Investing into Stocks - Hello Suckers!

Posted by Martin March 04, 2017
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dividend investing

February 2017 dividend income

We are once again at the end of the month. I still feel like the month just started and it is time to report our achievements in dividend investing (and options trading which I will publish in my next post).

This month, we received $87.79 dollars in dividends. I am happy about it for two reasons:

1) It was more dividends than what we received last month!

2) I checked my last year February dividend income, and February is typically my weak month! Last February, I made $57.42 in dividends, this month it was $87.79 dollars!

Definitely, this month was a success!

Another very positive aspect of our dividend portfolio is the dividend growth. Our annual dividend income increased to $1,062.66. This is a great increase compared to $883.48 annual dividend income from 2016.

· ROTH IRA investing/trading strategy

Here is my investing & trading strategy I use in my IRA account. If you want to read about this strategy

click here.

In our ROTH IRA account we primarily invest into high quality dividend growth stocks. However, we allow exceptions and invest to higher risk, non-growth dividend stocks.

We reinvest all dividends using DRIP program. We will be using DRIP as long as dividend income will be below $1,000 per months or dividend period.

Once our dividend income reaches the limit of $1,000 dollars per the period (quarter, dividend payout, etc.) we will cancel the DRIP program and start re-investing the dividends selectively into either new stock holding, or existing stocks.

In our ROTH IRA account we also use options trading strategy called “triple play”.

We sell cash secured puts as long as we are assigned and buy the stock. With this strategy, we do not roll the puts unless there is a great opportunity to do so or the stock dropped in price significantly.

Once we buy shares, we keep them, collect dividends, and start selling covered calls.

We sell covered calls at the money, slightly in the money, or above the money. We do this as long as we sell the stock.

During this cycle, our DRIP program ensures that we reinvest the dividends.

For example, we sell puts against stock XYZ, we get assigned and buy 100 shares of the stock. Later, we receive the dividend, which is automatically reinvested. We buy fractional shares of the stock, for example 2.468 shares. Now we own 102.468 shares of the stock. While we are selling covered calls, when we get assigned the calls, we sell 100 shares of the stock. At the end of the cycle, we are left with 2.468 shares which continue bearing new dividends. These dividends are then reinvested back into the same stock, so our position is slowly growing.

Now, you may ask, what if you buy a stock and it drops significantly down, so selling covered calls down low may result in selling the stock at a loss and what would we do in this situation?

This is a valid question and no stock, even dividend growth stocks are not protected against a violent price drop. It may happen. In this case, we may temporarily stop selling covered calls and simply wait, or we may be selling covered call down low, but we will strive avoiding assignment and rolling those calls higher as long as we get above our stock purchase price where we can let the calls assign.

Once we sell shares via covered calls, we start selling puts again.

This options strategy is slightly different than the one we use in our trading account.

You may ask why doing this and not just keeping the stock to avoid losing capital gains?

Many times, the options income from puts and covered calls is a lot larger than the dividend itself. Also bringing income from options every week or two weeks will exceed any capital gains of the stock.

And we want options income too. We want to capture dividends and we want income from options. Most of the stocks are quarterly dividend paying stocks. That means, if we keep the stock and we will not be selling options, money invested in the stock will be dead money. There may be a small capital gain, but overall, it will be dead money.

· ROTH IRA dividend income

As I mentioned above my dividend income was better than last year. I made $87.13 in dividends and all dividends were reinvested back to the companies which generated them.

Here are some numbers:

Dividend Income = $87.79 (account value = $22,205.80 +3.39%)
The account is up 6.88% for the year.

Monthly dividend Income:

This month, we purchased 100 shares of Energy Transfer Equity, L.P. (ETE) using triple play strategy. We sold cash secured puts and got assigned to the stock.

Now we are selling covered calls.

My dividend holdings:

(Click to enlarge)

· ROTH IRA options income

As I mentioned above we trade options in our ROTH IRA account to generate income which could be re-invested into dividend growth stocks.

We are in an “accumulation phase” when we deposit our sparse contributions of $50.00 dollars monthly and keep that cash in the account to trade cash secured options with it. This way we generate income from the options.

As of today, we only have approx. $2,843.90 dollars in ROTH IRA available for options trading. The goal in 2017 is to reach $6,000 available dollars for options trading.

With that money available for trading, in January 2017, we generated $35.00 dollars income from options 1.23% return on invested capital.

This month, we traded options using stocks Ensco plc (ESV) and Energy Transfer Equity, L.P. (ETE).

For ETE stock we used a triple play – dividend capture strategy we described in this post. Currently, we purchased the stock to capture the dividend. The dividend ex-day will be in February 3. As soon as we purchased the stock via cash secured puts, we sold a new covered call. If the stock stays below our covered call strike ($19.00) then we should capture the dividend (if the stock stays above the strike we may get an early assignment, although I do not expect it since we trade long term contracts).

With all collected premiums our cost basis is $17.47 per share. We got assigned at $19.00 a share, expecting 0.28 a share dividend and hopefully sell the stock at $19.00 a share. This would leave us with a nice $153 cash or 9.53% profit or 83.98% annualized return.

The play is still under progress so I will be able to report it next month.

· Our dividend investing outlook

The stock market rallied even more since January. The more the market rallies the more investors become nervous and predicting stock market crash. More and more I see people talking about the market to be too expensive.

But are the stocks really expensive? And even if so, how much can you be sure that the stocks cannot be even more expensive?

Many investors who are afraid about the market today however forget underlying fundamentals. Is the growth justified?

In my opinion it is justified. The US economy is growing at aggregate EPS growth rate of +4.90% rate. The last earnings season showed that all sectors except energy grew:

Consumer Discretionary +6.29%
Financials +5.85%
Health Care +7.95%
Technology +8.58%
Consumer Staples +6.54%
Industrials +5.45%
Materials +5.27%
Energy -4.86%
Utilities +4.63%
S&P 500 +5.58%

Can this expensive market be more expensive?

