Options Trading Income Report – August 2014

By September 9, 2014Trading Income Report
168.44
Monthly Income Generated
9
Annual Return

It seems like I just put up an income report yesterday…oh wait, I did!

Okay, maybe it was last week or so, but I’m finally starting to catch up with everything! August was an interesting month and I’ve changed up my account a little.

My wife and I decided to close out one of our other investments and move some of the money over to our options account. I moved $8,000 into my trading account which will allow me to do a few things:

1) Make more trades

2) Give me room to roll trades with excess capital (a lesson learned from my time with CLF)

3) Allow me to try multiple strategies at once

One of the things you’ll notice is my adjusted CLF share price bounced way up from last month. The deal here is I closed out my “protective put” for a loss. Should’ve held on to it longer, but I paid attention to emotion instead of the information and closed it out early.

Closing it out early destroyed a ton of time value I had in the option and erased any chance for it to “correct”…which it would have done in the end of August and into September.

Bummer…lesson learned.

I think I need to come up with a better way to display my income reports, because I don’t think the info below is capturing it in an easy to understand format. Take a look at the second format below and let me know what you think.

Account

August Net Income:  $168.44

Total 2014 Income:  $441.79

Adjusted CLF Share Price:  $ 22.80

Trades

Transaction Option Quantity Fill Price Commission Fees Net Amount
STC CLF Oct 14 18.00 Put 2 2.00 5.00 .09 $394.91
BTC CLF Aug 14 16.00 Call 2 $ 1.40 $ 5.00 $ 0.07 $ (285.07)
STO CLF Sep 14 19.00 Call 2 $ 0.42 $ 5.00 $ 0.09 $ 78.91
BTO CLF 22 Aug 14 (W) 18.00 Put 1 $ 0.58 $ 5.00 $ 0.03 $ (63.03)
STC CLF 22 Aug 14 (W) 18.00 Put 1 $ 0.71 $ 5.00 $ 0.05 $ 65.95
BTC CLF Sep 14 19.00 Call 2 $ 0.17 $ 5.00 $ 0.07 $(39.07)

 

Strategy Underlying Option Entry Price Exit Price Commission $ Gain/Loss % Gain/Loss # Contracts
Covered Call CLF Sep 14 17.50 Call $0.2 $0.07 $10.16 $15.84 65% 2

 

What’s Next

I’ll continue to sell CLF covered calls until I can get rid of the stock. The lesson I’m learning with CLF is to really understand the underlying security much better before I take assignment on it. I should’ve just rolled the option out and not taken assignment.

Oh well! You can learn from my mistake!

I’m also going to explore covered calls with some very “quiet” stocks. My first target is AT&T (Symbol: T).

Covered calls are considered a very basic strategy, but some online experts reports some pretty significant results from them, so I’ll put them to the test!

Over the next few months, I’ll take a look at one of the Internet’s experts execution of the covered call strategy. I’ll examine all aspects of the program and pay for the “premium membership” and give you a run down on what your return on investment in the program is.

Keep your eyes peeled for the announcement and see how well the strategy compares to the investment required!

Happy trading!

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