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Posted by Martin December 25, 2021
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2021 Week 51 investing and trading report


One more week and the year 2021 will be over. So far, it was a very good year investing and trading in dividend growth stocks and options monetizing my positions. This investing and trading report will show our effort in achieving our goals.

As Santa rally came to the town, our Net-Liq recovered form last week selloff by +3.45%, our options income increased in December by +9.86% and our dividend income is in line with our monthly goal.

December became our best month in options trading income.
 

Here is our investing and trading report:

 

Account Value: $102,249.29 +$3,414.29 +3.45%
Options trading results
Options Premiums Received: $3,909.00    
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%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,133.00 +7.40%  
09 September 2021 Options: $2,353.00 +2.97%  
10 October 2021 Options: $8,721.00 +9.27%  
11 November 2021 Options: $4,577.00 +5.24%  
12 December 2021 Options: $10,078.00 +9.86%  
Options Premiums YTD: $63,437.00 +62.04%  
Dividend income results
Dividends Received: $54.51    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $780.09    
09 September 2021 Dividends: $176.60    
10 October 2021 Dividends: $256.73    
11 November 2021 Dividends: $463.90    
12 December 2021 Dividends: $190.74    
Dividends YTD: $2,776.07    
Portfolio metrics
Portfolio Yield: 4.49%    
Portfolio Dividend Growth: 8.80%    
Ann. Div Income & YOC in 10 yrs: $23,510.42 19.13%  
Ann. Div Income & YOC in 20 yrs: $231,237.94 190.49%  
Ann. Div Income & YOC in 25 yrs: $1,254,627.39 1033.53%  
Ann. Div Income & YOC in 30 yrs: $11,860,339.38 9,770.24%  
Portfolio Alpha: 55.76%    
Portfolio Weighted Beta: 0.58    
CAGR: 574.14%    
AROC: 49.32%    
TROC: 9.88%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 259.10% Accomplished
2021 Portfolio Value Goal: $42,344.06 241.47% Accomplished
6-year Portfolio Value Goal: $175,000.00 58.43%  
10-year Portfolio Value Goal: $1,000,000.00 10.22%  

 

Dividend Investing and Trading Report

 
Last week we have received $54.51 in dividends bringing December’s dividend income to $190.74. We didn’t buy any shares of dividend growth stocks last week, but as we completed our HFEA accumulation goal, we will now focus on accumulating dividend growth and high-yield dividend stocks.

Our goal is to accumulate enough shares of RYLD this year and next year so the dividends will cover our mortgage monthly payments. At first, we will reinvest all dividends and premiums until we reach a $300 monthly payment (HELOC loan). Once we reach this goal, we will use the dividends to pay off our HELOC. At the current RYLD price and yield, we need to accumulate $36,000 and buy 1470 shares.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 51

 

Growth stocks Investing and Trading Report

 

Last week we didn’t buy any new positions of growth stocks.

 

Options Investing and Trading Report

 
Last week we rolled some of the trades that got their call sides breached as the market rallied.

These adjustments delivered $3,909.00 of additional options income bringing December at $6,169.00.
 

We were actively trading our SPX strategy that delivered $715.00 weekly income.

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
We have received $54.51 in dividends last week. Our portfolio currently yields 4.49% at $102,249.29 market value.

 
Our projected annual dividend income in 10 years is $23,510.42 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,836.21 annual dividend income. We are 20.57% of our 10 year goal of $23,510.42 dividend income.

 
Future Divi on YOC week 51
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $129,178.85 to $132,669.29 last week.

 
Stock holdings week 51
 

Our goal is to accumulate 100 shares of dividend growth stocks we like and then start selling covered calls or strangles around those positions. We also plan on reinvesting all dividends back to those holdings. I plan on doing this until the portfolio can deliver enough income to cover all living expenses and then start trading full-time.
 

Investing and trading ROI

 

Our options trading delivered a 9.86% monthly ROI in December 2021, totaling a 62.04% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 397.02% beating our projections and the market.
 

Our options trading averaged $5,286.42 per month this year. If this trend continues, we are on track to make $63,437.00 trading options in 2021. As of today, we have made $63,437.00 trading options.
 

Old SPX trades repair

 

This week, we didn’t adjust our old SPX trades. Our goal is to reach a level where we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

We however traded our SPX put credit spread strategy which you can overview in this report.

 

Market Outlook

 

Santa Claus finally arrived in the town and delivered its rally. Stocks recovered losses from previous weeks and with it, our net-liq recovered too. It was obvious that the selloff had no legs as the fear indicators showed that the market didn’t really care about Omicron or any other BS out there. I will write about this in my newsletter. So, if you want to know why I knew that the market will not repeat December 2018 selloff, subscribe to the newsletter.

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 51

 

Account Stocks holding

 
TW Account holdings week 51
 

Last week, S&P 500 grew 63.37% since we opened our portfolio while our portfolio grew 29.00%. On YTD basis, the S&P 500 grew 33.52% and our portfolio 22.01%.

The numbers above apply to our stock holdings only. Our overall account net-liq grew by 397.02% this year! This is thanks to options trading that generates income. It can be also seen how the options help lower our cost basis. Just compare the P&L in the regular (left) column with the P&L in the “Options adjusted” column. For example, our AES holding would be a loser as of today (down -10.17%), but we generated enough income (we can call it also a return of our invested capital) and that position is 126.09% up.
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market hopefully soon. The entire portfolio beats the market by far thanks to monetizing those positions.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 10.22% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 58.43% of that goal.

