ARKK returns last year and at the beginning of this year were so embarrassing that they decided to change their home page to no longer indicate YTD returns.
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Making 45% Annually Trading Options Against Dividend Growth Stocks
ARKK embarrassing results
Our SPX PCS strategy will be spectacular when panic selling ends
This selloff in SPX is a blessing as well as a sour moment in the markets. It is a blessing because once this ends and people realize that they were overreacting once again, we will see a nice recovery. It may be slow and long, or a “V” shaped. In both cases, once our SPX strategy signals tell us that it is safe to enter the trading again, we will be taking every trade in our trading schedule and making money fist over the hand.
It is a sour moment because we have to stay out and sit on the sidelines. But it is still a good thing compared to my previous trading.
My SPX trading before was to take a trade every week, every expiration, use all available buying power, and scale up the trading indefinitely. It was wrong!
I traded Iron Condors mostly. I thought it would be the best strategy out there. It was not. No strategy works all the time in any market. And Iron Condors can burn you badly in the strong bull market, as well as in crashes like today. It took me some time to finally admit, I was wrong and schedule my trades. Do the exact opposite of what I was doing.
So, I developed a set of signals to help me to determine the trend and be able to see whether a trend is safe enough to open a trade or stay out. So far, it worked well as besides a few trades I took and had to close for a small loss, I was able to stay out and wait for the mass panic selling to end.
But now, I can see that this strategy will deliver spectacular returns as we will be riding the recovery up. And I am looking forward to it.
But there is a caution to be taken from me and my followers. Even if we start seeing recovery and resume of a bull market, our signal may still be negative telling us to stay away. The signal may be turning positive but it still can be in negative territory. The reason for this may be that any potential recovery may just be a bounce or a relief rally. And if that will be the case, we have to stay out too.
But once these hurdles are cleared and the market will be going higher again, we will resume our SPX trading and profit spectacularly. Stay tuned for the recovery and be patient.
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2022 Week 03 investing and trading report
Last week the SPX went on a crazy downhill. At first, trading was calm but then it sped up and everybody was selling like crazy. Panic was the investment strategy. And who panicked first was the winner (sarcasm). The initial catalyst for selling was the FED raising the rates surprisingly more than expected. But seriously, what was so surprising about it? And what idiot believes that a few percentage points of higher interest rates above the current zero would destroy the economy?
Our trading and investing was good last week and though our account suffered as probably everyone’s account out there, we were able to stay afloat. Rebalancing our trades, selling out some risky positions, and raising cash helped us to mitigate the worst and be prepared for buying opportunities. And those opportunities will come!
Here is our investing and trading report:
| Account Value: | $97,815.29 | -$340.73 | -0.35% |
| Options trading results | |||
| Options Premiums Received: | $1,448.00 | ||
| 01 January 2022 Options: | $5,706.00 | +5.83% | |
| Options Premiums YTD: | $5,706.00 | +5.83% | |
| Dividend income results | |||
| Dividends Received: | $5.77 | ||
| 01 January 2022 Dividends: | $232.02 | ||
| Dividends YTD: | $232.02 | ||
| Portfolio metrics | |||
| Portfolio Yield: | 5.66% | ||
| Portfolio Dividend Growth: | 8.10% | ||
| Ann. Div Income & YOC in 10 yrs: | $33,014.87 | 25.66% | |
| Ann. Div Income & YOC in 20 yrs: | $373,608.11 | 290.34% | |
| Ann. Div Income & YOC in 25 yrs: | $2,176,467.68 | 1691.41% | |
| Ann. Div Income & YOC in 30 yrs: | $21,771,477.76 | 16,919.35% | |
| Portfolio Alpha: | -0.65% | ||
| Portfolio Weighted Beta: | 0.61 | ||
| CAGR: | 529.84% | ||
| AROC: | 5.96% | ||
| TROC: | 12.21% | ||
| Our 2022 Goal | |||
| 2022 Dividend Goal: | $4,800.00 | 4.83% | In Progress |
| 2022 Portfolio Value Goal: | $151,638.03 | 64.51% | In Progress |
| 6-year Portfolio Value Goal: | $175,000.00 | 55.89% | In Progress |
| 10-year Portfolio Value Goal: | $1,000,000.00 | 9.78% | In Progress |
Dividend Investing and Trading Report
Last week we have received $5.77 in dividends bringing January’s dividend income to $232.02.