Yes, it still can be more expensive. On the way up, we will of course see many consolidations and pullbacks. But as of now, and the growing US economy, a large crisis and sell off is unlikely.

Here is another view at the market.

Let’s take a look at today’s S&P 500 TTM P/E the current multiple is at approx. 22 PE. According the the chart below, the stock market reached a lot higher levels in the past such as 30 PE multiple in 1999 – 2001 or 28 multiple PE in 2009 -2010.

Source: Bloomberg

The bottom line is that EPS growth data point to higher market growth. The US economy is also growing and that may be the catalyst for further growth of the market. There fore the already “expensive” market may become much more expensive!

Let me know what you think!

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Posted by Martin March 03, 2017
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options trading

X trade adjustment

We have a three trades using US Steel (X) as underlying stock. The stock is not one I would normally buy as a long term investment, but it is a great stock to trade options against it.

As of today, we have 3 March 10 inverted strangle contract, 1 March 10 strangle, and 1 March 3 strangle. This post is to show rolling the last strangle into the next week.

Our X trade is in ideal spot to be adjusted. So we will be rolling into the next week. Since both legs are in the money, we will be rolling both legs together:

BTC 1 X Mar3 38.00 put
BTC 1 X Mar3 37.50 call
STO 1 X Mar10 37.00 put
STO 1 X Mar10 38.50 call

@ 0.65 credit limit day

To roll this trade, we collected $65 dollars credit and now we have the following trades expiring next Friday:

(3) X March 10 40.50p / 37.50c inverted strangle
(1) X March 10 38.50p / 40.00c strangle
(1) X March 10 37.00p / 38.50c strangle

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Posted by Guest February 20, 2017
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How To Make The Most Out Of Your Budget For 2017

There are so many ways in which you can make the most out of your budget in 2017. From scrimping and saving all the way to investing there is something you can do in the New Year which will change your financial situation.

First of all you need to set yourself a budget and organize your finances in a way that makes it easy for everyone. For example draw up a list every month, bills, childcare, car maintenance, home maintenance, food, extras and savings. Make sure you have the right amount set aside for your family for those needs. Once your money is organized in the right way then you can go about making the most of it.

· Bills

Saving on bills isn’t easy but try to go with the cheapest phone company, electric company and heating company. Get offers from various places and change your contract. Sometimes this could save you an awful lot every year.

· Maintenance

Every home and every car needs upkeep and sometimes it is more expensive than others. If you have sent your washing machine it to be fixed several times the previous year then think about investing in a new one. The same goes with cars, appliances and everyday things which you use.

· Food

Most families throw away 60% of the food they buy. Find offers and promotions on household items and produce which you need and think about saving on them. Make smaller dinners, cook fresh produce which is cheaper and forget those TV dinners which are expensive and unhealthy.

· Savings

When it comes to savings this is where you can make the biggest dent in your budget. Don’t just let your savings sit in one place but instead think about investing that hard earned money and turn it into even more money.

One of the most popular ways of investing savings is into online trading. Go with a trading platform like CMC markets who can teach you everything you need to know. Have a look into currency trading which is the simpler of choices or think about buying shares and stocks into various up and coming companies.

Although online trading holds its own risks there are plenty of advantages to it as well. In effect if you trade right, sensibly and with common sense you could be looking at doubling your savings in a minimal amount of time. You do have to be prepared for losses so make sure you have the cash to spare in case you get hit with something unexpected.

Make the most out of your budget in 2017 and look into ways that not only you can save money but make money too. It isn’t just about buying the cheaper pair or trainers but it is about being able to afford the expensive pair and the cheaper pair. Many successful millionaires literally have taken a dollar and turned it into a billion. This is through the choices they have made, the stocks they have bought and the investments in which they have used their money for. You can be like that too. Set yourself a goal, start to do the research and instead of looking at banks with the biggest interest rates start looking at trading platforms that have the most stocks available to buy.

If you aren’t sure about what online trading involves then think about joining a forum or even having a consultation with a mentor who can help you begin your trading journey. Aside from the fact that you can make the most out of your savings this way you can also make the most out of yourself. You can achieve and learn along the way and set up skills which you probably didn’t even think you had. Take on online trading today and never look back again. At the end of the day, there are two options available, you either lose it or you win it. Don’t forget it isn’t like gambling but instead it is making money through your logic, your choices, your research and your skills.

Have a look into different platforms that offer free trials if you don’t want to invest some of that cash just yet. Make a change for 2017 and be the change

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Posted by Martin February 14, 2017
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Organic Farm Investing in an Organic Farm is Profitable Organic Farm is Profitable investing

Why Investing in an Organic Farm is Profitable

The organic farming industry is one the fastest growing industries around the world. People who now know about the disadvantages of eating chemically treated foods are converting to the traditionally grown vegetables and fruits. Inorganic farming is not just harmful to the consumers; it is also adversely affecting the environment. This is because the non-organic growth of food does not allow the soil to naturally rehabilitate to grow food. Hence, more artificial fertilizers and pesticides are used, and the food grown out of those chemicals is highly toxic. Environmentalists are fighting hard to take a stand on farms like these to drop these unnatural methods and instead adopt the natural way of planting and growing crops.

On the contrary, the organic food industry seems to be grabbing everyone’s attention. Organically grown food is more expensive, sometimes as much as twice the price of inorganic food. Nevertheless, the industry has seen a rise in business and the market is growing at about 15 percent per year, in sharp contrast to the overall growth of food market which is only 3 percent per year. An even more interesting fact is that people are looking for online sources to purchase their daily foods instead of going to the farmer’s market.
Rising food prices and the growing demand for biofuel oil has attracted investors into investing in organic farms. A whole variety of investors wants to marginalize their profits by putting their money in this desirable market sector. Hedge funds, pension funds, private equity and much more have been involved to benefit from the farming business. Be it the organic meat industry, organic dairy or the organic crop industry, you will find a growing market for any of these produces.