Our 2021 year goal is to grow this account to a $42,344.00. We already accomplished this goal.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 51
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 51
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 51
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,776.07. However, we accumulated enough shares to start making $4,836.21 a year.

Also, it is amazing to see, that on monthly basis, we received $53 in dividends and grew our account and now we are receiving $400 in dividends.
 

TW Received vs Future Dividends week 51

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 51
 

TW win ratio wk 51
 

As of today, our account cumulative return is 52.89% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

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




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Posted by Martin December 24, 2021
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2021 SPX put credit spreads trading review – week 51


After a week of increased volatility, the stock market picked up the end of the year steam and rallied. I am pleased to see that my strategy of tactical trading the SPX spreads worked well and during the volatile downtrend the strategy kept me out of the trades and when the market finally turned around, I could enter the trades and profit well from those trades.

Last week, the account increased 20% while SPX increased a little over 2%.

 

Initial trade set ups

 

For my SPX strategy, I dedicated a $3,600 initial amount that will be used to trade SPX PCS strategy per week. If this amount is depleted, I will evaluate the strategy if to continue or change it. If I grow this amount, I will scale up the trading.
 

WHAT WILL WE TRADE?    
DAY DTE TYPE
MONDAY 7 DTE Put Credit Spread
TUESDAY 30 DTE Put Credit Spread
WEDNESDAY 7 DTE Put Credit Spread
FRIDAY 60 DTE Put Credit Spread
EVERY MONTH 120 DTE Put Debit Spread – HEDGE

 

Last week trading

 

DAY SIGNAL TYPE TRADE STATUS
MONDAY Negative No trade opened
TUESDAY Positive New 30 DTE trade opened
credit: $310
Exp: Jan21
WEDNESDAY Positive New 7 DTE trade opened
credit: $320
Exp: Dec29
FRIDAY Positive New 60 DTE trade opened
credit: $85
Exp: Feb28
EVERY MONTH No new trade

 

On Monday, our entry signal was still negative so we didn’t open a new trade.

On Tuesday, the market reversed and rallied in a very strong manner. At first, it looked like the signal would still be negative as the rally didn’t seem to be strong enough to turn the signal positive. But before the end of the day, the signal turned positive and we opened a new 30 DTE trade.

On Wednesday, the market was positive and we opened a new 7 DTE trade.

On Friday, the signal for the 60 DTE trade was positive, so we opened a new 60 DTE credit spread. We didn’t open a new 120 DTE debit hedging trade this week as we will be opening the hedge monthly only.
 

Overall, the strategy resulted in a $715.00 gain last week. Note that the gain might be unrealized as some or all trades may be still open.
 

Initial account value: $3,600.00 (Account inception: 12/07/2021)
Last week beginning value: $3,455.00
Last week ending value: $4,170.00

 

SPX PCS account value
SPX PCS account value
 

SPX PCS account vs SPX
SPX PCS account vs SPX index
 

If you want to receive trade alerts whenever we open a new SPX put credit spread or a hedge trade, you can subscribe to our service:

 

 




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Posted by Martin December 18, 2021
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2021 SPX put credit spreads trading review – week 50


After a year or two of testing and studying how to trade SPX efficiently and without losing money. I tested several strategies and although there were some losing trades, overall, the strategy I decided to trade with live money worked well.

The strategy is to sell put credit spreads (PCS) to generate income in lieu of Iron Condors. The reason was that it was usually the call spreads that got me busted. Many times, the index rallied relentlessly up, and to roll the spread higher I had to use put spreads to offset the cost. Thus I got closer to the money on the put side, the market sharply reversed, and the losses wiped out my account.

I also added indicators to help me to stay out of the market when there is a significant weakness and increased danger of the market going down. When the signal says to stay away, I do not open a trade. The test showed that by doing so I would avoid most selloffs in the market and be on the sidelines. And lastly, I added an SPX hedge trade that should protect my trades and my account against black swan events when the market crashes hard as it did in 2008 or 2020.

 

Initial trade set ups

 

For this strategy, I dedicated a $3,600 initial amount that will be used to trade SPX PCS strategy per week. If this amount is depleted, I will evaluate the strategy if to continue or change it. If I grow this amount, I will scale up the trading.
 

WHAT WILL WE TRADE?    
DAY DTE TYPE
MONDAY 7 DTE Put Credit Spread
TUESDAY 30 DTE Put Credit Spread
WEDNESDAY 7 DTE Put Credit Spread
FRIDAY 60 DTE Put Credit Spread
EVERY MONTH 120 DTE Put Debit Spread – HEDGE

 

Last week trading

 

DAY SIGNAL TRADE STATUS
MONDAY Signal positive Trade closed – LOSS
TUESDAY Signal negative No trade opened
WEDNESDAY Signal positive Trade closed – LOSS
FRIDAY Signal positive Trade OPEN
EVERY MONTH Signal positive December 21 trade OPEN

 

On Monday, our entry signal turned positive and we opened a new trade as per the rules. But on Tuesday, the market turned negative. In order to protect our investments, we closed Monday’s trade for a small loss.

On Tuesday, the signal was still negative so we skipped Tuesday’s trade.

On Wednesday, the market turned positive again which allowed us to open a new trade again. Unfortunately, on Thursday, the market sold off again so we got out for a small loss.

On Friday, the signal for 120 DTE trade was positive (it was negative for 7 DTE trades if we would take any on Fridays), so we opened our 120 DTE trade.
 

Overall, the strategy resulted in a $145 loss last week.
 