We bought:
Here you can see our dividend income per stock holding:
Growth stocks Investing and Trading Report
Last week we bought the following growth stocks:
We closed our Amazon (AMZN) position but we plan to buy back once the panic selling is over. Originally we bought AMZN at $3,250 a share. We closed the position for $3,000 a share for a small loss. Now, the stock is trading at $2,850 a share. Surprisingly, APPL holds better than AMZN. Right now, just waiting for a good opportunity.
Options Investing and Trading Report
Last week we rolled our strangle trades to keep our account safe. That raised cash and buying power. Unfortunately, it didn’t help our net-liq much. We still went down.
These adjustments delivered our January income by $1,448.00 bringing January total to $5,706.00.
Once those trades are over, the net-liq will be released.
We were actively trading our SPX strategy that delivered $190.00 weekly income (loss).
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 $5.77 in dividends last week. Our portfolio currently yields 5.66% at $98,156.02 market value.
Our projected annual dividend income in 10 years is $33,014.87 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 $5,399.79 annual dividend income. We are 16.36% of our 10 year goal of $33,014.87 dividend income.
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 $131,493.57 to $132,015.51 last week.
In 2022 we plan on accumulating dividend stocks, monetizing these positions, HFEA strategy, and SPX trading. We plan on raising more of our holdings to 100 shares so we can start selling covered calls. We continued rebalancing our options trades that released buying power significantly. That allowed us to start buying shares of our interest again.
Our goal is to accumulate 100 shares of dividend growth stocks we liked and then start selling covered calls or strangles around those positions. We also planed on reinvesting all dividends back to those holdings.
Investing and trading ROI
Our options trading delivered a 5.83% monthly ROI in January 2022, totaling a 5.83% ROI YTD. We hope that in 2022 we exceed our 45% annual revenue selling options against dividend stocks target!
Our entire account is down -6.53% underperforming our projections and the market.
Our options trading averaged $5,706.00 per month this year. If this trend continues, we are on track to make $68,472.00 trading options in 2022. As of today, we have made $5,706.00 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 will be able to review in my next report. The SPX strategy held well so far, and our signals kept us away from opening new trades.
Market Outlook
The stock market lost almost 6% last week. That is very unusual price behavior and it happened like that only a few times in the past. What will happen next? No one knows. Originally, I wanted to add a few shorts to play the downward movement of the market but I think, the market may be down too much already and oversold, and we may see a bounce or a very strong counter-rally. Any shorts can rip you off. So, I decided to play it safe and stay out. When I see a sign of a reversal, that may be a point to start buying again and open new bullish trades. It may happen next month or in March. Until then, we must wait.
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
Account Stocks holding
Last week, S&P 500 grew 54.96% since we opened our portfolio while our portfolio grew 20.74%. On YTD basis, the S&P 500 fell -9.80% and our portfolio -9.04%. This clearly indicates that our stock holdings performed better than the market.
The numbers above apply to our stock holdings only. Our overall account net-liq dropped only by -6.53% this year thanks to our options strategies that generated enough income to stay up a bit.
Stock holdings Growth YTD
I expect our stock holdings to start outperforming the market hopefully soon.
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 9.78% 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 55.89% of that goal.
Our 2022 year goal is to grow this account to a $151,638.03. and today we accomplished 64.51% of this goal.
Investing and Trading Report – Options Monthly Income
Investing and Trading Report – Options Annual Income
Our dividend goal and future dividends
We planned to make $4,800.00 in dividend income in 2022. As of today, we received $232.02. This is in line with our projected dividend goal for January 2022. We also accumulated enough shares to start making $5,399.79 a year.
Our account cumulative return
The chart below indicates our cumulative adjusted return since we started tracking this metric.
Here is the cumulative return for the year 2022:
Our win ratio overall:
Our win ratio for 2022:
As of today, our account overall cumulative return is 34.30% (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.) and our 2022 cumulative return is -9.03%.
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2022 SPX put credit spreads trading review – week 03
What a week! And a month! SPX got hammered though not as much as Nasdaq. We are in a stage where investors are dumping everything now. Even good quality stocks. I guess margin calls are hitting them hard so they have to liquidate even good holdings in their portfolios. Last two weeks, I was rolling, adjusting, and liquidating some positions to stay afloat. Now it is paying off.