Judy Lessler is an owner of Harland’s Creek Farm in Pittsboro, in North Carolina. She and other farmers in her community have had difficulties making a sale to the local subscribers. The farmers take advantage of the Community-Supported Agriculture (CSA) model to reach customers early in the year. These customers subscribe and pay early in the year which gives way to the farmers to have enough money to grow and maintain their crops. When the crop is ready for harvest it is delivered to the customers who had subscribed for the foods.

United Natural Food (UFNI) is one of the top distribution companies for natural and organic foods. It supplies its produce to major supermarkets and has built a trusted name for itself. Its sales have recently gained momentum and are expected to have a steady growth rate. Any stock broker looking to double the amount invested with a few years may look into buying its shares.

Similarly, Iroquois Valley farms are a finance company, which owns several private farmlands. It purchases the property and then leases out to the interested people to farm the land in an organic way. It owns a total of 30 organic farms which are spread all across the USA. This company typically encourages organic farming and does not in any way promote inorganic and artificial methods. This is why it only accepts applicants looking to run their farm in an organic way. The investors can buy in shares and reap the profits until their investment limit lasts. The land can then be sold to another potential buyer for the current land value.

Sprouts Farmers Market has been dubbed as having the best growth rates in the retail world. It has had great progress in the market and has enhanced its weekly sales average from $32 to $35. Although, as of now its sales are $17 million annually, but statistics point to the fact that if the company continues to grow steadily it can be $20 million yearly in the next 4 years. Any investor looking to gain higher profits and investing in a growing company can look to invest in this ever-growing business which has the really high potential of giving back to its investors.

Inorganic farming has become a business since the idea of artificially grown crops was put into practice. It is only a matter of time that the organic farming sector will see a rush of prospects from businesses hoping to buy a share in this part of the business. Organic farming’s main features are “natural” and “health” which is why it can be seen as a business that will only attract more consumers and more profit with the passage of time.

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Posted by Martin February 09, 2017
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January options trading

January 2017 options income

Trading options in January ended very well. I definitely didn’t expect such results. At first it was slow and much of our cash was tied to other trades and I didn’t expect freeing them for trading. In fact, they are still blocked by those trades.

I expected barely $1,200 income, although I planned for $1,500 for this month. However, when It looked hopeless many great opportunities showed up and we were able to bank $2,468.87 dollars of option income. Very unexpected!

· Options Trading Strategy

Over time, our options trading strategy developed from selling naked puts to SPX Iron Condors (which caused me losing money big), back to selling put contracts against dividend stocks all the way to today’s ATM strangles using weekly options.

Trading strangles is a different strategy than selling naked puts. With strangles a trader needs to trade short term contracts so you give the market little time to go against you. A strangle requires constant adjustments. Because of that, you do not want to be stuck with 30 or 45 days contract watching you trade going deep in the money. When a trade goes against you, you want to adjust by rolling and you do not want to roll another 45 day ahead and be stuck in a 90 days trade, for example.

That’s why I trade short term ATM or near the money strangles and adjust every week. And the more I trade strangles, the more I love them. If you want to learn more about how I trade strangles, read my previous post about it. I still owe you my post about how I adjust my strangles but in a nut shell, look at the strangles this way:

Are you Ready to Trade?

If you like results of our trading open yourself an account with OptionsHouse.com and start trading with a low commission rates + free virtual trading tool!

Your new trading account will come with a paper money account and will be immediately funded with $5,000 of virtual money for you to test the options trading and if you join our trading group on Facebook you can get a guidance, ideas, and trading education. Before you commit your real hard-earned money you can use the virtual account to test our strategies, learn, and ask all questions you need to learn options trading.

Once you learn and get ready, start trading live account and earn monthly income similar to ours. And we will be happy to assist you with that.

Seize the opportunity. Open a new OptionsHouse Account Today! Open and fund an OptionsHouse account to receive up to $1,000 worth of commissions on online trades for 60 days.

Imagine that the put and call contract is a bracket and that you want constantly keep the price of the stock in between the brackets. Any time, the stock moves away from those brackets you want to adjust the trade by moving the brackets “up or down” to contain the price back in. Usually the untouched side can be bought back worthless and once that untouched side is gone you are free to roll your touched side as needed to capture the stock price. I will write more about this strategy in my next post.

This means that we will most likely be in a constant trade on one or the other side (either a put or call side). But I am fine with as it is like a game to me. And I am a playful guy.

What is our goal trading options?

I said that many times and I will repeat it again and again (to myself). I learn to trade options to create a constant and reliable source of income which I can invest into dividend growth stocks.

For this reason, my strategy is also tailored to be mechanical and eliminating any emotions and second guessing. I know what I want to trade, how, and when. And I do it every week. And it is the same thing, same trade methodology, and same execution every week. This allows me to ignore any noise in the market and not tremble in fear “what if I open a trade and it goes against me”.

· Options Trading Results

As stated above our trading in January was really great and we made $2,468.87 dollars.

Below you can see all data and progress in our trading account:

Month-to-moth trading results

(The red dots on the chart indicate income estimate, blue bars actual earnings.)

In January we made:	34 trades
Total trades in 2017:	34 trades
January 2017 options trading income:	$2,468.87 (72.06%)
2017 portfolio Net-Liq (net)*:	$4,580.66 (+33.68%)
2017 portfolio Net-Liq (gross)*:	$25,080.66 (+9.40%)
2017 portfolio Cash Value (net)*:	$24,720.33 (+24.61%)
2017 portfolio Cash Value (gross)*:	$45,220.33 (+24.61%)
2017 portfolio Equity (net)*:	$33,602.33 (+18.81%)
2017 portfolio Equity (gross)*:	$54,102.33 (+18.81%)
2017 Liability/Debt:	$20,500.00 (0.00%)
2017 overall trading account result:	+33.69%

* The numbers marked as “net” and “gross” are results with loan (liability) included (gross) or excluded (net).