Initial account value: $3,600.00 (Account inception: 12/07/2021)
Last week beginning value: $3,600.00
Last week ending value: $3,455.00

 

SPX PCS account value
SPX PCS account value
 

SPX PCS account vs SPX
SPX PCS account vs SPX index
 

If you want to receive trade alerts whenever we open a new SPX put credit spread or a hedge trade, you can subscribe to our service:

 

 




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Posted by Martin December 18, 2021
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2021 Week 50 investing and trading report


December is almost over. The entire year 2021 is almost over. Despite extreme volatility, FED, inflation, fear, I must say, 2021 was an exceptional year for me. This is almost the last investing and trading report this year. I was reporting my progress diligently every week to show how I was doing. And the results exceeded expectations.

Our Net-Liq decreased form last week jump because of the market selloff up by +13.24%), our options income increased in December by +6.24% and our dividend income is in line with our monthly goal.

What are my expectations for the rest of the year? I still think this market will reach $4,800 by the end of the year although my conviction is lesser than before. FED announcing tapering and possible interest rates hike next year can spark a repetition of Christmas 2018 selling. Although, if that was the case, we would be already down significantly and not a measly 2%.
 

Here is our investing and trading report:

 

Account Value: $98,835.00 -$3,685.41 -3.59%
Options trading results
Options Premiums Received: $2,265.00    
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%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,133.00 +7.40%  
09 September 2021 Options: $2,353.00 +2.97%  
10 October 2021 Options: $8,721.00 +9.27%  
11 November 2021 Options: $4,577.00 +5.24%  
12 December 2021 Options: $6,169.00 +6.24%  
Options Premiums YTD: $59,528.00 +60.23%  
Dividend income results
Dividends Received: $40.50    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $780.09    
09 September 2021 Dividends: $176.60    
10 October 2021 Dividends: $256.73    
11 November 2021 Dividends: $463.90    
12 December 2021 Dividends: $136.23    
Dividends YTD: $2,721.56    
Portfolio metrics
Portfolio Yield: 4.42%    
Portfolio Dividend Growth: 8.80%    
Ann. Div Income & YOC in 10 yrs: $22,577.31 18.65%  
Ann. Div Income & YOC in 20 yrs: $219,926.28 181.64%  
Ann. Div Income & YOC in 25 yrs: $1,171,829.90 967.84%  
Ann. Div Income & YOC in 30 yrs: $10,807,199.34 8,925.95%  
Portfolio Alpha: 53.92%    
Portfolio Weighted Beta: 0.59    
CAGR: 574.80%    
AROC: 62.16%    
TROC: 13.13%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 254.01% Accomplished
2021 Portfolio Value Goal: $42,344.06 233.41% Accomplished
6-year Portfolio Value Goal: $175,000.00 56.48%  
10-year Portfolio Value Goal: $1,000,000.00 9.88%  

 

Dividend Investing and Trading Report

 
Last week we have received $40.50 in dividends bringing December’s dividend income to $136.23. We bought 10 shares of RYLD ETF for dividend income. I will be accumulating this ETF more often now as I wish to create a dividend income from this fund to cover my mortgage payments. So, I will be accumulating and reinvesting dividends. Once my dividend income exceeds the mortgage payments, I plan on withdrawing the dividend. Then I shift back to accumulating other stocks.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 50

 

Growth stocks Investing and Trading Report

 

Last week we continued accumulating our position in the HFEA strategy. We kept buying SPXL and TMF shares to reach our target allocation. We are only a few shares short of the target and I think we will finish accumulating the shares next week. Other than that, we didn’t buy any other growth stocks positions.

 

Options Investing and Trading Report

 
The stock market recovered the previous selloff after FED announced its tapering and interest rates hike. The announcement was taken as a relief and the market rallied. Nasdaq went up almost 3% that day. We had to adjust a few strangle positions to the upside.

Then, the market turned lower as investors (possibly the same investors who pushed Nasdaq to 3% gain) started selling the same stocks, and the rest of the week we had a significant selloff. We had to adjust those same strangles back down.

These adjustments delivered $2,265.00 of additional options income bringing December at $6,169.00.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
We have received $13.21 in dividends last week. Our portfolio currently yields 4.41% at $98,835.00 market value.

 
Our projected annual dividend income in 10 years is $22,577.31 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,432.93 annual dividend income. We are 19.63% of our 10 year goal of $22,577.31 dividend income.

 
Future Divi on YOC week 50
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value decreased from $129,791.56 to $129,178.85 last week. On month to month our stock holding value increased from $121,107.63 to $129,178.85 value.

 
Stock holdings week 50
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 6.24% monthly ROI in November 2021, totaling a 60.23% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 380.43% beating our projections and the market.
 

Our options trading averaged $4,960.67 per month this year. If this trend continues, we are on track to make $59,528.00 trading options in 2021. As of today, we have made $59,528.00 trading options.
 

Old SPX trades repair

 

This week, we didn’t adjust our old SPX trades. Our goal is to reach a level where we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Market Outlook

 

We are still bullish and we think that this market will rally and reaches $4,800 by the year-end. Although, this may be derailed by Wall Street still panicking over the FED’s tapering and interest hike. We have to wait to see and trade cautiously.

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 50

 

Account Stocks holding

 
TW Account holdings week 50
 

Last week, S&P 500 grew 59.73% since we opened our portfolio while our portfolio grew 25.97%. On YTD basis, the S&P 500 grew 29.89% and our portfolio 18.99%.