I also reversed our SPX strategy to selling calls but mostly staying away from the market. It is extremely difficult to short the market (any market) and we are down 9% so far. Yes, we can go down 20% from here, but we may also very well be bottoming and the rally can be extremely hard. You can get caught short with pants down, you reverse the trade, and the rally fails. You will get ripped twice. For this reason, I prefer staying out.
Yet, I opened another long-term trade that was still favorable. We finished the week up +3.74% while SPX lost -5.68%. Our account is still up 46.25% since the beginning of this program. If the selling continues, I might start seeing some troubles too, though. Those long-term trades are still safely beyond 1 SD but if the market keeps falling at this rate, it may not be safe anymore.
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 to determine whether 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 new trade |
| TUESDAY | Negative | No new trade |
| WEDNESDAY | Negative | New 7 DTE Call credit spread trade opened credit: $95 Exp: Jan26 |
| FRIDAY | Positive | New 60 DTE trade opened credit: $95 Exp: Mar18 (pm) |
| EVERY MONTH | — | No new trade opened |
On Monday, our entry signal was negative and we stayed away from the market.
On Tuesday, our entry signal was negative and we stayed away from the market.
On Wednesday, our entry signal was negative however, we opened a credit call spread.
On Friday, the signal for the 60 DTE trade was mixed/positive and we opened a new 60 DTE credit spread. I got confused and instead of on Friday, I opened the trade on Thursday. If opened on Friday, I could get a better position. But mistakes happen.
We didn’t open any new 120 DTE debit hedging trade this week. Since the market outlook is very negative and we are in backwardation, I might be opening a new additional hedge trade on Monday.
Here are our delayed open trades:
SPX PCS delayed trades
The trades are two weeks delayed. If you want to see the most recent trades or receive alerts, subscribe to our SPX alerts.
Overall, the strategy resulted in a $190.00 gain last week. Note that the gain might be unrealized as some or all trades may be still open.
| Initial account value (since inception: 12/07/2021): | $3,600.00 |
| Last week beginning value: | $5,075.00 |
| Last week ending value: | $5,265.00 (+46.25%) |
| The highest capital requirements to trade this strategy: | $8,975 |
| Unrealized Gain: | $390 (+4.53%) |
| Realized Gain: | $1,275 (+14.81%) |
| Total Gain: | $1,665 (+19.34%) |
SPX PCS account value
Our SPX net-liq increased a bit last week but I consider it a good result since the market is volatile and non-trending, well, it is trending but the trend is choppy and weak.
SPX PCS account vs SPX index net liq
However, comparing the account with SPX net-liq, we are still outperforming this horrible market.
SPX PCS account vs SPX index
If the market continues being this choppy or even going down as fast as it has so far, I expect slower or no growth, because I will be out of the market.
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:
Note, if you wish to subscribe to multiple levels, you can do so by subscribing to one level only and then send us an email that you want to be added to other levels too.
Also, if you like this report, hit the like button so I know there is enough audience wanting to see this type of report. If you have any questions or want to see anything else about my SPX trading, do not hesitate to contact me or write a comment in the comments section. Thank you!
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Stocks bounce couldn’t hold
It looked promising in the morning as the stocks bounced higher possibly creating a bottoming process. But then it was slowly bleeding and erasing all morning gains. The investors continue to act as if FED is going to increase the rates to 10% or some similar number. Not the case. At the most, we will see a rise of 1%, maybe 1.5% this year. And with inflation expected to drop back to 2.5%, there will be no more hikes. The US economy is not that good to sustain such pressure. Raising rates higher will crash it.
The stock market paired all gains. What could have caused this bleed is unclear as trading was not overly volatile. VIX is actually down 1.8% on a down day. It could be several catalysts such as unemployment claims, Peloton crashing on a report of halting production on low demand, or other things investors perceive as bad.
From the technical perspective, this is not good as this will prompt more selling on Friday.
After the bell, companies such as Netflix will be reporting earnings. Will the earnings season help this market? So far, investors seem to be ignoring earnings and the market is stuck on FED and its tightening.
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The market bounced, was it enough selling or will we see more?
After Wednesday’s market selloff we finally got a bounce. This was a second bounce last week. The question is, will a momentum hold followed by a rally – a sustainable rally, or are we seeing just a relief bounce/rally and renewed selling next week? We must wait to see.