· Option trades review

In January 2017 we traded stocks which provided good trading opportunity and great premiums.

Here are results of the individual trades we traded this month and my comments:

ESV

(Click to enlarge)

ESV no longer offers premiums I like to see and to take a risk for. In order to bring an income from this stock I would have to trade long term (more than 45 DTE) trades and that is not what I am interested in.

This stock also no longer meets my trading criteria so I am no longer actively trading this stock. However, I am still sitting in a long term trades I took in 2016 and managing those trades hoping they soon will end.

In 2016 I had to take an adjustment and roll a few of my calls higher as the stock jumped up. I also had more calls than puts in this stock and this month, I decided to balance this trade. So I sold 6 new naked puts for this stock. If everything goes well, in June 2017 I should be able to unload a portion of this stock.

I was assigned to 200 shares of ESV in 2016 at $11 a share. As of now, the stock is trading above $11 a share and I hope, in June 2017 I might be able to let my calls assign and sell the shares.

LULU

(Click to enlarge)

LULU is another trade I decided to trade no longer. I collected nice premiums since I started trading this stock ($3,844 total income), but the stock doesn’t meet my trading criteria (and it never has) so I decided to stop trading this stock.

As of now, I only manage the open trades until I will be able to close them all and be done with this stock.

MNK

(Click to enlarge)

MNK is another stock I no longer want to trade but must wait for it to be able to close it. There is no problem with the stock, I do not have any trouble with it, I just need to wait as those trades are also long term trades.

In January 2017 the stock offered an opportunity to adjust the existing trades without rolling them further away, improve the positions, and collect more credit. Thus I could open a few put trades to balance my open trades. I had only puts in one month and calls in the other month, so I added calls to my existing put trades and puts to my existing call trades converting them all to strangles. This operation had no impact on options buying power and delivered nice credit too. It also allowed me to lower the put strikes.

Nevertheless, I no longer wish to trade options using this stock so I will be managing the open trades until I will be able to get out. But no active trading anymore.

WYNN

(Click to enlarge)

WYNN is another trouble maker stock for me. It is overly volatile and I am terribly overexposed in this stock. I was thinking how I can reduce my exposure in this stock without taking large losses. I think I finally came up with an idea how to offset the losses.

First, I moved the options expiration far, far away so I didn’t have to deal with this trade and be able to focus on other trades. So I moved it into January 2019. Not optimal, but I did it when the stock crashed hard when Chinese officials announced limiting ATM cash withdrawals in casinos in Macau and other resorts. WYNN crashed more than 10% in 15 minutes. It happened in November 2016 and I had to take some losses. But I also decided to move the stock away so i didn’t have to worry about it.

Today, I have to deal with it again as the stock went up on (in my opinion bogus) earnings results in Macau. The WYNN resort missed badly in the US but in Macau the results were good. The stock jumped way above my calls. In my previous adjustments I managed to have 100 strike calls and 82.50 & 85 puts. Now the stock is at 103 a share.

I do not believe this stock would go higher, but I may be wrong. Nevertheless, this gives me an opportunity to unload. So I used profits from other trades and offset losses when closing some puts.

I bought back one 82.50 contract for approx. $1,100 debit, used $930 dollars profit from another trade to offset the loss and then rolled one 100 call strike up to 125 strike call and sold a new 82.50 put against it. I collected approx. $175 dollars credit doing so. This adjustment then cost me zero dollars and had a positive impact on my buying power. I will continue doing this in the coming months and unloading puts. When the stock crashes again at some point in the future, I will start unloading calls.

After I unload, I will be done with this stock too. In the future, I may decide to trade 1 or 2 contracts, but not now nor near future, though.

STX

(Click to enlarge)

STX is a stock which meets my trading criteria perfectly and I keep trading this stock actively. I will trade this stock as long as it performs. When it stops performing, I will start looking for a new candidate.

I keep trading short term, weekly strangles, keep them near the money or even sell at the money strikes. When one side gets deep in the money, I keep rolling the trade using straddles or inverted strangles.

Recently the stock reported earnings which beat estimates and the jump in price derailed my trading in this stock a bit so I had to roll my extremely deep in the money up and four weeks away instead of weeklys. I also had to sell deep in the money puts to be able to move the calls up. But I am OK with it as today I keep adjusting and rolling the trade lowering my puts and keeping the calls near the money (as of today I am in an inverted strangle).

In total, I was able to collect $5,002.50 dollars in premiums since I started trading this stock.

(Click to enlarge)

X is another stock I like to trade actively. It meets my criteria perfectly and I was able to trade weekly expiration strangles against this stock. Lately, when the stock was drifting down, I was rolling puts down while my old calls were being closed for profit and I could sell new calls to help offset debits when rolling puts.

This strategy works perfectly when the stock behaves non-violently. It can be selling all the time, price going down for weeks or months and it doesn’t endanger my trading unless the selloff is a sudden drop, big jump, or panic selling (or buying). Then that derails the trading and longer term and deep in the money rolling may be needed.

EARNINGS!!!

BMY

(Click to enlarge)

BMY was a trade I wouldn’t normally take. A few traders in our Facebook Group were involved in this trade and when the stock tumbled from 56.50 a share all the way down to 46.90 many were unsure how to manage the trade and get out.

Then the questions pop out. Should you let the options assign and buy the stock? Or should you close the trade and take a loss? Or is there any other way to fix this trade?

I offered a help and take this trade to show how I would manage it if it was my trade.

So, I sold a 56.50 strike put of BMY when it was trading at 49.53 a share. Now it was my trade!