The numbers above apply to our stock holdings only. Our overall account net-liq grew by 380.43% this year! This is thanks to options trading that generates income. It can be also seen how the options help lower our cost basis. Just compare the P&L in the regular (left) column with the P&L in the “Options adjusted” column. For example, our AES holding would be a loser as of today (down -8.11%), but we generated enough income (we can call it also a return of our invested capital) and that position is 131.27% up.
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market hopefully soon. The entire portfolio beats the market by far thanks to monetizing those positions.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 9.88% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 56.48% of that goal.

Our 2021 year goal is to grow this account to a $42,344.00. We already accomplished this goal.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 50
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 50
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 50
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,721.56. However, we accumulated enough shares to start making $4,432.93 a year.

Also, it is amazing to see, that on monthly basis, we received $53 in dividends and grew our account and now we are receiving $400 in dividends.
 

TW Received vs Future Dividends week 50

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 50
 

TW win ratio wk 50
 

As of today, our account cumulative return is 47.78% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

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




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Posted by Martin December 15, 2021
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Few Tasks for 2022


As the year-end of 2021 approaches, I started a few new tasks or goals that I want to work on and develop during the year of 2022:

 

Fully fund and run HFEA strategy

 

HFEA strategy is accumulating 3x leveraged ETF (SPXL) but with downside protection (TMF). My initial goal was to use $15,000 of my available cash to build this strategy and then run it for the entire year with quarterly rebalancing. I am still accumulating to reach the $15,000 goal in this strategy. I will be posting strategy results every month.

 

Restart SPX credit spreads

 

After a few years of not trading this strategy, I did a lot of reading on how to trade SPX successfully but mainly how to protect my trades against market crashes, downturns, and black swans. These events can wipe out not just your trade profits, but your entire account. It happened to me a few times in the past.

After a lot of reading and studying, I adjusted the strategy to trade a put side only (it was mostly the call side that got me in trouble in the relentless bull market). So I eliminated this threat. But I also added a few indicators that help me to stay out of the market if it is too bearish. Even a slight negative market means that now, I am out and waiting for a bullish run. And in case the market turns down on a dime, I added SPX hedges that should protect my trades and the entire portfolio.

I will be posting PCS strategy results every week along with my Weekly investing and trading report. If you are interested in trade alerts, you can subscribe to my SPX trade alerts.

 

VIX hedging

 

I also decided to trade VIX LEAPS when certain criteria are met. I will be buying calls or puts based on the VIX position. The goal is to take advantage of the major market volatility issues.

 

Monetizing dividend stock positions

 

And finally, my most profitable strategy so far is trading strangles against my dividend stock holdings (plus stocks I want to own in the future). So partially, some strangles is fully covered, some partially covered, and a few are fully naked. This strategy helped me to recover my account and literally grow it from a little less than $2,000 to $100,000 net liq as of today. I even started a Challenge program to grow $100 into $75,000 and hope to duplicate my success that you can follow my alerts for these trades here.

 
I hope our 2022 year will be better than 2021. It will be a difficult task because 2021 was an extremely good year for us. I hope, it will be good to you too.




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Posted by Martin December 11, 2021
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2021 Week 49 investing and trading report


As expected, the December market recovered once the panicking investors realized that the Omicron fear was not justified. Fear of the increased inflation didn’t materialize as inflation, though high, was within expectations. The market rallied last week and in this investing and trading report, we can announce another great achievement: our account reached the $100,000 mark for the first time in the history of our trading.

Our Net-Liq jumped up by +17.46%), our options income increased in December by 3.81% and our dividend income also exceeded our monthly goal.

Overall, this market is bullish and I expect it to continue for the rest of the year. The only thing that can derail it is the FED but it is unlikely that they would do anything before the end of the year.
 

Here is our investing and trading report:

 

Account Value: $102,520.41 +$15,242.08 +17.46%
Options trading results
Options Premiums Received: $1,609.00    
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%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,133.00 +7.40%  
09 September 2021 Options: $2,353.00 +2.97%  
10 October 2021 Options: $8,721.00 +9.27%  
11 November 2021 Options: $4,577.00 +5.24%  
12 December 2021 Options: $3,904.00 +3.81%  
Options Premiums YTD: $57,263.00 +55.86%  
Dividend income results
Dividends Received: $13.21    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $780.09    
09 September 2021 Dividends: $176.60    
10 October 2021 Dividends: $256.73    
11 November 2021 Dividends: $463.90    
12 December 2021 Dividends: $95.73    
Dividends YTD: $2,681.06    
Portfolio metrics
Portfolio Yield: 4.52%    
Portfolio Dividend Growth: 8.80%    
Ann. Div Income & YOC in 10 yrs: $22,999.73 19.29%  
Ann. Div Income & YOC in 20 yrs: $230,565.27 193.36%  
Ann. Div Income & YOC in 25 yrs: $1,258,148.17 1055.13%  
Ann. Div Income & YOC in 30 yrs: $11,986,639.10 10,052.44%  
Portfolio Alpha: 49.53%    
Portfolio Weighted Beta: 0.59    
CAGR: 593.42%    
AROC: 45.95%    
TROC: 13.10%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 250.23% Accomplished
2021 Portfolio Value Goal: $42,344.06 242.11% Accomplished
6-year Portfolio Value Goal: $175,000.00 58.58%  
10-year Portfolio Value Goal: $1,000,000.00 10.25%  

 

Dividend Investing and Trading Report

 
Last week we have received $13.21 in dividends bringing December’s dividend income to $95.73.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 49
 

Options Investing and Trading Report

 
The market recovered strongly last week and we only rolled a few trades last week, such as TSLA put spreads, ABBV strangles, WBA strangles, AAPL, AXP, SNOW, and BA. We rolled these trades to release buying power and center the trades. A week ago we had to roll the trades lower, last week we rolled these trades back up as our calls got in danger. Sometimes, it is a cat-mouse chase. But once the market calms down again with no wild swings these trades will work well again.

