Monday, September 24, 2018

Options expiration on September 21, 2018 claimed one of the stocks in the 2018 Covered Call Portfolio.   Qualcomm, symbol QCOM, was "called away" also known as assigned.  I am very happy with the income produced from this little portfolio but as with all covered call strategies, when your underlying stock is called away, you have to find another stock in which to invest.

In addition to QCOM being called away, Gilead's call expired.  I sold another call on Gilead today.  This call is presented in the table below.  And, I have posted the updated 2018 Covered Call Portfolio as well.

GILEAD - December $82.50 call















Options expiration is always a challenging time for income investors.  Usually 90% of options expire but this time I had 20% of my calls exercised.  That means I have to move some money into another income instrument.

I like value and am intrigued with Las Vegas Sands, symbol LVS. At a close to a 52 week low, LVS and sporting a yield north of 4.5%, it is worth a close look.

2018 COVERED CALL PORTFOLIO

Last week I did add Novocure, symbol NVCR.  This stock has no dividend so be ware.  However, I like a lot of what the company has to offer and will write up more about NVCR later.





I am not selling any stocks in this portfolio.  That "dog" RIOT is still there.  I do create cash from calls that are assigned.   Currently I have about $30,000 to invest.   The point of this little portfolio is income so I will not be buying a CD (certificate of deposit) with this money.

Stay tuned.   The next 10 years of this blog will be a little different.  But we can always measure how the $750,000 invested since 2011 has done.

M* MoneyMadam

Disclosure:   Long all positions/short all calls








Saturday, August 25, 2018

Gone Fishin"

I will return after Labor Day.

M* MoneyMadam

Thursday, August 23, 2018

2018 Call Portfolio Update

Updated 8/23/2018

Last Friday was call expiration for the August 17, 2018 options.  We sold a second call on Apple (AAPL) and it was called away early at $200.   We did quite nicely on AAPL having bought a $176.98.   Income from call premiums and dividends alone equaled $739 which is an over 4% yield in 8 months.   Add to that the capital gain of just over $2,300.

There will be more than one investor who will point out lost opportunity.  By simply holding AAPL the additional gain the call buyer experiences is another $1,600 dollars that I will not realize.

My argument is that I invest for income and you never know when this long term bull market will turn on you.  I have my money in the bank and that is good enough for me.

The table below lists trades made to date.  With the AAPL call being assigned, we have $20,000 to invest.   I have a few ideas and will post them when I execute the trades.

I am liking the 11.22% yield to date.   My internal hurdle is no less than 5%.   I don't intend to use my principle for living expenses.   Since I don't work, I need my investments to create no less than 5% to fund my family's lifestyle.


2018 COVERED CALLS

  Invested Capital    
Realized
Capital Gain
Div & Call Income
Yield on Invested Capital
 
  $68,222.00     $2,302.00 $5,352.00
11.22%
 
               
  SYMBOL Number of Contracts Expiration BASIS Bought Date SHARES INCOME  
               
               
  QCOM Bot $64.87 1/2/2018 100 Open  
  Contracts 1 Strike Premium Div Expired  
  Expiration 3/16/2018 $70.00 $1.25 2/27/2018               $125.00  
          $0.50 $50.00  
          5/27/2018    
          $0.50 $50.00  
    Added 100 Shs $54.00 4/4/2018 100    
  Contracts 2 Strike Premium Div Expired  
  Expiration 6/15/2018 $60.00 $1.31 5/29/2018               $262.00  
          $0.62 $124.00  
  Contracts 2 Strike Premium Div Open  
  Expiration 9/21/2018 $65.00 $1.21 8/27/2018               $242.00  
          $0.62 $124.00  
               
  NUE   $66.60 1/3/2018 400 OPEN  
  Contracts 4 Strike Premium Div Expired  
  Expiration 2/16/2018 $70.00 $1.35 After Expir. $540.00  
          $0.00    
  Contracts 4 Strike Premium Div Expired  
  Expiration 4/20/2018 $72.50 $1.05 3/28/2018    
          $0.38 $572.00  
  Contracts 4 Strike Premium Div Expired  
  Expiration 7/20/2018 $67.50 $1.00 6/28/2018    
          $0.38 $552.00  
  Contracts 4 Strike Premium Div OPEN  
  Expiration 10/19/2018 $75.00 $1.00 9/28/2018 $552.00  
          $0.38    
               
  RIOT   $21.08 1/11/2018 200 Expired  
  Contracts 2 Strike Premium Div    
  Expiration 2/16/2018 $22.00 $2.25 No Div               $450.00  
  Contracts 2     No Div Expired   
  Expiration 6/15/2018 $12.00 $1.00 $0.00 $200.00  
               
  AAPL   $176.98 1/22/2018 100 Assigned  
  Contracts 1 Strike Premium Div Expired  
  Expiration 4/20/2018 $195.00 $2.20 2/4/2018               $220.00  
          $0.63 $63.00  
  Contracts  1 Strike Premium Div Assigned Early 8/10/2018  
  Expiration 8/17/2018 $200.00 $3.10 5/11 & 8/10 2018 $310.00  
          $1.46 $146.00  
               
  TWTR   $25.91 2/5/2019 200 Assigned  
  Contracts 2 Strike Premium Div               $218.00  
  Expiration 2/9/2018 No Div  
      $27.00 $1.15 $0.00 $230.00  
               
  GILD   $79.99 3/8/2018 100 OPEN  
  Contracts 1 Strike Premium Div Expired  
  Expiration 5/18/2018 $87.50 $1.10 3/15/2018               $110.00  
          $0.57                 $57.00  
          6/14/2018    
          $0.57 $57.00  
  Contracts 1 Strike Premium Div Open  
  Expiration 9/21/2018 $80.00 $0.98 9/14/2018                 $98.00  
          $0.57    
               


Another important fact is total return.  Right now due to the rogue trade on RIOT and the weakness of NUE, we have a paper loss of about $1,600 or 2.39%.    If you are an income investor, you have to be immune to these paper losses.  I will not sell at a loss.  I will hold these securities and continue cash the dividends and sell calls until an individual holding is assigned.

Interesting experiment.

M*  MoneyMadam
Long all positions noted with calls as noted