Since I opened the trade on January 23rd I started rolling the puts down using strangles and inverted strangles. I could roll our 56.50 puts down to 55.00 strike so far. Unfortunately, many traders in the group got assigned to the stock. I wasn’t though, and continued rolling this trade out and down.

it will take time before we will be able to get out of this trade. And you may also think that I was completely crazy to take someone else’s losing trade just to show off my trading ability and undertake potentially huge losses. But I like the challenge!

GOOGL

(Click to enlarge)

GOOGL was an earnings play trade. I opened an Iron Condor (well, correctly it was a Short Iron Butterfly trade) with the following strikes:

+880 call
-855 call
-855 put
+830 put

and we collected $2,020 credit for this trade. We opened the trade on Thursday, January 26, before market closed. The next day, on Friday, January 27 we closed the trade for a total profit of $930 dollars (a nice 37% profit overnight).

ETE

(Click to enlarge)

Originally, I opened this trade with ETE stock as a triple play – dividend capture trade. It became a hard to manage trade. During the life of this trade I realized how difficult it was to manage this underlying symbol with options. I like ETE, but as options trading instrument it is untradeable.

So I decided to not manage the options into assignment and rather I would purchase the stock out right to capture the dividend and immediately after sell ITM covered call to get out of the stock.

Are you Ready to Trade?

If you like results of our trading open yourself an account with OptionsHouse.com and start trading with a low commission rates + free virtual trading tool!

Once you learn and get ready, start trading live account and earn monthly income similar to ours. And we will be happy to assist you with that.

Seize the opportunity. Open a new OptionsHouse Account Today! Open and fund an OptionsHouse account to receive up to $1,000 worth of commissions on online trades for 60 days.

· Options Trading Income & Equity Goals

For 2017 we plan to create the following average monthly income from trading:

2016 plan: $1,000 monthly income – COMPLETED in July 2016
2016 plan: $2,000 monthly income – COMPLETED in October 2016
2017 plan: $4,000 monthly income – IN PROGRESS ($2,468.87)

Note, these are monthly averages based on 12 month results. The individual monthly results month to month may differ.

For 2017 we plan to increase our portfolio equity:

at the end of 2017 plan: $130,000 equity – IN PROGRESS ($54,102.16)

When we reach the desired equity level we will apply for a portfolio margin in our trading account. This would allow us to increase our trading (and leverage) and trade more trades and more often. That would allow me to increase income and start trading for a living as a full time trader. With portfolio margin we would be able to trade up to 5 times more than with a standard RegT margin.

I do not have yet experience with portfolio margin account, but my expectations are that with approx. $150,000 equity we will be able to trade up to $600,000 account. With average 9.60% monthly income we should be able to make about $57,600 average monthly income. And that would be a great result from options trading. Income like this would definitely help us to meet our other, investing and investing unrelated goals and dreams.

Overall, I am happy with our trading results in January. The only concern I have is that our net-liq and buying power is low dues to trades such as WYNN. We need cash flow and WYNN is literally preventing it. So ultimately, our next month(s) goal will be to release the cash as quickly as possible so we can continue trading in lieu of sitting on a dead cash.

What do you think about options trading?

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4 Comments

Posted by Martin January 28, 2017
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dividend investing

January 2017 dividends

January is over and it is time to report our achievements. We, in our company, decided that this blog would report our business trading revenue only and not my personal dividend growth strategy. But then we received a few emails from our readers that they wished to see those dividend reports here on this blog as well as more dividend investing insights.

We listened and decided to keep and continue reporting and writing about dividend investing here. We would, however, split our report into two posts now on. One separate post, for dividend growth investing, and a second, separate post, for options trading reports.

Here is the first part – January 2017 dividend record.

I am happy to say that this month, our dividend income came in better than January last year.

Last year, we made $81.80 in dividends, this month, it was $87.13 dollars. I am glad to see that our dividend revenue came in higher than last year and hopefully this trend would continue in the following months. In 2015 and partially 2016 we saw a few companies in our portfolio slashing their dividends and two companies even stopped paying dividends entirely. This affected our portfolio and our dividend income. It seems the trend is reversing again and our dividends might be going up again.

Usually, when dividend companies cut their dividend, the dividend growth investors sell their positions in such companies. I didn’t do it and stayed invested. I had two reasons for this:

1) The companies which reduced their dividend were in oil business and my thinking was that oil glut will not last forever. I am invested in these stocks for long term. Sometimes in the future, they will be increasing the dividends again. I believed in those companies. And some are improving again.

2) The other stocks which cut the dividend entirely dropped in price so much that it made no sense selling them. For example Legacy Reserves LP (LGCY) stock dropped from ~$30 a share all the way down to 0.61 a share! It’s current price is $2.57 a share today. I invested in this stock at $12.40 a share and currently sitting on 86.94% loss.At some point I was losing the entire investment. So why selling. If the stock would go bankrupt, I wouldn’t lose any more money than I was already losing. Thus I decided to sit tight and do nothing. If the oil glut ends at some point and oil prices will go up again, this company may still be here and I may recover all money or even make money.

· ROTH IRA investing/trading strategy

This is just a reminder of a strategy we use in our IRA account.

We primarily invest into high quality dividend growth stocks (exceptions are allowed, such as oil plays), reinvest dividends using DRIP and grow the dividends.

We also use options trading selling cash secured puts to buy the stock of our interest, collect dividends, sell covered calls, and sell the stock.

The options strategy is different than the one we use in our trading account. We do not roll the options to avoid assignment in the ROTH account as we do it in our trading account. So we sell a put and if the put ends in the money at expiration, we let it assign, buy 100 shares of the stock, keep the stock, collect dividends, and sell covered calls as long as we sell the stock again.

While holding the stock, we collect dividends. And because of the DRIP feature the dividends are reinvested. There fore at the beginning when we get assigned, we buy 100 shares. After the dividend is re-invested, we end up with, for example, 102.83 shares. When our covered calls are assigned and we sell 100 shares we still will have 2.83 shares carrying the dividend into the future and slowly growing.

