eventually own and I accumulate these stocks. Once a trade expires (or nears expiration) I re-open the trade or roll it into the next expiration (mostly trades that a stock is near the short strike and there is a risk of getting in the money).

These trades alone block approximately $18,300 of buying power. I have not tracked this metric of our portfolio before but I will start tracking it to see if my trading is scaling up or down and how it impacts the net-liq of our portfolio and eventually, how it may affect our portfolio during the stock market downturn.

Investing and trading ROI

Our options trading delivered a 15.41% monthly ROI, totaling a 28.70% ROI.

Our account jumped up to 54.03% YTD growth. We are very happy with this result.
 

Our options trading averaged $4,546.50 this year. If this trend continues, we are on track to make $54,558.00 trading options in 2021.
 

We are still on track to complete goals in our portfolio. We made slight adjustments and we are providing our comments to our goals and tasks we set up in the week 6 report:
 

Old SPX trades repair

We are still on track to attempt fixing our SPX trades that still block approximately $12,000 in our buying power. We set a buy-back order for deep OTM put spreads for 0.10 debit. Once these get closed, we will roll the deep ITM higher and sell new OTM put spreads to offset the cost. It will be a slow process but I believe, it will be worth releasing an additional $12,000 in cash. As I said last week, we will be rolling these trades only if it will be resulting in credit rolls or a wash. If rolling for a credit or a small debit (no more than $10 or $15) will not be possible, we will let those trades go.

Accumulating Speculative Stocks

We have sold all speculative “innovative, disruptive” (whatever you call them) stocks. We no longer hold stocks such as ISR, DDD, NIO, NNDM, RESN, XONE, and other similar penny stocks. They do not fit my strategy and I do not believe in them. Overall, I do not feel comfortable with the volatility and risk they provide. One example could be DDD (3D Systems Corporation). That company has been around since 1983 (more than 30 years) yet it has not been able to provide any significant breakthrough that would keep this stock and industry hot for decades in the same manner as Apple (AAPL) or Amazon (AMZN) did in the past and continues to do so today.

Yes, there was a spike of interest in 2012 – 2014 when 3D printing progressed so much that the printers became smaller and capable of printing the entire cars, for example. Even NASA became interested and experimented with 3D printing in space. And people kept rushing into 3D printing companies buying their stocks. After the big fuzz ended in 2014, the stock collapsed and traded in a downwards zig-zag move until today. Now ARK came with an “innovative and disruptive” mantra and people rush into these types of stocks again.

Accumulating Growth Stocks

I am still interested in some growth stocks that would boost my portfolio in the long run. I have created a screener in Finviz.com to help select stocks that are more solid investments and growth potential rather than the speculative penny stocks in overhyped industries such as “electric vehicles”. The screener returns stocks that are considered by analysts, institutional investors, and insiders as a great investment and that these stocks are accumulated by these investors. The stocks also create revenue and growth and increase that growth.

Stocks from this screener we will be accumulating for the long run are currently Cutera, Inc. (CUTR) and The Blackstone Group Inc. (BX). More stocks like that may be added in the future. As long as these stocks appear in the screener results, I will be accumulating them. Once I reach 100 shares of each, I will start selling covered calls.

Here is a picture of the screener and all settings if you want to follow it and try it for yourself.

Accumulating Dividend Growth Stocks

Buying high-quality dividend stocks is our core strategy in our fund. And we will continue to do so and at a faster pace. Last week, we started accumulating Aflac (AFL) stock to reach 100 shares. As of today, we own 21 shares

We want to accumulate 100 shares of each stock in our watchlist or list of stocks we want to own. This lot of shares is not, however, the end number. Once we are fully invested (own all stocks we want to own), then we will start adding on top of those 100 shares.

Our goal is to not only reach 100 shares of high-quality dividend stocks but also create a weekly dividend income from these stocks All it takes to create a weekly dividend income is to buy 12 stocks to spread the income for every week. I created this dividend calendar and track the stocks I want to buy to get this goal done fast.
 

Trading options

We will continue trading options around the stocks we own or plan to own. I call it monetizing our positions. It has a threefold benefit. It lowers our cost basis (at some point we will own all our shares for free), it covers our call sides of each trade and generates an additional income on top of the dividends. And that income is significant as you can see from our report at the top of this post.

Our fund in charts:

The table above shows our current holdings and gains on those holdings. Adjusted columns indicate how options help to boost (or ruin) our stock holdings appreciation, or in other words, lowering the cost basis. Without options, our holdings would be up 4.43% with options, our holdings are up 9.19% (from inception on 4/1/2019). The SPX is up 31.75% since inception. Our stock holdings underperform the overall market. This week, our adjusted stock holdings beat the market. The market gained 1.90% YTD, our portfolio adjusted stock holdings grew by 2.21% (note this includes stock holdings adjusted by options trading, not the entire portfolio).
 

We will continue trading options and accumulating dividend-growth stock next week and report our results on Saturday next week. Until then, good luck and good trading!