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2021 Week 10 investing and trading report

Last week was difficult and strange at the same time. As the stock market continued recovering its recent 5.9% correction our account net liquidating value dropped. It was frustrating, mainly because we haven’t opened any new trades, only rolled the old ones. I was angry seeing our buying power fluctuating for no particular reason. Of course, there was a reason – the broker. Although the market was going up, the volatility was going up too, and our capital requirements with it. That caused margin calls and dropping net-liq. In this week’s investing and trading report I will provide insight into this issue.


Here is our investing and trading report:


Account Value: $30,647.49 -$945.83 -2.99%
Options trading results
Options Premiums Received: $697.00
01 January 2021 Options: $4,209.00 +16.65%
02 February 2021 Options: $4,884.00 +15.41%
03 March 2021 Options: $2,118.00 +6.91%
Options Premiums YTD: $11,211.00 +36.58%
Dividend income results
Dividends Received: $4.99
01 January 2021 Dividends: $53.04
02 February 2021 Dividends: $63.00
03 March 2021 Dividends: $11.64
Dividends YTD: $127.68
Portfolio metrics
Portfolio Yield: 3.47%
Portfolio Dividend Growth: 7.44%
Ann. Div Income & YOC in 10 yrs: $2,890.88 11.07%
Ann. Div Income & YOC in 20 yrs: $15,395.55 58.95%
Ann. Div Income & YOC in 25 yrs: $48,135.69 184.32%
Ann. Div Income & YOC in 30 yrs: $203,652.61 779.82%
Portfolio Alpha: 29.52%
Portfolio Weighted Beta: 0.67
CAGR: 684.96%
AROC: 28.62%
TROC: 27.12%
Our 2021 Goal
2021 Dividend Goal: $1,071.42 11.92%
2021 Portfolio Value Goal: $42,344.06 72.38%


Last week, we received $697.00 in premiums trading options against our holdings. However, all trades were just adjustments and rolls, no trade was a new one. For the entire March 2021, we received $2,118.00 premiums. Our non-adjusted stock holdings market value dropped from $30,044.95 to $28,642.83, a $1,402.12 market value reduction. All our income was kept in cash.

Open trades

Investing and trading report

The table above shows all our open trades and expirations. It is just a simplified tracking and buying power reduction. Our 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).

Although, we have not opened any new trades we experienced a significant jump in buying power reduction. The BP reduction jumped from $20,332.53 to $28,780.90, an increase of $8,448.37. That is a staggering and sudden jump of 41.55%. No wonder our net-liquidating value dropped.

This caused our broker to issue a few maintenance calls (a version of a margin call) and we had to sell positions in the ICSH fund to release cash. Yet it was not enough and we had to roll some trades to adjust the BP reduction. For example, our Boing (BA) trade released almost $2,000 in BP after we adjusted the trade although our BA strangle was safe and out of the money. The only reason for the BA BP jump was that the company was about to report earnings and its IV went up significantly. Rolling farther away and centering the stock price between our strangle’s legs helped in reducing the BP requirements.


Investing and trading ROI


Our options trading delivered a 6.91% monthly ROI, totaling a 36.58% ROI.

Our account decreased to 48.97% YTD growth. We are still happy with this result as I do not expect our account value to go up only. There will be days when it will go down. The goal will be to keep it going up overall but fluctuations are normal and expected.

Our options trading averaged $3,737.00 per month this year. If this trend continues, we are on track to make $44,844.00 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


Last week we had a chance to start repairing one of our SPX trade. We closed an old SPX put spread for 0.05 debit, then rolled the calls higher and away in time. After the rade rolled, we opened a new put spread to offset the cost of the entire roll. Unfortunately, rolling Iron Condors has to be done in two trades unlike strangles where you can roll both legs in one trade. And also, to reduce the BP requirements, one leg (in our case the put leg) has to be closed first in order to roll the endangered leg without doubling the BP requirements.

