You can also follow our Facebook page where we post our trades and results.
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Making 45% Annually Trading Options Against Dividend Growth Stocks
WEEKLY RESULTS July 07, 2018
You can also follow our Facebook page where we post our trades and results.
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June 2018 trading, investing, results
S&P 500 2,713.22 -13.49 (-0.49%) Dow 30 24,174.82 -132.36 (-0.54%) Nasdaq 7,502.67 -65.01 (-0.86%)
June is over and I battle with myself to keep up posting my trades and results. It is hard to do so. I work full time and manage a few accounts at the same time. I trade many trades and it is difficult to post them all.
Just in June itself, I made 666 trades in one account – the IRA account alone. Overall, I made 2593 trades.
With so much trading, it became more and more difficult for me to keep up posting all my trades and their adjustments. I wish I could post more to be able to help others to learn trading but as of now I do not know how to do that without being consumed by it.
I do download my csv file from my brokerage account which I upload to the spreadsheet which then calculates everything else for me, such as premium income, number of trades, net liquidation value, and other portfolio metrics but I still couldn’t figure out how to record my individual trades so you can benefit from it. As of now, I am not able to do it and must stop doing it as it is very time consuming.
I still will be posting some of the trades on our Facebook Page where you can follow those trades.
I trade options to create income. Income, I can use to invest into dividend growth stocks and to pay for the bills and other expenses.
As of today, I manage three accounts:
1) A business account
2) An IRA account
3) A ROTH IRA account
4) A personal margin account
Over time, I finally came to realization that a trading capital is important. I am under-capitalized in my business account. And I struggle in that account very much. I get beaten hard and losing money no matter how much I try not to.
Same thing is happening with my ROTH account. Not enough capital. Troubles to trade. And… losing.
But the IRA account has enough capital and trading it is easy and not stressful. When a trade goes against me I feel no fear as I have enough capital to adjust the trade and move on. I don’t have such comfort in the business account and in the ROTH account. Unfortunately.
Thus, I decided to adjust my strategy. I will mute trading in the business and ROTH accounts and will start saving money. I will take only small trades, small enough to take stock assignment should it happen or have enough capital to adjust a trade. This means no trading in those two accounts and be saving only to raise enough capital.
Here is the June 2018 trading and dividend investing results. The results are mixed. Mixed with great income in IRA account but terrible losses in the business account.
As you can see above, the IRA account performed great while other accounts suffered losses. For example, I got assigned to JNJ stock but I didn’t have enough capital to take the assignment. So I had to liquidate the position at a loss. Or another position – STX going against me (volatility raising) and the account couldn’t bear it, so I had to close at a loss. Over-trading and little capital is a killer.
There fore, I need to adjust and start saving.
Here is the entire year results so far:
· Dividend stock investing
Dividend investing is doing great. I keep using 50% of all options income and buy dividend stocks.
Since the death of David Fish, who maintained the great dividend champions list I had to create my own list to keep the selection of stocks running as no one seems to be updating the David Fish’s list anymore.
As of now, my list is semi automated so I do not have to do all updates manually myself but it doesn’t include all stocks, only those I invest in. And I keep buying.
Here is a review of our accounts stock holdings:
Traditional IRA
ROTH IRA
TD account
TBD
In June we purchased the following shares:
· Dividend Income
ROTH IRA dividend income
IRA dividend income
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May 2018 trading, investing, results
S&P 500 2,779.03 +8.66 (+0.31%) Dow 30 25,316.53 +75.12 (+0.30%) Nasdaq 7,645.51 +10.44 (+0.14%)
May finished so fast! I had a very little time to post and update my trading results and dividend investment progress.
May 2018 finished well as we made nice cash trading options and purchased a new dividend stock positions increasing our future dividend income. Click below to read more!
Read More
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Entering a trade
A reader of mine recently sent me a question: “…is it possible to show me step by step a trade you have recently made with puts?” I decided that it may be a good idea to write a post depicting the entire process step by step with pictures and show how I decide and place a trade.
Although, it may be difficult to do as no trade is exactly same and there will always be the “human factor” in each trade. I try to eliminate as much the “human factor” as possible but it is not always bad idea to have the judgment the computer doesn’t have. Some emotions and fear is good to have, some trade adjustments may be OK to let run or roll earlier than what a computer would do; and there will never be enough space to show all variations a trade may have.
Trading options is not same for every market. It is different when trading equities and when trading indexes. In this post I will explain why and how I trade options using SPX and stocks.
