Volatility in markets continue
Not a bad month but because February is kind of short I was not able to make too much.
I mostly sell put and call spreads being fairly conservative with my Deltas and $2045 represents about 0.5% of my portfolio size.
About half of this month’s profit or $1,046 comes from the net credit I’ve earned through my Alphabet options challenge.
I’ve recently sold some stock in order to free up some margin space.
With economic conditions getting worse I think there may be another leg down in the stock market in the next few months.
By selling some shares and paying back some margin debt I am able to use more buying power for short term option trades.
It also creates a buffer so my margin requirement remains healthy in case stocks drop a lot more. 🙂
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Random Useless Fact:
The hottest something can get in a microwave is 100°C or the boiling point of water.
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Congrats, I think any profit in the current market is great. I sell a bit of options myself and I have gotten frustrated with tech stocks. The short term value of these stock is hard to evaluate and a correction is constantly just around the corner. While volatility is great for premiums, it wrecks your maintenance margin when you get caught in a downturn. For this reason, I started focusing on ”boring” dividend paying Canadian companies. ( TRP, CM, BNS… ) With the current volatility you get a decent premium on a lower priced stock. With TRP right now, if you get assigned you get a 7% yield on top. Its even sweeter if you get assigned just before the ex dividend date.
I am also curious, have you ever looked into closed end funds or split funds (EIT.UN, DFN, SBC )? I don’t know what your return is selling options but the yield on these funds range from 9% to 15%. It could generate passive income that is structured as dividends, capital gains or return of capital.
I’ve looked at some of the Brompton funds before. They seem like a good alternative to writing options for people who want high yielding passive income. 🙂
There’s not much capital appreciation to them however, and as a long term investor I don’t want to cap my upside so I don’t invest in any of those for now. But maybe I will take another look if I don’t want to actively trade in the future.
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Hello,
What happened to your March and April Options update?
I’m guessing options either turned sour or you’ve been very busy, as this was the most recent options update?