July 2017 Options Trading Update

Options Trading

All that cycling is nice, but it’s a killer from a time perspective (+8 hours this week so far)! Struggling to find the time to sit down and go through all the options I’ve traded in the last weeks. But got it done! So here is the July 2017 Options Trading Update.

July 2017 Options Trading Update

The options trading income for July was, ahum, -€170,00. Oops…It was from both call and put options. The reason for this negative options trading report is because I had to roll various options to a later date and/or different strike price. They were all in the money and share prices had moved “too” much to let them expire.

I had a discussion with Amber Tree Leaves as how to report, he reports once the option is finally expired/closed, even when rolling a few times. I decided to report once an option is closed (or expired) at every trade, even as part of rolling an option. Gives me a better insight in what happens, but it does cause more fluctuations in update reports.

July 2017 Options Trading Update

July 2017 Options Trading Update

Below an option trading overview for 2017 is provided with the monthly and total YTD incomes. So far the options trading generated a total of €279.25. So we are still in the black and with the potential to make more premiums, but not until later this year…..

Monthly Options Trading Income

Monthly Options Trading Income

Experiences and Notes

Based on the last 4 months I’ve learned the following:

  • I suck at this! Primarily because I do not stick to my own rules. I have an (unstoppable) tendency to try to time the market, which sometimes works but most often not;
  • Options are however great instruments to increase your yield, when you are disciplined;
  • I really need to switch trading platforms if I want to be successful in the longer term (need broader selection of dividend shares to write option on); and,
  • I’m inclined to (temporarily) stop options trading as soon as we have found more Real Estate. I’ve noticed that I focus too much on market movements, which is not possible with Real Estate. In short, mentally RE takes less effort and results in less “stress” (for lack of better words).

Options Trading Forecast

There is a good chance that August and September will be (much) more profitable again. Especially for September we have several trades that are doing well, but the market could change in a heart beat. I think for the foreseeable future it’s not a bad idea to load up on more call options, rather than put options. Problem is that we have quite a few put options right now, for which I’m afraid I will have to roll (again).

Another thing we have to do is develop an exit strategy for options trading if we would find a new Real Estate opportunity, within the next few months. For what we are planning now (looking at a condo we can purchase in cash), we will pretty much need to liquidate all our Dutch investment accounts.

 

How did you do on the options trading front in July?

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14 comments

  1. After following your updates for a while (and those of others), I know now that options aren’t for me!
    Options looks like a proper way to receive some additional income, but you really have to be disciplined and know your stuff.

    Don’t think you doing that bad though. Learning from earlier experience is key for future improvements!

    1. Well said! As long as I get ahead with this investment opportunity, I’m ok with it. It’s been fun and interesting, but I doubt whether this is a long term thing for us.

  2. It’s hard sticking to rules and strategy when you see an opportunity. Options do take more knowledge and skill but it can be profitable if done correctly. I am not very good at it at all so I’ll just stick to DGI. You aren’t doing bad at all for “sucking” at it haha.

    1. Thinking you see an opportunity unfortunately does not always equals an real opportunity. Lots to learn! But you are right, could be worse.

  3. Getting to understand your mindset and fit or no for with an investment style is key. As sloth says, maybe it is not for you, in the way that real estate is not for me.
    When you think you need the cash and get rid of the calls, it might be good to close trades when you have the opportunity. Even if that is only a small profit.
    After my greed month, I increased my mechanical mindset and derisked a little bit, at the cost of profit. Staying I. The game is more important for me.

    1. I do enjoy the game to a degree, but we really would like to expand the RE side of things. Once that is done, I can continue to build up some cash buffer and start options trading again. But we don’t have a good RE possibility right now, so will continue the options trading until we do.

  4. Very true words: “Options are however great instruments to increase your yield, when you are disciplined”. So stick to your approach!
    July was great for me. August (and September) will be the great deleverage for me. So no more options for a while. Finally a chance to be lazy again!
    But you have to roll with the punches, not every month or trade is going to be a slam dunk.
    I do have the impression that you are first and foremost a real estate guy. And that discipline comes a lot easier in that field. It’s different for everybody, I am crazy disciplined with my investments, not so much with eating fat and sweets, sigh ….

    1. Besides RE, I also really like dividend shares. Its the Mrs. that prefers the RE That being said, I like to try the majority of the common investment methods to know find out if I like it. If I could just stick to my own rules, life would be much better….

  5. I got the feeling that people have a tendancy to hide failures at trading and they want to give the impression that they are experts.

    But… if they are experts, how did they get there?

    It’s nice to read about your experiences since experiences will lead to more expertise in the end. So maybe you should change your first note: “I suck at this but I am learning my lessons to improve”!

    Thanks for your honesty!

    1. Hey Mariimma,
      I’m far from perfect, but I do keep trying 😉 I certainly learned some lessons, but still need to implement them. Not really good at the latter at the moment…..

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