Here are the tickets of the trades we took:

Old SPX trades repair wk 10

The trade adjustment required 0.40 or $40 debit to roll it higher (closer to the money). Our goal is to do it several times to get the calls out of the money, even if the put side being in the money, have the calls expire, and roll the put side only, and hopefully, one day, have the put side expire too. This trade blocks $2,500 buying power. If we keep the cost of adjustments down, it makes sense to salvage this trade. If it starts becoming costly, we will let it go.


Accumulating Growth Stocks


This week, our net-liq and buying power prevented us from accumulating the growth stocks. It is still our plan to have at least 10% of the account value in these stocks. As of now, we hold BX and CUTR only.

We created another Finviz screener to pick stocks that are poised to spike up significantly. This screener looks for an unusual volume spike and price movement with strong upward momentum. It picks stocks in a small-cap category but it can be changed to “mid”, “large”, or “mega” caps. But the selected candidates need to be reviewed further.

Finviz screener

Some of the selected candidates will be already extended, you want to avoid those. You do not want to chase the stock. Some candidates will show bearish setups but the screener is a bullish set up so you are in fact looking at a contradictory stock and you do not want that either, e.g. DRRX.

Then you get a nice setup like NOG on the picture if on Monday you see it breaking above the resistance (e.g. $12 a share), you may enter the trade. Others will be already in a breakup runaway like FLNT, which could be a good stock to enter on Monday too. But since it already broke on a large volume and long candle, there may be a pause. You can still enter the trade but use stop loss!

This link can get you to the screener.


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 46 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.

Weekly dividends income calendar

We are also interested in adding some high-yield, yet still safe, dividend earners to further boost our dividend income. I found a few good stocks and closed-end funds, candidates I believe are worth accumulating. Every month I will be posting these stocks, accumulation progress, or stock removal from the portfolio. These stocks or funds may be riskier than the aristocrats and I plan on monitoring them carefully. When the stocks no longer meet my criteria and/or underperform, I will remove them from our portfolio. My first list for March accumulation can be found here.


Market Outlook


The stock market posted its first correction in 2021. We dropped by 5.9% from an all-time high and everybody out there was predicting a crash, doom, and end of the world. Yes, the market is vulnerable, there is a lot of fear, but, in my opinion, this fear is not justified.


Market correction

It is perfectly normal and expected to have corrections on the way to new highs. No one should ever expect the market to go up only. There will be corrections. But I do not expect a crash like you can see predictors on Youtube predicting. We see VIX elevated these days. The normal mean value of VIX is in the 10 to 20th level. As of today, we are significantly above that level. Until we see complacency in the market, do not expect any crash.

SPX March 2021 correction

Instead, after a painful initial 5.9% correction, the market briefly dipped below its upward moving trend and today, it is back above it. Comparing several indicators and past historical signals when the market behaved in a similar manner to today’s price action, I expect an additional 15% to 75% gains in the next one to five-year time horizon. Will it be a smooth ride? No. But we are going up.


Trading options


We 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:


TW Account Net-Liq week 10

TW Account holdings week 10

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 9.68%. With options, our holdings are up 16.48% (from inception on 4/1/2019). The SPX is up 36.32% since inception. Our stock holdings underperform the overall market since the inception of the fund (up only 16.48% on a cumulative basis). However, this week, our adjusted stock holdings significantly beat the market. The market gained 6.47% YTD, our portfolio options-adjusted stock holdings grew by 9.49% YTD (note this includes stock holdings adjusted by options trading, not the entire portfolio).

TW Account holdings Growth YTD

TW Options Income week 10

TW Options Annual Income week 10

TW Received vs Projected Dividends week 10


Conclusion of our investing and trading report


This week our options trading got significantly extended and we have deployed more capital than we can handle. It was not because of opening new trades but due to the implied volatility spike. Until the volatility drops (or we add additional funding) we will not be opening new options trades next week.

If we stay in the already opened positions, we will maintain them only.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares. We will also replenish our cash reserves to bring them back to 25% of our current net-liq value.

We will report our next week’s results next Saturday. Until then, good luck and good trading!

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