Bearish sentiment, not so bearish market
When reviewing social media, mainly YouTube, you can see posts all calling for a crash, recession, mother of all crashes, and all the creators are telling their audience how they sold out of their positions. Their thumbnails all display flames burning behind their backs, charts crashing down through the floor, scared faces, and sensational shouts about the inevitable end of the world.
But it all indicates one thing – none of these people actually understand what forces drive the market.
I do not want to sound patronizing or pretend I am a smart cookie here. I actually didn’t know myself either until about a year ago when I learned a lot of tricks on how to look at the market to determine its health. And since I started learning and watching these indicators, I started seeing discrepancies between the market’s temporary mood and its overall health. In other words, when all the Youtubers are predicting a recession while the market is selling off, I see a few indicators telling me that there is no recession coming and that the selling is most likely a temporary correction. A good opportunity to buy a few shares of good companies.
Among those few indicators, I watch is a put-call ratio. A normal level is 0.85 – 0.90. A neutral level is 1.00. Anything below that indicates bullishness, anything above that bearishness. Look below:
The put-call ratio went up to 1.075 during this selloff. It didn’t even exceed December’s highs. And it ticked only a few tiny points above the 1.00 level. What does it tell you? It tells me that all those bears out there are either totally dumb and do not know what they are doing, or actually do not believe in what they are preaching because no one is rushing to buy puts to hedge against the imminent crash or recession. The market doesn’t expect one.
When looking at another indicator such as the VIX futures structure, I see the exact same thing. The market doesn’t expect any recession or imminent crash. At least not yet, not as of today.
And those who sold off are now sitting on a pile of cash that will proper this market higher as soon as these people start feeling the FOMO. If we have bottomed, expect a face-ripping rally.
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Market is still going lower but you should not panic
It is difficult to watch your portfolio value slump when the market is selling off. I am down almost $7k as of today. But I am not worried about it. Why?
It is because I hold good quality stocks. At least, I think they are good quality companies. And I haven’t sold a single share. In fact, I bought more shares of stocks like OHI and I plan on adding more shares of AAPL, SNOW, or TSLA. But I am waiting because I think, this market will provide even better prices as weak hands are panicking and selling.
Investors should be selling stocks that have high valuations and make no money (typically what Cathy Woods invests in) but not good quality stocks like Apple or even Tesla. Tesla may be highly valued but it is still a growing company and it is making cash hand over the fist, like Apple does, reinvests, and delivers. If you look at Coca-Cola (KO) that stock is trading at a premium constantly. Maybe today, when investors are dumping everything it may have gone lower already.
And I am optimistic and still think, this market will provide great returns in 2022. We just must wait out this volatility, enormous bearishness, and panic over nothing. And even a 10%, or 20% correction is nothing in the view of my investing and trading horizon. In fact, I would like this market to crash lower as I plan on picking up the leftover crumbs.
In my newsletter last week I wrote that if the recent support at $4,675 holds, expect the market to resume an uptrend and continue to the $4,875 level.
Then I added that if that level won’t hold, expect the market to go to $4,500 level:
Today, it is obvious that the market couldn’t hold that level and I expect it to continue lower to $4,500 level and possibly even down to 200-day moving average at $4,440 level. It would be a great opportunity to see that drop. I would be able to buy a lot of cheap stocks!
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2022 Week 02 investing and trading report
The market keeps its choppy trading on fears. Investors are getting rid of the high multiple stocks and with the bathwater, they are pouring out the baby too. The selling had an impact on our net-liq although not as bad as the prior week. Our options trading increased slightly too as we were rebalancing our portfolio options holdings.
Here is our investing and trading report:
| Account Value: | $98,156.02 | -$574.92 | -0.58% |
| Options trading results | |||
| Options Premiums Received: | $402.00 | ||
| 01 January 2022 Options: | $4,258.00 | +4.34% | |
| Options Premiums YTD: | $4,258.00 | +4.34% | |
| Dividend income results | |||
| Dividends Received: | $90.00 | ||
| 01 January 2022 Dividends: | $226.25 | ||
| Dividends YTD: | $226.25 | ||
| Portfolio metrics | |||
| Portfolio Yield: | 4.84% | ||
| Portfolio Dividend Growth: | 8.80% | ||
| Ann. Div Income & YOC in 10 yrs: | $26,029.25 | 21.58% | |
| Ann. Div Income & YOC in 20 yrs: | $287,639.80 | 238.44% | |
| Ann. Div Income & YOC in 25 yrs: | $1,701,307.25 | 1410.30% | |
| Ann. Div Income & YOC in 30 yrs: | $18,084,216.27 | 14,990.96% | |
| Portfolio Alpha: | -2.07% | ||
| Portfolio Weighted Beta: | 0.60 | ||
| CAGR: | 537.50% | ||
| AROC: | 4.39% | ||
| TROC: | 11.44% | ||
| Our 2022 Goal | |||
| 2022 Dividend Goal: | $4,800.00 | 4.71% | In Progress |
| 2022 Portfolio Value Goal: | $151,638.03 | 64.73% | In Progress |
| 6-year Portfolio Value Goal: | $175,000.00 | 56.09% | In Progress |
| 10-year Portfolio Value Goal: | $1,000,000.00 | 9.82% | In Progress |
Dividend Investing and Trading Report
Last week we have received $90.00 in dividends bringing January’s dividend income to $226.25.
