March Option Performance

This month I ended up realizing $1,464.44 in option premiums, but I spent $40.49 in commissions.  I let 7 positions expire worthless.  Gutsy, I know.  I closed 3 positions early.  

On average, I realize $725 per month from option premiums.  Even now with more margin and buying power from transferring my account from Virtual Brokers to Interactive Brokers, I am having a trader's block.  

Stocks are at all time highs and I don't want to over extend myself into this unpredictable market.  It's always better to be safer than to be sorry!  

My upcoming premiums for the months ahead are not that significant, but it is still cash flow coming in as I hope they will expire in my favour.

Here are my upcoming option premiums that are set to expire in their respective months:

APRIL	$659.25
MAY	$387.07
JUNE	$107.99
JULY	$584.93

Set to Expire: March 27th

Option	Position	Days Held
FB 27MAR2015 68.5 P	-1	16
MA 27MAR2015 83.5 P	-1	18
SBUX 27MAR2015 88.5 P	-1	18

I sold very out of the money (OTM) PUTS on FB, MA, SBUX two weeks ago and collected $85.63 in premiums after commissions.  I risked a total of $24,050.00 of buying power, but once the contracts expire worthless, my buying power will be replenished and I can do more option trading.

I am using the size of my portfolio to create income through options.  Taking advantage of the margin & buying power that I have in my non-registered account @ IB.  

Of course, there are risks involved.  But with calculated bets, I have generated income streams from selling puts and credit put spreads mostly.  I have also dabbled in buying calls and selling covered calls.  

I continue to learn and evolve as I pick up things from here and there. 

A lot of people would say: "Whoa, hold on there, you're risking $24,050.00 just to make $85.63?"

Yes, of course, there are risks involved when trading options.  Worst case scenario, I end up getting assigned if current market prices decide to fall to my strike prices.  I will just end up owning 100 shares of FB, MA & SBUX in which I don't mind really.  I know they're strong good companies that won't go belly up. 

Day before Expiration

Option Position

AAPL 20MAR2015 97.5 P-2

GOOGL 20MAR2015 495 P5

GOOGL 20MAR2015 500 P-5

TXRH 20MAR2015 35 P-1

V 20MAR2015 63.75 P20

V 20MAR2015 65 P-20

I'm not too worried about my top three options that are expiring on March 20, 2015.  I will let them expire worthless.  Yes, that's the term we option traders use.  

As for Visa, I want to close out my position for March 20, 2015 in case of a downside.  But Visa split 4:1 today.  Instead of having 5 contracts for my bull put spread, now I have 20 contracts.  This means my commission will be quadrupled and eat into my profits.  So I am going to let it ride out.  Really hoping V will stay above $65 per share by end of tomorrow.

If all goes according to plan, I stand to gain a net of $971.65 in realized profits.

Opportunity Calls, Grab It!

For the past month, Starbuck's share prices has been hoovering around in the low $90s.  I am bullish on Starbucks and wanted to get in on the action with an option CALL rather than my usual selling PUT for credits.  

Option CALLS are extremely volatile compared to option PUTS.  But if the stock rises to its occasion and you called it right, you can reap endless of profits.

I had some USD cash in my IB account, so I decided to make a calculated "bet" on $SBUX.  

PC‏@PC_Trades

BOUGHT 1 SBUX May15'15 92.5 CALL @ 3.3

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1:01 PM - 10 Mar 2015

The cost of my option CALL is $3.30 per contract.  Each contract has 100 shares, so I paid out $330.  The very next day, $SBUX went down and of course, the value of my call option dropped to $2.89 per contract.  Gulp, I was already down by $0.41 per contract => $41.00!!

Today, $SBUX rose to $93.38 per share.  Good news for my CALL, it also rose by $0.96!  So now, I'm up by $0.55 per contract => $55.00.  $55/$330 = 17% gain in two days.  Not bad eh?  But I'm greedy, I want more!  So I'm still holding... 

Patience is key in the world of options.  I have 64 days to ride this out.  

UPDATE:  My GTC order to close out my position was executed on March 18th, 2015.  I made $200 less commissions in 8 days.  I could have made more money, but I am happy to walk away with a profit.  Go $SBUX!

Showing Less in Public

Personal finance is indeed personal.  Perhaps, I was over sharing my detailed progress line by line.  No one really cares except for me.  It is my money to be made, not yours.

In my Progress Tab, I've taken off my detailed dividends, detailed option trades, detailed stock trades and detailed trading expenses.  Now it's just a summary of my monthly activity in my overall stock/option portfolio. 

I will still continue to live tweet my trades and talk about my option/stock trades.  But now, it leaves more to the imagination.  I won't lay it all out as before.

Anyways, I'm at full trading power at Interactive Brokers.  Time to really put the money to work.  

February Option Performance

February 2015 marks my sixth month anniversary since I opened my Interactive Brokers account (IB)!  So how am I doing thus far?  Well check out my results in the graph below:

This month, I ended up realizing $1,125.43 in option premiums, but I spent $81.21 in commissions!  Not bad for a side gig eh?  The fruits of my labour is starting to sprout in full force.

IB is my starter account to see how successful I would be at trading options. Month after month, I've been growing this account with limited funds.  I am quite surprised with my results.  A cumulative gain of 23.44% since inception!

Finally on February 24th, I decided to move my Virtual Brokers (VB) account over to IB.  Hopefully by early March, I'd be at full trading power.

Take that Dividend bloggers!  

Covered Calls on my Horizons

The more I dive into the world of options, the more I want to learn and grow as an option trader.  Finally, I deployed the $5000 cash sitting in my RRSP since early January 2015.  This is very unusual for me to just leave a significant amount of cash sitting in a trading account.  But I was stumped.  The markets are at all time highs and every time I pick a stock to buy, it goes down.  

Last Tuesday, I finally took a leap and bought NA.TO for 111 shares @ $48.10 in my Questrade RRSP account.  Unfortunately, I wasn't set up for option level two trading.  So I couldn't do a covered call (CC) for my newly bought shares right away.  

Once set up, I entered in my CC for Jan 2016 strike @ $50 looking to collect a $2.80 premium.  But my good till cancel (GTC) order was in queue and it didn't fill.  Of course, banks took a tumble for the next few days.  The premiums were getting lower and lower.  But I stood my ground, I didn't want to sell for less than $2.80.

Today, NA.TO jumped back up to my buy in price once again and my CC order got filled.  Patience is key.  Set your limits and play within it.  Haha, I know I'm stealing the casino slogan sort to speak.

I am quite attached to my stocks.  The reason why I never sold covered calls is that I don't want to lose my shares and option commissions in QT ain't cheap.  But I am starting to realize that I need to be less emotional and try to milk as much as I can from my stocks.  

For years, I've been holding a few hundred shares of BMO.TO and IPL.TO in my QT RSSP just DRIPing and collecting dividends.  I think it's time for me to deploy some CC on them to generate more income!  But I would hate to get them assigned though.  To be continued...