You may ask why doing this and not keeping the stock? Well I want income from selling puts and calls while sitting on the stock would bring dividends only.

For this reason I have certain money in my ROTH account dedicated to be used for this purpose only – selling puts – getting into a stock – collect dividends – selling calls – getting out of a stock – selling puts – getting into a stock… and so on and on.

· ROTH IRA dividend income

As I mentioned above my dividend income was better than last year. I made $87.13 in dividends and all dividends were reinvested back to the companies which generated them.

Here are some numbers:

Dividend Income = $87.13 (account value = $21,476.80 +3.37%)
The account is up 3.37% from previous month.

Monthly dividend Income:

This month, we didn’t purchase any dividend stock to our portfolio except dividend reinvestment and options triple play strategy, see below.

The goal for upcoming month is to save cash for dividend plays withing the account. We want to create enough revenue inside the account which can be re-invested into dividend stocks.

My dividend holdings:

(Click to enlarge)

· ROTH IRA options income

As I mentioned above we trade options in our ROTH IRA account to generate income which could be re-invested into dividend growth stocks.

As of today, we only have approx. $2,767.42 dollars in ROTH IRA available for options trading. The goal in 2017 is to reach $6,000 available dollars for options trading.

With that money available for trading, in January 2017, we generated $118.00 dollars income from options 4.26% return on invested capital.

This month, we traded options using stocks Ensco plc (ESV) and Energy Transfer Equity, L.P. (ETE).

The play is still under progress so I will be able to report it next month.

· Our dividend investing outlook

Recently, I have seen many dividend investors I follow selling their dividend stocks in expectation of the market imminent crash. They are afraid that valuations of the stocks are too high and not justified. But because the stock market is expensive doesn’t mean that it cannot become even more expensive. Currently, the stock market is trading at 21 P/E and historically, it is not any overly high number. We still may see the market going higher.

And as Keith McCullough, the CEO of Hedgeye.com, who was a bear for the last few years, says that “Investors who are positioned for a correction are positioned for a failure”. We must not forget that the US economy is indeed picking up and strengthening. The growth will be at some point catching up with the market. But not only that, it will push it higher.

We also have a few seasonal historical trends such as Dow hitting and moving above 20,000 mark. While many are scared of this event and see it as an Omen for the market, historically, Dow actually went up higher whenever it crossed its “thousands” level (also other markets will follow although it is said that S&P 500 will lag the Dow).

My expectations are a further gains of S&P 500. But even if the market fails to make new highs and corrects I will consider it a great opportunity. However, I strongly refuse predicting the market and liquidate my positions just because I may think that the market is expensive and may crash. It took me about 5 years when I finally realized what I wanted from my investments and build them to the level I have them now. Liquidating it now would be destroying all I have built so far.

For example, when I invested in JNJ for the first time ever, my yield was 2.50%. Today, after patiently sitting on my investment and reinvesting the dividends, my yield on cost is 5.28%. If I sell it all today, I will be starting again with 2.50% from scratch.

When I was learning about dividend growth stocks and dividend growth investing, one of the rules I learned was that you stay invested even if the market crashes because you will be reinvesting the dividends into a cheap stock. And stocks like JNJ actually raised dividends during 2008 selloff.

Here is a 20 year chart of JNJ. I left the price axis and time axis out of the chart. Can you guess which of the selling dip is the Great depression selling?

And now, imagine that we are invested in this portfolio for the next 20 years. That’s exactly the same time frame as in the chart. If the next 20 years would look similar, there is no reason to freak out about today’s prices you may consider too high.

Did you guess which sell off on the chart was 2008? Well, check it out here whether you were correct or not. And now tell me, why should you be selling when you are in for this time horizon?

Let me know what you think!

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Posted by Guest January 20, 2017
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12 Tips to Help Turn Your Company into an International Business

Turning to the international market is a great way to ramp up your company’s sales, but it does require a bit of hard work. While the Internet has made selling to people in other countries easier, a website alone won’t turn your company into a worldwide success. Use these tips to expand your company across the globe.

· Test Markets with Other Marketplaces

An easy way to test how well your product might do in other countries is to list it for sale through other companies that already have an international presence. For instance, Amazon, eBay, Rakuten, and Alibaba are all well-known around the world. With your products selling on these sites, you can start to identify which countries might have the best markets for your particular product.

· Research Other Countries

When you’ve identified a few potential markets, it’s time to do some research. Note whether the other countries have packaging laws that differ from England’s. Does your product contain ingredients that are banned in other countries? Are there similar products within that country or is your product unique? Knowing these details ensures that you don’t get yourself into legal hot water.

· Develop an International Business Plan

Business plans are essential for the success of any company. When you’re ready to go international, you need to modify your business plan to include this information. Having a solid plan can help you stay on track.

· Use a Payment Processor Designed for International Use

Dealing with payments in other currencies can be troublesome. Choose a payment processor that makes this easy for you, such as SEPA from Access Pay which helps those who are selling throughout Europe.

· Professionally Translate Your Website Content

While many people throughout the world speak English, a good business owner recognises that you can reach more people with translation. Google might be able to automatically translate your site, but if you’ve ever tried to translate a non-English site into English, you know how machine-based translation can backfire. Hire professional translators to get the job done.

· Localise Your Marketing

People in other countries don’t have the same needs as those in England. When translating your website and other marketing materials, change the message to better reflect the needs of the people in that area. Directing the right message to the right people is essential for success.

· Speak the Language

Aside from the website, you’ll need to have staff that can speak other languages in order to deal with customer service issues from other countries. Initially, you might be able to get by with on-call workers, but eventually you’ll want full-time staff.

· Network in Other Countries

Attend international networking events to meet business owners from other countries. These people can offer valuable insight into the market and may even want to collaborate with your business.

