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December 2021 $100 Challenge account review

Although the year 2021 is over, our Challenge account program’s fiscal year will end in May 2022. We are in month 7 of the program and as you will see below, we are tracking our goal as projected so far. The start of the options trading in the account was a bit challenging as our only position (AES) got increasingly volatile from day one and that threw a wrench into our trading. Later, the stock finally settled down and now it behaves as expected.

 
AES in Challenge account

 
At first, a sudden selloff in AES forced us to adjust our trade down to keep it safe. Then a huge recovery and rally up shook our trade again as we had to adjust again to the upside to avoid margin calls before the stock finally settled down again and worked in our favor. But these are occurrences that will be happening and every investor and trader must be prepared and have a plan B or a strategy in his/her sleeve to apply. No matter what the stock market throws at you, you must know what to do and accept any outcome.

Why? Because I have seen many impatient investors or traders that wanted results immediately. They are not willing to wait and give the stock or trade position required time to work in your favor. I have seen investors shocked seeing some of my trades with 200 or more days to expiration and saying that they would not block their money for such a long time. But when a situation like this happens and you have to roll your trade, it is then about capital preservation. If you can fix trade and give it more time to work out, I will do it. Mainly in an account where we cannot afford assignments because we are still too small to buy 100 shares of an underlying stock. That is the risk when trading a small account. As I said at the very beginning when trading small accounts, be prepared for everything in the stock market world to be set against you. Everything.

But we are progressing well and within our scheduled goal.

 

Accumulation phase

 
The account is slightly underperforming our goal but it is on the path to success. We are now trading small trades (strangles) and we will continue accumulating shares for our next options trade. The strangle trades are consuming collateral buying power but as they near towards expiration we will see a jump in BP and net-liq.

We are trading strangles because they are easier to manage compared to Iron Condors or spreads. It is why we are not engaged in trading SPX credit put spreads yet because these can be profitable but one trade against us can wipe our account. We are simply too small and undercapitalized for these types of trades. Strangles are also a bit more expensive as far as capital requirements go. That is why choosing good stocks to trade is crucial. Choose safe, stable stocks, providing enough premium and stability. And that is what we are doing.
 

October 2021 Challenge account review

 

MONTH GOAL $$ ACTUAL $$
June 2021: $203.00 $202.67
July 2021: $306.00 $334.75
August 2021: $409.00 $397.71
September 2021: $512.00 $476.91
October 2021: $615.00 $632.37
November 2021: $718.00 $659.00
December 2021: $821.00 $802.08
January 2022: $924.00  
February 2022: $1,027.00  
March 2022: $1,130.00  
April 2022: $1,233.00  
May 2022: $1,336.00  

 

$100 Challenge account review

 
From the chart above, the red dot (line) indicates the current account value, compared to the blue line (plan). Our account is trailing our goal. When trading naked options, expect volatility in your net-liq. That can be seen by some as a disadvantage. When trading spreads, your net-liq will be stabilized by neutralizing delta. With naked options, you would have to choose other instruments to do so, for example owning stocks to neutralize your call side. We do not have this yet as our account is small, but we are building our position.
 

October 2021 Overall Challenge account review

 
The chart below indicates our account value compared to the overall goal and plan to grow $100 investment into a $75,000 portfolio. As of today, we are at the beginning of our journey.

YEAR CONTRIBUTIONS $$ GOAL $$ ACTUAL $$
Year 0: $100.00 $100.00 $100.00
Year 1: $1,300.00 $1,336.00 $802.08
Year 2: $2,500.00 $3,016.96  
Year 3: $3,700.00 $5,303.07  
Year 4: $4,900.00 $8,412.17  
Year 5: $6,100.00 $12,640.55  
Year 6: $7,300.00 $18,391.15  
Year 7: $8,500.00 $26,211.96  
Year 8: $9,700.00 $36,848.27  
Year 9: $10,900.00 $51,313.64  
Year 10: $12,100.00 $70,986.56  

 

$100 Challenge account review goal

 

September 2021 Challenge account Income

 

Total Invested in Stocks $54.60
Total Unrealized Profit -$0.48
Total Realized Profit -$1.17
Strangles Income $259.00
Dividends Income $11.94
Deposits Total $800.00
Cash $1,119.96
Net-Liq $802.08

 

August 2021 Cumulative return Challenge account review

 

As of today, our challenge account provided a -5.97% monthly cumulative return.
 

$100 Challenge account review goal

 
$100 Challenge account review goal

 

If you want to see what investments we take, what trades and strategies we will use to grow this small account join our program today and grow your money too. We engage in safe investments, select strategies to maximize winning trades, and grow our portfolio. And you can do it too, today! We do not provide quick rich promises, gambling, or reckless strategies. We want our portfolio to grow steadily and preserve our capital while maximizing returns.
 

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