We bought:
We also sold the following shares as the stocks didn’t perform as expected:
Here you can see our dividend income per stock holding:
Growth stocks Investing and Trading Report
Last week we didn’t buy any new positions in growth stocks.
Options Investing and Trading Report
Last week we rolled a few of our strangle trades to keep our account safe. Each time the stock moved up or down towards one or the other strike price, it consumed our buying power. Rolling the trade to the center of our strangle, we brought in credit and released buying power.
These adjustments delivered our January income by $402.00 bringing January total to $4,258.00.
We were actively trading our SPX strategy that delivered -$595.00 weekly income (loss).
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 $90.00 in dividends last week. Our portfolio currently yields 4.84% at $98,156.02 market value.
Our projected annual dividend income in 10 years is $26,029.25 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 $4,692.63 annual dividend income. We are 18.03% of our 10 year goal of $26,029.25 dividend income.
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 $131,541.85 to $131,493.57 last week.
In 2022 we plan on accumulating dividend stocks, monetizing these positions, HFEA strategy, and SPX trading. We plan on raising more of our holdings to 100 shares so we can start selling covered calls. We continued rebalancing our options trades that released buying power significantly. That allowed us to start buying shares of our interest again.
Our goal is to accumulate 100 shares of dividend growth stocks we liked and then start selling covered calls or strangles around those positions. We also planed on reinvesting all dividends back to those holdings.
Investing and trading ROI
Our options trading delivered a 4.34% monthly ROI in January 2022, totaling a 4.34% ROI YTD. We hope that in 2022 we exceed our 45% annual revenue selling options against dividend stocks target!
Our entire account is down -6.20% underperforming our projections and the market.
Our options trading averaged $4,258.00 per month this year. If this trend continues, we are on track to make $51,096.00 trading options in 2022. As of today, we have made $4,258.00 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 will be able to review in my next report.
Market Outlook
The stock market continued to struggle with the trend. It failed to go higher and continued being pressured down by interest rate fear when tech stocks were selling off. But we had a few bright moments in the market trend when the buyers stepped in and bought a fairly large morning selloff. On both occasions, the market closed in green. I expect the market to stabilize and move higher propped by earnings, given that the earnings reports will be good and companies also provide positive guidance. If not, more selling may come.
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
Account Stocks holding
Last week, S&P 500 grew 61.19% since we opened our portfolio while our portfolio grew 28.88%. On YTD basis, the S&P 500 fell -3.57% and our portfolio -0.90%. This clearly indicates that our stock holdings performed better than the market.
The numbers above apply to our stock holdings only. Our overall account net-liq dropped by -6.20% this year.
Stock holdings Growth YTD
I expect our stock holdings to start outperforming the market hopefully soon.
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 9.82% 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 56.09% of that goal.
Our 2022 year goal is to grow this account to a $151,638.03. and today we accomplished 64.73% of this goal.
Investing and Trading Report – Options Monthly Income
Investing and Trading Report – Options Annual Income
Our dividend goal and future dividends
We planned to make $4,800.00 in dividend income in 2022. As of today, we received $226.25. This is in line with our projected dividend goal for January 2022. We also accumulated enough shares to start making $4,692.63 a year.
Our account cumulative return
The chart below indicates our cumulative adjusted return since we started tracking this metric.
Here is the cumulative return for the year 2022:
Our win ratio overall:
Our win ratio for 2022:
As of today, our account overall cumulative return is 46.77% (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.) and our 2022 cumulative return is -0.58%.