· Adjust Your Prices

Set your prices in different currencies. If you have your website automatically change currencies based on the viewer’s location, you can end up with awkward and fluctuating pricing structures. A person who’s considering a purchase might be frustrated by an increased price the day after doing his research, even if it’s only a slight increase.

· Plan for Shipping

Research options for shipping internationally. You need to factor the additional costs into the pricing. Once you start making more sales, you may be able to negotiate better pricing with the shipping company. If your product takes off, you may choose to have warehouses in other countries for easier shipping.

· Set Up an International Sales Team

As your product becomes more popular in other countries, you may want staff based out of those countries. Even if these people work from your office in England, it’s a good idea to have a team that’s dedicated to the international side of your business.

· Get Advice from Experienced Business Owners

It’s normal to feel out of your league when you’re expanding internationally. Get the help you need by speaking with others who are more knowledgeable than you. Look for a business mentor or get advice from the Business Support Hotline.

Many business owners dream of selling their products to people throughout the world, and it’s never been easier to accomplish this goal. However, the best way to find success it through proper planning.

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Posted by Martin January 09, 2017
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Top Four E-Commerce Business Top Four E-Commerce Businesses E-Commerce Businesses E-Commerce Business Top E-Commerce Businesses Top E-Commerce Business

The Top Four E-Commerce Businesses

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Investing in companies means watching the trends and understanding what’s hot – and what’s not. This is this is especially true of e-commerce. Here are four areas of online selling where you can make a killing.

· Tech and gadgets

In an increasingly digital and wireless world, people want to be connected to others and control of their surroundings. Consumers are investing in gadgets that help them do this more than ever before.

From wireless chargers to child locating GPS systems, to plugs and devices that can make a home more responsive, new tech and gadgets are a perfect e-commerce opportunity. Tech and gadget selling online retailers are great companies to invest in moving forward.

· Fashion boutiques

The seasonality of products keeps this type of business cycling upwards well. Steady growth for the best boutiques is linked to great customer service, generous return policies, trend-setting product choices, and attention to what’s hot in the market. Current trending items include everything from things like unisex wood sunglasses and wood watches to fashionable leggings for women and bow ties for men.

· B2B products and services

Retailers who target niche subsets of the e-commerce market, like other businesses, also do well online. Products like marketing and promotional materials are still strong sellers in the B2B marketplace and help leave a lasting impression with clients and potential customers.

While the gifted pen still reigns supreme, other online products include customizable uniforms, USB devices, writing pads, headphones, and other indispensable objects of the millennial generation. Basically, anything a customer can fit a logo on is fair game.

Additionally, products like training products, office supplies, and other business related products are able to capture a large portion of the online retail space.

· Health products

While there are plenty of trending health products, and lots of false and exaggerated claims, not all companies have seen steady growth in recent years. However, some of the highest-trending items in the last half decade have been things like macha power, coconut oil, and anything gluten-free or paleo.

Even “health” alternatives to cigarettes like e-cigarettes and liquid refills for these new devices. Forbes noted back in 2012 that the e-cigarette market was set to explode. While the sale of the actual devices has taken a downturn in the last year or so, trends for liquid refills are still as strong as ever.

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Posted by Martin January 06, 2017
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options trading

January 2017 goal

Plan Lately, I was reviewing our portfolio and analyzing what went wrong and why I no longer feel comfortable with it and with my trading.

It is something I struggle with – over trading.

So what I did wrong that put me out of my comfortable zone?

First, I set a wrong plan. I calculated that I could open one strangle contract every day as I misjudged the ability of my buying power to handle it. When I realized that it was wrong, it was too late.

Then I decided to stay in those trades as I wasn’t willing to take the loss. It still would be OK if I didn’t do my trade rolling the wrong way.

I rolled a trade (strangle) without waiting for the untouched side to close.

Today, when I have a strangle on, and one side gets touched, for example puts, I wait for the calls to get closed first. Once closed, then I roll the puts.

I haven’t done that this way.

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First, I treated all options structures as one trade through its life. For example, if I opened a jade lizard or strangle, I put a closing order on the entire structure. But if one side got in the money, the other side of the trade became worthless, but the trade didn’t close. I do not do this anymore. After I open a trade, I continue treating each trade as separate legs. It gives me a better flexibility to trade.

Second, once one leg of my options structure got in the money, out of fear of assignment I decided to roll that leg away and down (and out of the money) and I sold a new opposite leg against it to offset the cost. For example, if my puts got in the money, I rolled them away and sold new calls against it while I still held the old calls!

Without waiting for the old calls to get removed I started piling trades I didn’t want. The stock reversed rallied up hard and soon I had to roll the old calls and new calls higher. And to do so, I was selling new puts against it while I still had the old ones. I didn’t wait for the old to get rid off.

Can you see the flaw and a trap I got myself in?

Fortunately, I realized my mistake and started working on fixing the mess in our portfolio.

· January 2017 plan

My goal as a trader, for January 2017, will be to put the portfolio back on track with the allowed number of trades (a new calculation of allowed trades based on the risk and overall used and free buying power). This will be a long term goal as not all trades can be closed unless I start taking losses. And that is what I do not want. There fore we need to wait.

In the mean time, we have a few allowances in our buying power allowing us continued trading, we can trade additional trades to avoid staying idle. In January 2017 we will be reducing the number of additional allowed trades to 5 contracts (5 strangles) at a time (currently 6 contracts) as well as reducing the existing trades (existing 27 contracts – mostly strangles). New trades (contracts, strangles) can be added to the existing trades only if there is no impact on buying power (for example if we have 13 call contracts and 5 put contracts, adding 8 new put contracts is acceptable only if the new contracts will have no impact to the buying power).

This rule, however, reduces our trading ability making our trading more conservative (not in how aggressive the trade might be but how many of them we have open). For this reason, I do not expect to make $3,000 dollars premium income this month. I hope we will be able to make $1,500 dollars in January 2017.

