Options Trades Roundup

Processed with VSCOcamAs I am still at the beginning of my options trading career I will keep the Options posts less systematic than they should be, there is still a lot to learn and much to be considered before I can say that I got my hang on things.

Still another month has passed and I am getting deeper into this venture, waiting for “bad times” to strike but also hoping that I will do something right too!

As the markets are pretty high my put sell strategy is not really getting the high returns that it was getting right after Brexit, but this is normal.

So far I am trying to place calls at prices that are either my exact average price in the PF or below the average price. This means very small returns sometimes or longer expiry dates.

Locking capital for longer expiry dates is actually not that great because it forces me to cover the put (this is one of the rules, I must have my puts and calls covered at all time), this is the first lesson learnt: Long Puts only if it’s really really worth it, or strategically sound.

If all calculations are correct in July this is a good roundup of my option trades:

Average Expiration: 57 Days

Total Income: 511.43 Euro

Annualised Return: 6.17%

I think that from now on I will have to start getting my hands “dirty”, actually getting stocks assigned to quickly sell calls close to expiration if I am lucky enough in a small increase in price, so far the options that I have put/called were “relatively” safe and distant from being actually called.

We’ll see where we will get to, what is sure is that under this new options system I have to reassess some of the holdings of my PF. As some stocks that were “less core” increased in price substantially, I cannot place neither puts or calls on them, so I am getting into the idea of selling the positions and either consolidate some core stocks to reach the minimum tradable or simply buy back on a dip a smaller number of companies. In the next few days this is something I need to get my head around…

 

 

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6 thoughts on “Options Trades Roundup

  1. Stal,

    I would be interested to learn more about options. However I do not understand how they work, so its a bit of a mystery. Any possibility of a basic step-by-step guide on how you and/or the average small investor might go about the process and how it could complement the income investment strategy?

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  2. Ciao DIY,

    Well actually… I could get my head around it, it’s not like I am sending a missile to space or anything… But I am not so experienced so it might actually be very boring and basic. But I like the idea, I’ll get around writing something, then I will post the links that ATL gave me some time ago that I used to make further research!
    Thanks for posting as usual! 🙂

    Ciao ciao

    Stal

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  3. Well done Stal! 511€ is a nice income from options! Keep learning.

    Me too, I have a hard time to find puts to write. I focus on some dividend stocks I would like to own. Belgian tax laws limit my freedom here. And I have some preferred etfs.

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  4. Ciao ATL,
    Thanks for stopping by! Well, it’s also thanks to you that I am trading Options 🙂 Yes we are still in the learning phase I guess, and wanting to keep things “safe” means a lot of trades are not actually taking place and and returns sometimes are rather small, but I am not complaining.
    ciao ciao
    Stal

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  5. Ciao ATL,
    Absolutely agree, since I wrote the post I managed to get an option assigned and to loose 160 euro on a crappy trade (will write more in a later post)… It’s a very tricky business, options… Care to elaborate on the need of trading at all time highs and low IV?

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