These adjustments delivered $1,609.00 of additional options income bringing December at $3,904.00.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
We have received $13.21 in dividends last week. Our portfolio currently yields 4.52% at $102,520.41 market value.

 
Our projected annual dividend income in 10 years is $22,999.73 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,439.42 annual dividend income. We are 19.30% of our 10 year goal of $22,999.73 dividend income.

 
Future Divi on YOC week 49
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value increased from $122,486.39 to $129,791.56 last week. On month to month our stock holding value increased from $121,107.63 to $129,791.56 value.

 
Stock holdings week 49
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 3.81% monthly ROI in November 2021, totaling a 55.86% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 398.34% beating our projections and the market.
 

Our options trading averaged $4,771.92 per month this year. If this trend continues, we are on track to make $57,263.00 trading options in 2021. As of today, we have made $57,263.00 trading options.
 

Old SPX trades repair

 

This week, we didn’t adjust our old SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.
 ‘

Weekly SPX Put Credit Spreads

 
I traded Iron Condors in the past and it was a great money-making strategy. Until it was not. One bad trade and all your profits are gone. And sometimes more than just the profits.

I stopped trading SPX spreads as I didn’t know how to protect them. But I still liked the strategy so when I stopped, I started learnings and researching how to hedge those strategies so I am out of the market when there is trouble and everyone panics. The question was: how to hedge my trades (and the entire portfolio) to protect it from the black swans and how to protect my SPX spreads from selling and getting wiped out.

After a year of testing, paper trading, backtesting, reading books, and studying other successful traders and how they trade SPX spreads, I developed a strategy that is working. Of course, it is not a 100% sure bet. There will be trades that will not work, and that is normal, but overall, the strategy will deliver more winners than losers.
 

Now, I am making my strategy available to everyone to subscribe to SPX weekly PCS alerts.
 

Last week, we opened a few trades and added hedges to our portfolio:

 
SPX PCS week 49

 

Accumulating Growth Stocks

 

Last week we continued to accumulate our HFEA holdings (purchasing SPXL and TMF).

Here is a quick review of our HFEA strategy.

We also added a few shares of SNOW to our holdings.

 

Accumulating Dividend Growth Stocks

 

Last week, we also added FLMN shares to our portfolio and finished accumulating 100 shares of this stock. We will be accumulating RYLD to accumulate $5,000 value in this ETF.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

Last week in our newsletter, I wrote that if the market holds the previous resistance level, now support, at $4,550, the market will resume the uptrend. As soon as the market participants realized that all the Omicron fear was not justified and FED tapering, inflation, and other fears are in fact within expectations, the markets rallied.

This is what I published last week:
 

SPX 2021 1211

 
The support was held so no further selling happened. In fact, we experienced a FOMO when investors rushed to the market (buying higher from where they were selling before) and the market created new all-time highs.

On Friday, the CPI numbers were released before the bell and reported the highest inflation since 1982. Many people on social media were predicting crash and doom. When the market went up 0.92%, all in unison claimed that the market is rigged. But they forget that the market doesn’t react on numbers but on expectations. It is the same with earnings. It doesn’t matter what the company reports. What matters is whether the reported numbers met or missed the expectations. And the CPI numbers met the expectations. It was expected that the CPI will be at 6.7%, and 6.8% was reported. The market rallied.
 

SPX 2021 1211
 

So what’s next for the market?

Expect more rallying next week. The earnings expectations are not changed – still higher than this year. Holidays are coming and Americans are still spending. In fact, the demand is at the highest levels, higher than pre-pandemic levels. People are afraid of inflation and predict doom but the inflation is caused by supply chain issues. But prices are rising due to the lack of goods on the shelves and high demand. Once the companies catch up with the demand, the inflation will drop.

A great example is the latest Nintendo Switch. It is completely and helplessly sold out. No retailer is able to deliver the gaming console. The only place, you can buy the unit today is on eBay. Although the retail price is at $399, eBay sellers sell the system for $499 – $599 apiece. A 25% to 50% markup. Here is your inflation, folks. Once the Nintendo manufacturer catches up and delivers enough consoles to the stores, the price will drop back to the retail price.
 

What is my expectation for the next week? I expect the market to reach $4,800 next week and possibly $5,000 by year-end. Then, we enter another earnings season and companies will report 4Q earnings. If reports meet expectations, expect more uptrend. If not, a correction will happen.
 

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 49

 

Account Stocks holding

 
TW Account holdings week 49
 

Last week, S&P 500 grew 62.89% since we opened our portfolio while our portfolio grew 28.43%. On YTD basis, the S&P 500 grew 33.05% and our portfolio 21.45%.

The numbers above apply to our stock holdings only. Our overall account net-liq grew by 398.34% this year! This is thanks to options trading that generates income. It can be also seen how the options help lower our cost basis. Just compare the P&L in the regular (left) column with the P&L in the “Options adjusted” column. For example, our AES holding would be a loser as of today (down -6.85%), but we generated enough income (we can call it also a return of our invested capital) and that position is 134.44% up.
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market hopefully soon. The entire portfolio beats the market by far thanks to monetizing those positions.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 10.25% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 58.58% of that goal.

