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2021 Week 17 investing and trading report

April is over and it is time to write our weekly investing and trading report. But before we proceed, let’s mention that today is a day when Berkshire Hathaway and Warren Buffett with Charlie Munger have their annual meeting. I plan to visit the next year’s meeting if it will be opened to the public again (this meeting is still online only).

 

 

April 2021 was a weak month. We only made $84 dollars in premiums last week and the entire month ended with $2,336 options income. But, in the stock market, you cannot force it. You force it, you lose it. We were fully invested, we had to roll some trades and that prevented us from reopening new trades to increase our income. But, a few trades expired this week and next week I expect re-opening new trades.

On the other hand, our dividend income started bringing fruits from our aggressive dividend growth stocks accumulation. Our income jumped from $30 – $60 to $200 of income, so that is a bright spot in the entire April’s trading and investing results.

 

Here is our investing and trading report:

 

Account Value: $54,310.18 +$872.80 +1.63%
Options trading results
Options Premiums Received: $84.00    
01 January 2021 Options: $4,209.00 +16.65%  
02 February 2021 Options: $4,884.00 +15.41%  
03 March 2021 Options: $5,258.00 +12.79%  
04 April 2021 Options: $2,336.00 +4.30%  
Options Premiums YTD: $16,687.00 +30.73%  
Dividend income results
Dividends Received: $119.08    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $179.10    
Dividends YTD: $325.45    
Portfolio metrics
Portfolio Yield: 4.37%    
Portfolio Dividend Growth: 7.47%    
Ann. Div Income & YOC in 10 yrs: $8,569.31 15.72%  
Ann. Div Income & YOC in 20 yrs: $58,366.63 107.10%  
Ann. Div Income & YOC in 25 yrs: $221,874.11 407.13%  
Ann. Div Income & YOC in 30 yrs: $1,220,992.87 2,240.49%  
Portfolio Alpha: 21.14%    
Portfolio Weighted Beta: 0.95    
CAGR: 805.01%    
AROC: 25.23%    
TROC: 19.57%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 30.38%  
2021 Portfolio Value Goal: $42,344.06 128.26% Accomplished

 

We continued accumulating dividend growth stocks to achieve our dividend weekly dividend income. We accumulated shares of ABBV, OMF, and AAPL. Our non-adjusted stock holdings market value decreased from $68,258.17 to $59,324.59. This was possibly caused by our broker’s weird Buying power manipulation. We had our BP growing and we parked our available cash and BP into the ICSH fund, but apparently, according to Tasty Works, they provided me with a $13,000 cash allowance to maintain a position (I do not know which) and once I closed the position, this allowance was taken away and my account got into a margin call. So I had to adjust my cash holdings to accommodate the call (glad I was creating cash reserves) to do so. This also prevented us from more trading last week.

 
Stock holdings week 17
 

Last week, we adjusted a few options trades and opened a few new trades against AES, and OMF. We started creating a ladder in these tickers opening strangles against those stocks. We picked these stocks because the capital requirements for these trades are very low (about $300 per strangle) and I want to see how these trades would work in case the position would go completely against me. Will I be able to manage them all? Or will I get busted? If I get busted, it will not be very costly. Once I gain some confidence, I can keep creating ladders against other positions too. For the entire April 2021, we received $2,336.00 premiums only. I hope, May will be a better month.
 

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).

We did open a few new trades last week and some trades expired this week. The BP reduction decreased from $44,388.11 to $43,474.75, a decrease by -$913.36 (-2.06%). This represents 157.80% of margin usage.

 

Investing and trading ROI

 

Our options trading delivered a 4.30% monthly ROI, totaling a 30.73% ROI.

Our account grew by 159.75% this year.
 

Our options trading averaged $4,171.75 per month this year. If this trend continues, we are on track to make $50,061.00 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

 

This week we have not done any adjustments to our old SPX trades. We are still sitting on those trades and waiting for the untouched side to close so we can roll the trades again. The goal will be to roll the trades until we will be able to close them for at least break even and release the buying power. We will keep doing this only if the resulting trade will be a credit trade or a very small debit. If adjusting these trades would require adding more new money, we would rather close these trades and move on.

 

Accumulating Growth Stocks

 

Last week, we added SNOW to our positions. We still want to accumulate 100 shares of this stock and start selling covered calls. As of now, we trade Iron Condors against this stock, but once we accumulate shares, we will switch to a CC.

We also plan on accumulating Tesla (TSLA) and do the same as with SNOW.

 

Accumulating Dividend Growth Stocks

 

Our primary goal, and strategy, is to accumulate high-quality dividend growth stocks. We continued accumulating the following dividend stocks and as of today hold the following shares:
 

AAPL (20), ABBV (40), and OMF (70).
 

Our goal is to not only reach 100 shares of high-quality dividend stocks. We also want to build a weekly dividend income as per this calendar:
 

Weekly dividends income calendar
 

We are reaching our weekly dividend income goal as almost all weeks are filled with dividend income.

 

Market Outlook

 

The market is still in its consolidation pattern. It tried to continue higher but retreated at the end of the last week. It continues in an indecisive pattern and we have to wait for the market to tell us what to do next. If we break up, expect a more bullish run. If we reverse and go down, expect the bearish move to $4,000 level or around it.

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SPX April 31 2021 outlook

 

Trading options

 

We continue trading options around the stocks we own or plan to own in the future. I call it monetizing our positions. If you look at our holdings table below, there are two column sections. The right section is “Options adjusted”. That section applies options premiums to the cost basis of our stocks. And there you can see how beneficial it is. It will make a significant difference when the market is falling yet our stocks will still be in green.

 

Investing and trading in charts

 

TW Account Net-Liq week 17

 
TW Account holdings week 17
 

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 8.86%. With options, our holdings are up 16.11% (from inception on 4/1/2019). The SPX is up 44.54% since inception. Since the inception of our portfolio, our stock holdings underperform the overall market (up only 16.11% on a cumulative basis). This week, our adjusted stock holdings underperformed the market. The market gained 14.70% YTD, our portfolio options-adjusted stock holdings grew by 9.13% YTD. This includes stock holdings adjusted by options trading, not the entire account. If we include the entire portfolio and options trading, we beat the market significantly (up 164.00%).
 

TW Account holdings Growth YTD
 

The stock holdings growth slowed down because we added many new stock positions and these positions didn’t have time to grow yet, so I expect the growth trend to improve over time and beat the market.

 
TW Options Income week 17
 

TW Options Annual Income week 17
 

 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 17
 

Our portfolio still doesn’t represent the true dividend income potential, but this last week we started seeing the results of our accumulation effort kicking in. Our dividend income jumped up by 33%. We are on track to accomplish our dividend income goal, currently, we are at 30% of the goal. The $1,071 of dividend income is our goal based on the expected stock accumulation we set at the beginning of the year. It is our goal we want to achieve.

The chart below, on the other hand, indicates the dividend income of stocks we already accumulated. That means, that if we do nothing and everything stays the same for the rest of the year, we should receive $2,747.27 in dividends.
 

TW Received vs Future Dividends week 17

 

Our account cumulative return

 

This is another metric I started tracking (since March 13, 2021) recently.
 

TW cumulative return wk 17
 

As of today, our account cumulative return is 25.56% (since March 13, 2021).

 

Conclusion of our investing and trading report

 

This week our options trading was great and we created a lot of income making March our best month so far.

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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