Saturday, February 3, 2018

Income & Expenses For January 2018

Since 2014, I have been tracking my monthly income and expenses. You can see a breakdown of every penny I earn and spend. For perspective, this budget is for a household of two in a small US city. By documenting my journey, I aim to demonstrate the feasibility of saving a significant portion of your income and provide some ideas and inspiration for your own budget.

Below are my income and expenses for January 2018. You can see all my monthly budgets here.

Options Update: January 2018

Welcome to my first monthly options update article!

Here, I shall write monthly options update articles to keep track of options trades in my portfolio. Each options update serves as a status report on the open options and the obligations I have. A running tally of all my options trades and income to date are found on the Options page.

Assigned Options

No options got assigned in January.

Expired Options

No options expired in January.

Closed Options

When an out of the money option goes further out of the money, one may close the option early and secure most of the options income.

I did not close any options early in January.

Rolled Options

An option can be rolled forward by buying back an option and selling another option with a later expiration date. Rolling is done to avoid options assignment for in the money options.

No open options were rolled forward In January.

New Calls Options Sold

Selling calls is a way to earn premiums from time decay on securities that are unlikely to reach a certain strike price within a certain time frame. This is best done on stocks you already own so as to limit liabilities should the underlying security shoot to the moon.

I sold 6 calls in January:

Trade #1: Sold call option on AN strike 65 exp 02/16/18 for $23.91 income after fees.
Trade #2: Sold call option on ATGE strike 50 exp 02/16/18 for $108.70 income after fees.
Trade #4: Sold 3 call option on SQQQ strike 21 exp 02/16/18 for $97.07 income after fees.
Trade #5: Sold call option on TZA strike 11 exp 03/16/18 for $72.90 income after fees.
Trade #6: Sold call option on EXC strike 40 exp 04/20/18 for $69.70 income after fees.
Trade #9: Sold call option on WMT strike 108 exp 02/23/18 for $84.90 income after fees.

New Put Options Sold

Selling put options is a way to earn premium for agreeing to buy a stock at a given price for a period of time. This is best done with high quality, buy & hold stocks that have limited downside.

I sold 5 puts in January:

Trade #3: Sold 3 put option on MAT strike 13 exp 02/23/18 for $118.07 income after fees.
Trade #7: Sold put option on AAP strike 90 exp 01/17/20 for $1,079.63 income after fees.
Trade #8: Sold put option on CELG strike 90 exp 09/21/18 for $359.20 income after fees.
Trade #10: Sold put option on HSIC strike 55 exp 07/20/18 for $74.75 income after fees.
Trade #11: Sold put option on AYI strike 120 exp 08/20/18 for $358.90 income after fees.

Options Expiring Next Month

The following options expire in February:

Trade #1: Sold call option on AN strike 65 exp 02/16/18 for $23.91 income after fees. -> Out the money with 12% margin of safety.
Trade #2: Sold call option on ATGE strike 50 exp 02/16/18 for $108.70 income after fees. -> Out the money with 9% margin of safety.
Trade #4: Sold 3 call option on SQQQ strike 21 exp 02/16/18 for $97.07 income after fees. -> Out the money with 14% margin of safety.
Trade #9: Sold call option on WMT strike 108 exp 02/23/18 for $84.90 income after fees. -> Out the money with 3% margin of safety.
Trade #3: Sold 3 put option on MAT strike 13 exp 02/23/18 for $118.07 income after fees. -> Out the money with 27% margin of safety.

I'll need to monitor a few of these options carefully in order to take the appropriate actions. In particular, the WMT covered call option is only 3% out of the money, and getting that assigned would incur me about $4135 capital gains. I might need to rollover this option.

Options Income Summary

January 2018
                                   Total                 Secured
                          Options Income Options Income
                                                           
This Month:           $ 2447.73                $   0.00
Last Month:           $       0.00                $   0.00
Difference:             $ 2447.73                $   0.00

Thanks for reading!

Thursday, February 1, 2018

Portfolio and Net Worth Update January 2018

The time has come for my monthly portfolio update. At the end of every month, I will update my portfolio and comment on any changes. I do that for accountability and also so you may glean some ideas on how I allocate my capital. You have the opportunity to learn from what I do well so you can do the same, as well as what I do poorly, so you will not have to repeat my mistakes.

Follow my real-time portfolio here. Below is a snapshot of my stocks and ETFs portfolio as of 1/31/18:

Wednesday, January 31, 2018

2 Recent Options Trades Adding $358.90 Income

Since my last options trades update, I made 2 recent trades adding $358.90 options income. Both were sales of put options of intermediate duration.

Here is an updated options trade tracker:

Wednesday, January 17, 2018

Thoughts on Options, and 9 Recent Trades

Image result for options
I have never been a big fan of options trades, but I changed my mind after reading blogs of fellow dividend bloggers such as Divgro. I now believe that selling, or writing, options can be a good way to supplement one's income, since much of the value of options derives from their time value, which decays over time to zero at expiration. As a quick overview, here are four possible trades with options:

Thursday, January 4, 2018

2017 Review and New Goals for 2018!

Image result for goals
2017 was another solid year for me in terms of attaining most of my financial goals, helped by a strong stock market performance and a good income. My total expenses in 2017 increased only slightly compared to 2016, while my savings rate remained well above 90% and dividend income grew significantly. I continued tilting toward lower dividend yield and higher growth to reduce my tax liability given my relatively high income. A summary of all my goals since inception of this blog can be found under my Goals tab.

2017 Goals Revisited
I set 5 goals at the beginning of 2017 to meet by end of the year. The first three are financial and the last two to help me stay current and maintain a sharp mind. All of these goals are specific, measurable, achievable, realistic, and time-based (SMART).

My Net Worth Update - End of 2017

My net worth increased from $883,575.44 to $1,174,539.92 from 12/31/16 to 12/31/17. In 2017, my net cash inflow (from active income less expenses) was $103,752.82. 

Organic growth = ($1,174,539.92 - $103,752.82) / $883,575.44 -1 = 21.19%.

Inorganic growth = $103,752.82 / $883,575.44 = 11.74%.

Total net worth growth = 21.19% + 11.74% = 32.93%.