Options Trading Income Report – September 2016

September 2016 Income Report
161.64
Total September Income
1039.26
Total 2016 Net Income

Breaking $1,000 in profit

Whoop!

This was a busy month, but i’m extremely excited to announce I broke through a milestone by hitting $1,000 in profit for the year. If you’ve followed my progress over the year it’s night and day different from my previous two years of trading.

In 2016, I’ve accumulated small win after small win to build up to this. This $1,000 milestone represents ~30% return on my options trading account for the year, or about 14% overall for my options and dividend account.

This was a busy month (for me) in trading. I closed out six trades to capture just over $150 in credit, or about $25/trade.

I know this doesn’t sound like a lot, but when you consider I’m averaging about $23 in profit per trade it’s on par with the rest of my trades for the year and I love it. Every time I hit the “Confirm and send” button on a trade it’s like my computer prints me a $20 dollar bill…awesome!

Okay, celebration time is over…let’s dive into my trades this month.

I FINALLY got assigned shares on one of my trades. I know you’re thinking, “I thought the point was to NOT get assigned shares.” I sold ATM put options for about the last 2-3 months now with the goal of getting assigned shares so I can see how well the “Wheel of Fortune” concept works out.

The idea of the “Wheel of Fortune” (not my name for it) is to sell ATM or near the money puts until assignment and then to sell calls to get back out of the stock at or above your cost basis.

This sounds simple in practice, but this is what got me into trouble with CLF in the first place many years ago. Why is it different this time? Because CLF is a sub $10 stock. My working idea focuses on stocks valued less than $10 because they have less room to fall.

This does a couple of things for me. It lowers my total amount risked in a trade and gives me a tighter range to sell puts/calls in since these stocks tend to stay within a $2-$3 range. I’ll write out a more thorough explanation soon, I promise!

The other thing you’ll notice this month is my STR stock was sold for a slight loss. When I purchased this stock the company, Questar, was in merger talks and the merger finally went through.

Since I received a few dividend payments on it, this trade just treaded water without really closing for a noticeable gain or loss. So, I’ll put the freed up buying power to use in October either purchasing a new dividend stock or buying additional shares of one I currently own.

In other developments, I started another test and opened an account at Lendingclub.com. This is something I’ve looked into a bit and wanted to give it a try. If you’re not familiar with Lending Club, it’s a company which facilitates peer-to-peer lending.

So far I’ve only invested $100 just to try it out and see what happens. This month I received $2.28 in payments and interest on my loans. This makes me interested in seeing what the total return will be at the end of the year. If it continues on this trajectory I should get about $27 back on the $100 invested which seems too good to be true, so I’m a little leery about it.

I hope your trading is going well and I’d love to hear from y’all. Feel free to drop me an email at nakedoptiontrader@gmail.com, leave a comment on the site or catch me on Twitter @optionstudent.

Until next month!

Happy Trading,

Patrick

Account
September Option Trading Income: $150.11

September Dividend Income: $12.57

September Stock Trade Income: -$3.32

September Lending Club Income: $2.28

Total September Income:  $161.64

Total 2016 Net Income:  $1,039.26

Current Dividend Stock/ETFs Holdings

Symbol # Shares Quarterly/Monthly Dividend Per Share Annual Dividend Per Share Cost Basis Yield Pay Month
ADM 10.069 $.30 $1.20 $37.10 3.23% C
HCP 10.145 $.575 $2.30 $27.28 8.43% B
JNK 10.052 $.183 $2.20 $33.95 6.68% M
VLO 10.087 $.60 $2.40 $52.47 4.59% C

A = (Jan/Apr/Jul/Oct)  B = (Feb/May/Aug/Nov)  C = (Mar/Jun/Sep/Dec)  M = Monthly

September Dividend Payments

Stock/ETF Total Dividend Paid
ADM $3.00
VLO $4.80
STR $2.91
JNK $1.86

September’s Stock Trades

Stock # Shares Entry Price Exit Price Commission Net Profit
STR 10.088 $25.33 $25.00 $0 -$3.32

September’s Option Trades

Strategy Stock/ETF Option Entry Price Exit Price Commission Net Profit % Gain/Loss # Lots
P CLF Sept 16 $7 Put $.42 $0 -$16.54 $25.46 100% 1
P LC Oct 16 $5.5 Put $.50 $.22 -$3.07 $24.93 56% 1
P CHK Oct 16 $6 Put $.57 $.21 -$3.07 $32.93 63.16% 1
P RIG Oct 16 $9 Put $.39 $.17 -$3.07 $18.93 56.41% 1
P MT Oct 16 $6 Put $.45 $.24 -$3.07 $17.93 46.67% 1
P CLF Oct 16 $5.5 Put $.42 $.18 -$3.07 $29.93 57.14% 1

CC = Covered Call  P = Sold Put  SP = Spread  -Rx = Roll #X from previous trade