Our 2021 year goal is to grow this account to a $42,344.00. We already accomplished this goal.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 49
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 49
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 49
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,681.06. However, we accumulated enough shares to start making $4,439.42 a year.
 

TW Received vs Future Dividends week 49

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 49
 

TW win ratio wk 49
 

As of today, our account cumulative return is 53.29% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

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




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Posted by Martin December 07, 2021
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FOMO


What was obvious a week ago that Omicron probably is not as bad as investors perceived (definitely not worse than the Delta variant), and FED tapering no longer matters, everybody started chasing the markets again.

Last two weeks investors were selling everything. Today, they are buying it back at higher prices. Many are screaming “buy! buy!… turn those machines back on!” as they feel the fear of missing out on this rapid recovery.

As I said before, if the support at $4550 holds the trend will resume:
 

SPX support

 
The support held and investors started panic buying:
 

SPX panic FOMO

 
Just Nasdaq jumped up over 3% today! And more investors who were in disbelief today will be rushing in tomorrow.




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Posted by Martin December 05, 2021
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November 2021 $100 Challenge account review


Trading a small account requires a lot of patience and diligence. It is not get-rich-quick trading. When trading a small account, all odds will be against you – the fees, restrictions, regulations, everything will be set to make your journey hard and difficult. But the payoff will be sweet.

When I started trading options I wanted to be rich fast. I saw options as a route for riches bypassing slow stocks. At first, it worked and I believed I found the holy grail. But I only fooled myself when I was actually losing money. In 2019 I finally put a stop to my madness. I learned how to trade options the correct way, but never did it that way. In 2019, it was time to go back to the roots of proper options trading.

I restarted my account with nothing in it and slowly built it up again. The entire year 2019 was still going down. In 2020 my net liq dropped even more as many bad trades were going away. But I was not going astray and traded the way I knew would work no matter what.

This program is to show you the progress step by step from a small account to a large one:

 

Accumulation phase

 
The account is still 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, but they 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  
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 $659.00
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 -$1.56
Total Realized Profit -$1.17
Strangles Income $224.00
Dividends Income $11.94
Deposits Total $700.00
Cash $1,011.96
Net-Liq $659.00

 

August 2021 Cumulative return Challenge account review

 

As of today, our challenge account provided a -11.02% 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.
 

As a member, you will have access to the following features:
 

 

 




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Posted by Martin December 05, 2021
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2021 Week 48 investing and trading report


November 2021 and the beginning of December 2021 ended up as my worst performance so far. Of course, I can’t expect that our account will go always up only, there will be drawdowns, but as you will see in this investing and trading report, our net-liq lost $8,562 which represents a loss of 8.93% since the account peak. But from then the account balance started losing ground. The net-liq was losing value despite our stock holdings increasing in value (+1.14%), our cash holdings increased in value (+59.24%), our options income increased in November by 5.24% and our dividend income also exceeded our monthly goal.

I tried to find what was causing this slump while all other metrics were actually better than the previous ones and all I could find was volatility and tech stocks selloff. What does it indicate? If the market improves, this drawdown is just a temporary decline that will improve again.
 

Here is our investing and trading report:

 

Account Value: $87,278.33 -$3,870.87 -4.25%
Options trading results
Options Premiums Received: $1,054.00    
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%  
05 May 2021 Options: $6,346.00 +9.22%  
06 June 2021 Options: $4,677.00 +6.37%  
07 July 2021 Options: $3,865.00 +5.14%  
08 August 2021 Options: $6,133.00 +7.40%  
09 September 2021 Options: $2,353.00 +2.97%  
10 October 2021 Options: $8,721.00 +9.27%  
11 November 2021 Options: $4,577.00 5.24%  
Options Premiums YTD: $55,654.00 +63.77%  
Dividend income results
Dividends Received: $114.08    
01 January 2021 Dividends: $53.04    
02 February 2021 Dividends: $63.00    
03 March 2021 Dividends: $30.31    
04 April 2021 Dividends: $139.70    
05 May 2021 Dividends: $167.45    
06 June 2021 Dividends: $168.56    
07 July 2021 Dividends: $228.62    
08 August 2021 Dividends: $780.09    
09 September 2021 Dividends: $176.60    
10 October 2021 Dividends: $256.73    
11 November 2021 Dividends: $463.90    
Dividends YTD: $2,667.85    
Portfolio metrics
Portfolio Yield: 4.46%    
Portfolio Dividend Growth: 8.80%    
Ann. Div Income & YOC in 10 yrs: $21,999.61 18.90%  
Ann. Div Income & YOC in 20 yrs: $216,801.56 186.30%  
Ann. Div Income & YOC in 25 yrs: $1,166,376.41 1002.30%  
Ann. Div Income & YOC in 30 yrs: $10,899,423.40 9,366.14%  
Portfolio Alpha: 57.38%    
Portfolio Weighted Beta: 0.59    
CAGR: 562.01%    
AROC: 48.75%    
TROC: 18.15%    
Our 2021 Goal
2021 Dividend Goal: $1,071.42 249.00% Accomplished
2021 Portfolio Value Goal: $42,344.06 206.12% Accomplished
6-year Portfolio Value Goal: $175,000.00 49.87%  
10-year Portfolio Value Goal: $1,000,000.00 8.73%  

 

Dividend Investing and Trading Report

 
Last week we have received no dividends. Our dividend income is still well in line with our goals and plans. We planned on receiving $472.82 in dividends in November and so far we have received $463.90 income.