I have a favor to ask. If you like this report, please, hit the like button so I know that there is enough audience that like this content. Also if there is something you want to know or you want me to change this report to a different format, let me know in the comments section.
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2022 SPX put credit spreads trading review – week 02
We finished the second week on a down note. As the market was extremely choppy, we had to close a few trades for a loss and we skipped pretty much all trades except our Friday trade because all signals were negative. We finished the week down -10.49% while SPX lost -0.30% only. However, our account is still up 40.97% since the beginning of this program.
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 to determine whether 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 new trade |
| TUESDAY | Negative | No new trade |
| WEDNESDAY | Negative | No new trade |
| FRIDAY | Positive | New 60 DTE trade opened credit: $95 Exp: Mar18 (pm) |
| EVERY MONTH | — | No new trade opened |
On Monday, our entry signal was negative and we stayed away from the market.
On Tuesday, our entry signal was negative and we stayed away from the market.
On Wednesday, our entry signal was negative and we stayed away from the market.
On Friday, the signal for the 60 DTE trade was positive and we opened a new 60 DTE credit spread.
We didn’t open any new 120 DTE debit hedging trade this week.
Here are our delayed open trades:
SPX PCS delayed trades
The trades are two weeks delayed. If you want to see the most recent trades or receive alerts, subscribe to our SPX alerts.
Overall, the strategy resulted in a -$595.00 loss last week. Note that the gain might be unrealized as some or all trades may be still open.
| Initial account value (since inception: 12/07/2021): | $3,600.00 |
| Last week beginning value: | $5,670.00 |
| Last week ending value: | $5,075.00 |
| The highest capital requirements to trade this strategy: | $8,975 |
| Unrealized Gain: | $200 (+2.94%) |
| Realized Gain: | $1,275 (+18.75%) |
| Total Gain: | $1,475 (+21.69%) |
SPX PCS account value
Our SPX net-liq dropped a bit last week but I expect it since the market is volatile and non-trending, well, it is trending but the trend is choppy and weak.
SPX PCS account vs SPX index net liq
However, comparing the account with SPX net-liq, we are still outperforming the market.
SPX PCS account vs SPX index
If the market continues being this choppy, I expect slower growth. I also plan on adding other trades to this strategy such as SPY trading. Also, the trading will be directional based on my proprietary indicators.
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:
Note, if you wish to subscribe to multiple levels, you can do so by subscribing to one level only and then send us an email that you want to be added to other levels too.
Also, if you like this report, hit the like button so I know there is enough audience wanting to see this type of report. If you have any questions or want to see anything else about my SPX trading, do not hesitate to contact me or write a comment in the comments section. Thank you!
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My Goal 2022
I set up my investing and trading goal for 2022 and now is the time to write it down for the record. I plan on having the goal for 2022 simple and easy to track yet it may evolve over time.
2022 Goal summary
In 2022, I will focus on the following tasks:
- Buying dividend growth stocks and monetizing those positions.
- Developing SPX trading.
- Developing and managing 15% of the portfolio in the HFEA strategy.
- Increase Net-Liq value of the account by 30%
- Maintaining 10% of the portfolio in tech growth stocks
- Increasing exposure to SPY LEAPS and add one or two new contracts
Dividend growth stock purchasing goal
In 2022 I will continue purchasing dividend growth stocks as I did in 2021. But, I will also focus on adding high-yield dividend stocks and ETFs that are relatively safe. Here is the starting list of goals of stocks I plan on purchasing this year.
This goal is a developing task and it will morph over time and grow. It is not a rigid set of tasks. If I see a new opportunity, better than the one listed in the table above, I will shift my focus.
However, besides the dividend growth stocks, I will be buying high-yield dividend stocks such as RYLD, IEP, and QYLD (and may add other covered calls ETFs) for high yield. These stocks do not provide capital growth though but I will be purchasing them for income. I would like to create a dividend income that would offset my mortgage payments. And I am starting with HELOC to offset. That will give me peace of mind that I have cash and income saved that would help to pay my monthly payments.
The “BSV salary reserve goal” is a task that I wish to save enough cash in BSV to cover my annual salary, health insurance, taxes, etc. to be able to trade for a living. I am a conservative person, so I want to have enough savings in case the stock market pukes and I won’t be able to withdraw money from the account. In other words, I do not want to get caught with my pants down.