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Weekly results May 25, 2018
S&P 500 2,721.33 -6.43 (-0.24%) Dow 30 24,753.09 -58.67 (-0.24%) Nasdaq 7,433.85 +9.42 (+0.13%)
This post actually contains results from the last two weeks as my internet modem refused to work last week so I was dependent on my phone only.
Last week trading was good for neutral trading. Opening Iron Condors paid the most as the markets got pretty much nowhere. Last week we rolled a few trades which needed attention and opened a few new trades which mostly ended successfully.
We also collected nice dividends last week and added a few new dividend aristocrats to our account. I consider the last two weeks successful.
If you wish to see details and our results on Net-Liq, options income and new dividend stocks we added to our portfolio, please continue reading.
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Is the market going to fall or rise next?
When we broke the resistance level last week and rallied up to 2742 level on Monday, we basically reached my previous rally target.
There fore I added a “buy” signal to my chart.
Of course, it is not a buy signal meaning I would be rushing to be buying everything and anything at that time but that expresses my bullish bias. I use it to eventually navigate my trades and it helps me to reverse the existing trades if the trend reverses.
Yesterday, I hoped for renewed rally although I knew we reached a Fib target and thus it would be unlikely.
Yet I believed…
And I added my “buy” signal to the chart. Today, I was proven that my original expectations were correct and my new enthusiastic beliefs were wrong.
I am expecting retracement now, so I reversed to “sell” (and I also reversed a few of my put trades into call spreads) to ride this thing down.
But it wasn’t as easy as I would thought. The market was a bit choppy during the day and I noticed that I had a bullish bias although I saw the market as being “bearish” for the time being.
Note that “bearish” doesn’t mean that I expect a bear market or any other catastrophe to happen. This is just a normal short term reversal, retracement, or a pullback after a week long rally. This market needs to take a rest before it continues higher, And I still see this market as bullish which is on its path to make yet another all time high. I do not know when it happens and how long it would last, but I expect it to happen.
And due to a lack of conviction on my side, I was reversing my trades a few times before I decided to leave it as is and trust my observations.
Above you can see my “craziness” reversing my trades from put spreads into call spreads, back to put spreads and call spreads again.
So what’s next?
Well, to my disappointment, the market decided to hold the 2700 (actually 2707) level. It can be promising for the market. We held the level, we stayed above the previous resistance, now a new support… so, we should be good. We may go a bit lower to retest that upper trend of the original triangle we broke from but then we should resume the uptrend, or shouldn’t we?
It is thus promising to see the buyers stepping in and hold this market up. If we were poised for a selloff, we would already crash and followed violently down. It didn’t happen.
My only concern is that we have returned into the sideways channel (see the dashed lines in the above chart). If that’s the case, this breakout will be a fake breakout. Then we will be returning back to 2585 level. And my trades are not prepared for that eventuality. Reversing them would cost some buying power I am becoming short of.
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Weekly results May 12, 2018
S&P 500 2,727.72 +4.65 (+0.17%) Dow 30 24,831.17 +470.97 (+0.37%) Nasdaq 7,402.88 -2.09 (-0.03%)
Last week was good. Our net-liq grew up again as the market went up. We did a few adjustments only of the existing trades. Last week we could close a few “long term” trades (trades which I was dragging along for some time), there fore last week was successful and I was happy about it.
The market was behaving well, we broke out of the triangle and rallied. This could be good for the market and we could rally further although as of Friday we were a bit overbought. On Monday, we may see a small retreat, which hopefully won’t turn into a new sell off. We are on the resistance level and it may not hold. Time will show.
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What’s next?
The market created a reversal hammer candle last Friday and retesting the 2600 support. Since then the markets rallied higher.
Today, we broke a triangle resistance and we also broke above the previous lower highs resistance which I deem as a very good sign for this market.
Now we still have a few resistances to break.
One is a resistance slightly below 2720 and a larger triangle at 2705. If both resistance get broken I expect a rapid move higher to 2800 level. This will be fueled by short squeeze as unbelievers will rush closing their losing positions and those who sold the market (sold low) will rush to chase the market (and buy high).
This can take another month to develop in my opinion which would mark a third or fourth month of recovery (remember my older posts where I posted that in the last 20 years, it took the market 1 to 6 months (or 1 to 3 months in average) to recover a 10% correction and create a new all time highs. If this develops as expected, it would be 4 months of recovery.
However, I also expect that this market has about 2 years (well now only about a year and a half) of bull trend, then we may see a bear market rolling in. One reason is economic data as the world economy is showing signs of slowing down.
I think beginning or half of 2019 the market may look completely different. But who knows, my crystal ball is a bit foggy to predict the market…
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