Here you can see our dividend income per stock holding:

 
Annual Dividend Payout week 48
 

Options Investing and Trading Report

 
Selloffs in the markets are great for me. I keep saying, when the investors out there panic, I make the most of my income. Last week, we rolled most of our trades to keep them safe and generated income.

We rolled these trades:
 
BAC 42/50 strangle to 41.5/47.5 strangle for 0.05 credit
AES 23/27 strangle to 21/165 strangle for 0.40 credit
multiple adjustments of SNOW spreads
DKNG 30/50 strangle to 25/35 strangle for 0.05 credit
TSN 72.5/85 strangle to 80/90 strangle for 0.40 credit
TSLA 1035/1040 put spread to 1025/1030 put spread for 0.05 credit
SPCE 2x 18p/ 3x 25c uneven strangle to 3x 13p/ 3x 18c strangle for 1.09 credit
OXY 30/40 strangle to 27/32 strangle for 0.04 debit
CROX 145/200 strangle to 140/185 strangle for 1.82 credit
BABA 105/145 strangle to 100/135 strangle for 0.35 credit
PMT 20 put to 20 put for 0.35 credit
KBE 54/60 strangle to 52/58 strangle for 5.14 credit
BA 170/200 strangle to 180/220 strangle for 3.00 credit
WEN 20/24 strangle to 19/23 strangle for 0.20 credit
MU 77.8/95 strangle to 72.5/95 strangle for 0.80 credit
BA 170/200 strangle to 170/225 strangle for 1.47 credit
AAPL 155/185 strangle to 140/175 strangle for 0.90 credit
BA 175/207.5 strangle to 170/200 strangle for 2.13 credit
BA 180/215 strangle to 170/200 strangle for 2.99 credit
TSN 75/90 strangle to 72.5/85 strangle for 0.63 credit
WBA 43/51 strangle to 42.5/47.5 strangle for 0.05 credit
DKNG 30/45 strangle to 25/45 strangle for 0.30 credit
and many other trades.
 

We closed a PPL strangle for 0.50 debit, the entire trade closed for 0.45 credit.
We also closed a CSCO strangle for 0.15 debit, the entire trade closed for 1.69 credit.
We closed BEPC strangle for 2.77 debit. The entire trade closed for 0.47 debit (a losing trade).
 

These adjustments delivered $1,054.00 of additional options income topping November at $4,577.00. Not the best month but not the worst one either. I expected November to be choppy but unfortunately, I was not very well prepared for it.
 

You can watch all our trades in this spreadsheet. You can watch the spreadsheet and look for a “NEW” indication next to the trading date. When the indicator shows up, it is typically good for up to 3 days to follow that trade.
 

Expected Future Dividend Income

 
We have received $114.08 in dividends last week. Our portfolio currently yields 4.46% at $87,278.33 market value.

 
Our projected annual dividend income in 10 years is $21,999.61 but that projection is if we do absolutely nothing and let our positions grow on their own without adding new positions or reinvesting the dividends.

We are also set to receive a $4,320.18 annual dividend income. We are 19.64% of our 10 year goal of $21,999.61 dividend income.

 
Future Divi on YOC week 48
 

The chart above shows how our future dividend income is based on the future yield on cost and what dividend income we may expect in the future. The expected dividend growth depends on what stocks we are adding to our portfolio and the stocks’ 3 years average dividend growth rate. It is interesting to see what passive income we may enjoy 10, 20, 25, or 30 years from now.

 

Market value of our holdings

 
Our non-adjusted stock holdings market value decreased from $126,058.32 to $122,486.39 last week. But on month to month our stock holding value increased from $121,107.63 to $122,486.39 value.

 
Stock holdings week 48
 

Our goal is to accumulate 100 shares of each stock of our interest and we are getting to that goal.
 

Investing and trading ROI

 

Our options trading delivered a 5.24% monthly ROI in November 2021, totaling a 63.77% ROI YTD. We again exceeded our 45% annual revenue selling options against dividend stocks target!

Our account grew by 324.25% beating our projections and the market.
 

Our options trading averaged $4,637.83 per month this year. If this trend continues, we are on track to make $55,654.00 trading options in 2021. As of today, we have made $55,654.00 trading options.
 

Old SPX trades repair

 

This week, we didn’t adjust any SPX trades. Our goal is to reach a level that we will be eligible for portfolio margin (PM). Once that happens, we plan on converting the existing SPX Iron Condors to strangles and trade these positions as strangles.

With RegT margin, the capital requirements would be approx. $66,586.06 and that is beyond our means. With PM the requirement for margin would drop to around $10k. That is doable in our account. Once we reach this level, we will start adjusting our SPX trades accordingly. Until then, we will just roll these trades around.

 

Accumulating Growth Stocks

 

Last week we liquidated our RIFN position (for a loss) and used cash to accumulate our HFEA holdings (purchasing SPXL and TMF).

Here is a quick review of our HFEA strategy.

 

Accumulating Rules

 

Despite the rule below, I was still running low on buying power and I was wondering why. Then I saw it. Although I am limiting my options trading, I go on a shopping spree and use a lot of free BP buying stocks. That is not necessarily bad, but these purchases reduce my BP and when the market drops, my BP is depressed even more. I am buying more shares than what my options are generating. When I sell options and generate for example $100 dollars, I go and buy shares worth $200 (thank you margin!). That depletes my reserves. And this also was not my plan at the beginning!

Originally, my goal was to use options income only, so it is time to return to the roots.