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Posted by Martin January 04, 2017
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December trading results and year end review

December ended and we have a new year again. It was time to review our achievements and set new goals.

I cannot believe we are again at the beginning of a new year already. Really.

Many people considered 2016 year a dismal year. At least that’s what I have read on the internet so far. I considered 2016 successful to us and our trading business.

Although December itself wasn’t good for our trading, the entire year was.

Let me first announce a few changes as far as this blog goes.

· Future of Hello Suckers blog

I started this blog in 2008 to document my personal journey in investing and trading.It was a good journey, full of great successes and terrible, costly mistakes.

I started investing in 2006 but had no clue what to do.

I believed I could learn by doing. There is nothing wrong with that if you really learn and know what to learn.

That was the biggest issue. What to learn?

Starting this blog 2 years later was a big help as it showed me all the flaws of learning how to invest successfully. However, later I finally had my first “aha” moment when I started searching for similar bloggers writing about investing and trading.

At that time, there weren’t many. But I found a few who continued writing about dividend investing. Some no longer exist and no longer write. New emerged.

I would like to thank to all of them who continued writing about their own journey, their own achievements, and educating their readers. You definitely helped me to start a great investing and later trading business. So:

THANK YOU!

In 2012 I started trading options as addition to my dividend growth investing. It was a completely new path to me. I had to learn a lot. And once again I made many costly mistakes.

In 2014 I decided to start a business involved in security trading, our ZZ Capital Management company.

It was definitely an interesting endeavor but not easy. If you are involved in trading business you are on your own. No one will help you, no one will be willing to help you.

You will feel like having a leper whenever you ask for a business loan, tax help, or any business related help. When you reveal what business you are involved, one group of people turn away from you, some will think you must be rich and ask for enormous money to get paid for their help, or have no clue how to help you at all (for example my tax accountant who had no clue how to deal with my trading reports).

In December 2016 members of our company decided to officially transfer this blog to the company. So from now on this blog will serve as informational blog about our company, our company trading, trading education, and announcements. I will no longer be posting any personal achievements or personal investing.

This change will also have an impact on our reporting. It will no longer be done in the format I have been doing last year. We will write about our achievements and income to be transparent and establish a good track record for our followers and investors.

· Trading Group

We started a trading group on Facebook last year. The group is an online platform where we post our trades along with other traders/members. We have great members, great experienced traders in the group. Many are willing to teach others and help novice traders to learn trading options.

I am personally happy to see how this group evolved and progressed so far.

If you want to learn trading options and interact with us online I recommend you to join the group and follow our trades, ask questions, and learn.

· December 2016 trading results

Trading in December wasn’t good for us. We suffered some serious losses this month. We lost $5,339.38 dollars this month.

So what happened?

It was my favorite WYNN stock which hurt our business this month. This stock is not a stock for active trading if you do not have enough time to watch it actively.

We were already over-exposed to that stock and had too many open positions but it was all manageable. If I was there to manage the trade.

I had to leave for a meeting and in the meantime the stock crashed 10% in 15 minutes. And I wasn’t there! When I got back the damage was already done and we saw margin call on our account.

If I was sitting in front of the computer and saw the stock tumbling I could adjust my positions to avoid the damage. We had puts only against the stock. We could reverse them all into calls and be good. But I wasn’t there. I had to go on a meeting!

The toll was high. We lost more than $6,000 dollars ($6,964.00 to be exact). When you get a margin call you have no other option than close the trades – at a loss!

So we had to take a loss.

For the rest of the month we slightly adjusted our trading plan and worked on recovering our losses. The final bill was -$5,339.00 so we recovered $1,625.00 dollars this month.

However, this hiccup didn’t have a serious impact on our overall trading!

I am happy to announce that in 2016 we made $19,054.12 dollars trading options.

We took a loan from a company member who took a personal loan and then loaned the money to the company which we used for trading. We paid back $6,158.00 last year.

I think, this is a great result showing that our operations are sustainable and that we can make money to pay for our bills.

We are still building our company and it is still a financially fragile business but it is already working.

Our net profit for 2016 after all bills and losses is $12,229.00. Remember, we started this year with $1,500 dollars in our account. We borrowed some cash and finished with $12,229.00 profit.

When looking at reporting though, you may notice that our net-liq value is low (at around $3,000 dollars without a loan). It is a bit stretching but it is a result of our open trades mainly our WYNN trades which we still have adjusted and which are blocking a lot of money in our account.

In 2017 it will be our goal to get rid of those trades.

· Trading results publishing

We will no longer publish detailed reports about our trading as I did in the past year. We will write about our trading, we may mention our results, but all our results for the month and year will be visible in our section Trades & Income.

You will be able to visit that section at any time and see the most recent trading result such as:

– month-to-month trading income showing how much money we made in premiums per month

– account value and chart

– individual trades journal which you can use to review all our trades and eventually back test them.

Hope this change will simplify our work and make reviewing our trading results better and consistent. Reporting the way I was doing became so robust that it consumed a lot of time. We want to focus on trading and helping others to trade and not spending weekends writing lengthy reports.

I hope that you will like the new format and if you have any questions do not hesitate to contact us.

I wish you a Happy New Year!

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· ROTH IRA investing/trading strategy

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· ROTH IRA options income

· Our dividend investing outlook

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· Test Markets with Other Marketplaces

· Research Other Countries

· Develop an International Business Plan

· Use a Payment Processor Designed for International Use

· Professionally Translate Your Website Content

· Localise Your Marketing

· Speak the Language

· Network in Other Countries

· Adjust Your Prices

· Plan for Shipping

· Set Up an International Sales Team

· Get Advice from Experienced Business Owners

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· Fashion boutiques

· B2B products and services

· Health products

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· January 2017 plan

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