SPX PCS trading goal
In December 2021, I started trading SPX again using credit put spreads. I modified the strategy and now I use simple indicators to determine whether to trade PCS or stay away.
In 2022, I will be opening trades in the following days and if the indicators tell me that it is safe to open a trade:
Mondays (7 days to expiration)
Tuesdays (30 days to expiration)
Wednesdays (7 days to expiration)
Fridays (60 days to expiration)
And every month, I will be adding an SPX hedge for black swan events.
If the indicators are negative, we will skip the trade. I dedicated $3,600 for the SPX trading, currently, the account (sub-account) is at $5,370.00, an approximate growth of 47.33%. Although it may change over time my goal will be to increase this sub-account to $10,000 by EOY.
If you are interested, you can subscribe to SPX alerts and receive an alert via email or you can follow our Twitter for the alerts (in order to follow the Twitter account, you must be a subscriber).
Investing 15% in HFEA goal
HFEA is again a strategy (passive with quarterly rebalancing) that involves buying 3x leveraged ETFs and holding them for growth. Other investors who use this strategy reported up to 45% earnings in their accounts. I dedicated approx. $15,000 to this strategy (representing 15% of my portfolio). In December 2021, the HFEA account was up almost 10%. In January, thanks to the wobbling market, the account lost over 6% and the entire HFEA account is up about 2.4%.
There is not much I can do about this strategy. I just hold and in March (and following months) I will be rebalancing (either adding new cash to increase the account to 15% of my entire portfolio or trimming the holdings if above the 15% threshold. And, also, rebalancing ETFs within the HFEA account to keep the target allocation).
When trimming the HFEA I plan on saving the cash to dividend stocks or ETFs. When adding cash (during underperforming quarters) I will use the saved cash to increase the HFEA balance. I have not yet decided which stock or ETF I will use. I planned to use BSV but I may elect to use another stock or ETF.
Net-Liq value goal
I created a 10-year plan on growing my portfolio (all accounts together) and for 2021 my goal was to reach $42,344.06 net liq value. I calculated the initial balance and its increase based on estimated growth from options trading, stocks accumulation, stocks growth, and received dividends. The year 2021 was so exceptional that I exceeded that goal almost three times.
Well, I do not expect this to happen in 2022. But I did the same calculation as in 2021 and my new goal for the portfolio value is $151,638.03.
I still have goals from last year that are long-term:
6-year Portfolio Value Goal: achieve $175,000.00 net-liq value.
10-year Portfolio Value Goal: achieve $1,000,000.00 net-liq value.
These goals are well underway and if my portfolio growth keeps growing at the estimated pace, I should be able to achieve the 6-year goal next year in lieu of planned 2024 and the $1M goal may get accomplished at the end of year 9. Let’s see, how 2022 progresses.
Invest 10% in growth stocks goal
Although I primarily focus on dividend stocks, I also want to own a few tech stocks such as Apple (AAPL), Snowflake (SNOW), Amazon (AMZN), Tesla (TSLA), Google (GOOGL), etc. In 2022 I plan to invest in these stocks but keep my exp[osure to 10% of my entire portfolio, though. The ultimate goal will be to reach 100 shares of each to be able to sell covered calls.
Monetizing stock holdings goal
My goal with all my stock holdings is to reach 100 shares so I can start selling covered calls against these positions. I will be also selling strangles (and strive to cover them, to have enough cash to cover the put side, and own 100 shares to cover the call side. In 2021, trading strangles and covered calls was my biggest moneymaker. I will continue to do so in 2022 although at a slower pace.
At the top of this blog, I state “making 45% annually trading options against dividend growth stocks”. In 2021 I made over 62%. In 2022, I plan to achieve 30%.
LEAPS goal
In 2020 and 2021 I added SPY LEAPS contracts to my holdings. The 2020 LEAPS is my biggest gainer. It is unrealized gain, though I will be rolling the LEAPS further away at some point cashing my gains. In 2022 I plan on adding one or two more contracts of the SPY LEAPS to my portfolio.
That’s all for 2022. I will be reporting progress on this goal regularly:
Every week, I will report my overall portfolio progress and achievements the same way as I did last year.
I will also report my SPX sub-account progress every week.
Every month, I will report HFEA and Challenge account progress.
I would like to ask you if you could write me in the comments what you want to see in my reports or if you want to see them modified and how. Also, please hit the like button under this post so I know you liked the content and that you want to see more of it in the future. Thank you!
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