Our rule is to buy shares of growth stocks using options income only and only when the BP is above the $4,000 November limit. In December 2021, we plan on increasing the limit to the $5,000 level.

Why such a rule? Up to today, I was scaling up my trades and portfolio. That resulted in rapid growth but also all our proceeds were constantly locked in the trades. If we want to live off of our dividends and options income, we cannot have them locked by new trades. We need to start accumulating “cash available to withdraw”. Therefore, I am shifting my trading to trade the same amount of contracts and invest only a certain excess of the accumulated cash.

Another reason, of course, is to have enough cash to buy opportunities when the market crashes or corrects. As is typical, Wall Street usually overreacts (stupidly) and I want to buy shares when the market is in panic. Like last week. the almost 3% sell-off provided a good opportunity but I have no available buying power!

 

Accumulating Dividend Growth Stocks

 

Last week, we also added FLMN shares to our portfolio.

Our goal is to reach 100 shares of high-quality dividend stocks and build a weekly dividend income as per this calendar, but we have made no changes to this goal last week:
 

Weekly dividends income calendar
 
You can see the entire spreadsheet here.

 

Market Outlook

 

The market suffered another wave of selling. The panic was once again fueled by Omicron panic, FED early tapering, and bad employment data (which in my view should be good for the market preventing FED from tapering). The market is driven by craziness, volatility, and lack of direction.
 

SPX 2021 1204

 
There are no catalysts that could be driving this market, earnings are done, and all is left is just freaks panicking. So the market is driven by mood and news. All we can rely on is technical levels. From that perspective, there are only two levels – the 50-day moving average, the 200-day moving average, and previous resistance that is now a support.

We breached the 50-day moving average.
We are in breach of the previous support but there is still a chance that the support will hold. If it holds, I expect the market to resume the uptrend.
If the support doesn’t hold, the market might go to the 200-day moving average.
 

SPX 2021 1204
 

When can we expect this market to crash? Watch earnings reports and estimates. When these change, the market will change. It has not happened yet but be open to the possibility of this changing.
 

If you want to learn more about the stock market, events that moved the market last week and will likely impact it in the near future, I recommend you to subscribe to our weekly newsletter. Knowing where the market is heading and knowing when you should expect its reversal can benefit your trading and investing. Subscribe and you get one month free.

 

Investing and trading report in charts

 

Account Net-Liq

 

TW Account Net-Liq week 48

 

Account Stocks holding

 
TW Account holdings week 48
 

Last week, S&P 500 grew 56.89% since we opened our portfolio while our portfolio grew 23.53%. On YTD basis, the S&P 500 grew 27.05% and our portfolio 16.55%.

The numbers above apply to our stock holdings only. Our overall account net-liq grew by 324.25% this year! This is thanks to options trading that generates income. It can be also seen how the options help lower our cost basis. Just compare the P&L in the regular (left) column with the P&L in the “Options adjusted” column. For example, our AES holding would be a loser as of today (down -9.37%), but we generated enough income (we can call it also a return of our invested capital) and that position is 128.10% up.
 

Stock holdings Growth YTD

 
TW Account holdings Growth YTD
 

I expect our stock holdings to start outperforming the market hopefully soon. The entire portfolio beats the market by far thanks to monetizing those positions.

Our 10-year goal is to grow this account to $1,000,000.00 value in ten years. We are in year two and we accomplished 8.73% of that goal.

Our 6-year goal is to reach $175,000 account value to be eligible for portfolio margin (PM) and today we accomplished 49.87% of that goal.

Our 2021 year goal is to grow this account to a $42,344.00. We already accomplished this goal.

 

Investing and Trading Report – Options Monthly Income

 
TW Options Income week 48
 

Investing and Trading Report – Options Annual Income

 

TW Options Annual Income week 48
 

Our dividend goal and future dividends

 

TW Received vs Projected Dividends week 48
 

We have accomplished our dividend income goal. We planned to make $1,071 of dividend income this year and we finished receiving $2,667.85. However, we accumulated enough shares to start making $4,320.18 a year.
 

TW Received vs Future Dividends week 48

 

Our account cumulative return

 

The chart below indicates our cumulative adjusted return.
 

TW cumulative return wk 48
 

TW win ratio wk 48
 

As of today, our account cumulative return is 37.48% (note, data in this section are since March 13, 2021, only as that is the date we started tracking these metrics. Thus the results are skewed a bit and will show full picture next year.).

 

Conclusion of our investing and trading report

 

This week our options trading was within our expectations and I believe, the rest of the month will be even better.

We will continue accumulating the dividend growth stocks in our portfolio to reach 100 shares and continue building our cash reserves so we have enough cash to sustain any market corrections and be able to buy depressed stocks.

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




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Posted by Martin November 30, 2021
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Idiots returned to the market, rejoice and buy


And here we have it again. Hysteria renewed, or hysteria v2.0, whatever you name it. Despite cases of the new Omicron variant declining in South Africa hysterics returned to the markets selling everything. Powell didn’t help either this time as he said tapering may start sooner than expected.

But don’t worry, his words were to test market waters and see how the market reacts… combined with Covid matter that is not a matter at all.

This hysteria is temporary ease of the overvalued market. There is no impact, and probably will be no impact, on earnings and estimates, so the market will recover and this hysteria will be just a laughable event to talk about in a bar. I take this as an opportunity to buy more shares of the stocks I want to own and let the idiots panic and sell. Tomorrow, they will be buying it all back incurring losses on transaction costs and possibly buying higher than when they sold off.




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