Since approximately April/May 2016 the majority of DRIPs in my primary portfolio were ceased. I was starting to get close to buy a property and needed the cashflow. While the property deal did not go through it has been uncertain whether another opportunity would open up. As such DRIP Report is on hold.
Certain DRIPs will remain such as those in my secondary portfolio and the Registered accounts TFSA/RRSP.
Currently:
CAR.UN 2% DRIP discount makes this worthwhile. Although rate hike fears and Canadian mortgage changes adds some uncertainty to it and similar REITs.
GWO letting it ride. Eventually, I add it to the 1K club via Secured Put or straight equity buy.
ENB.PR.T deep underwater on this one. I'll keep adding it to average down, income, and eventually in the unknown future it may be redeemed by Enbridge.
BCE.PR.H deep underwater on this one. Same reasons as above, but a rate increase could benefit the Prime Rate.
YRI on DRIP, but barely makes enough to purchase a share.
G on DRIP, but doesn't make enough to purchase a share.
AP.UN on DRIP, but does not make enough to purchase a share.
IIP.UN 4% DRIP discount makes this worthwhile. Same issue with rate hike fears and Canadian mortgage changes.
BBD.PR.B deep underwater. Same reasons as BCE.PR.H.
FIE letting it ride.
DIV 3% DRIP discount, but my secondary portfolio is within a brokerage that does not provide the discount. Deep underwater.
GRC a write off at this point. Continuing the DRIP to average down.
AXY new addition.
TWM new addition.
MTL new addition. doesn't make enough to purchase a share.
HSE Dividend continues to be suspended.
Showing posts with label Writing Secured Put. Show all posts
Showing posts with label Writing Secured Put. Show all posts
Sunday, October 9, 2016
Sunday, January 17, 2016
Psychological Threshold: Portfolio Turning Red (Mid-January 2016)
Well, it's been a bumpy ride, but it isn't the worst that things could get. These last few months have been marked by volatile and declining markets, which have given me reason to slightly pause from my current path. However, since New Years the declines have accelerated and this past week of January 11, 2016 marked a turning point: my primary non-registered portfolio crossed over into the Red.
Leading up to the New Year my portfolio was in the green $10,000 then declined further as we crossed into 2016. By January 11 all the paper gains evaporated and on that first day it seemed fine with an overall ~-$100 loss. As the week wore on it accelerated and has now closed -$5,160.79. My other portfolios were already in the Red for some time, so they have not been of any surprise.
What does this mean? Having gone through superficially the Internet/Dotcom bubble and the 2007-2009 "Financial Crisis" there is a certain amount of fear in my mind of the potential declines. My portfolio and strategies have evolved since that time, but so has my experience. I discovered long ago that trading and timing is definitely not my forte so the route of passive income and growth was how I geared my portfolios. Hence, I've created my DRIP'd Report and 50K Report in order to keep track of my income goals and to stay on track.
A couple factor have added to some uncertainty; my extreme home bias and the declining CAD$. Both of which I will need to fix, although it is late in the game and buying USD at these low CAD rates is definitely not preferable.
Looking forward, I am absolutely expecting a lot more pain in the markets as it feels the declines within the peripheries of the global economy have crept deeper in the core areas. This Wednesday January 20, 2016 will be another Bank of Canada "Interest Rate announcement and release of Monetary Policy Report", it is expected that we move towards another rate cut. The BoC also noted they have in their back pocket the ability to do Quantitative Easing and Negative Interest rates. In their back pocket for extreme circumstances and regardless of whether they will pull those tools out; they are now in the back of our minds.
Leading up to the New Year my portfolio was in the green $10,000 then declined further as we crossed into 2016. By January 11 all the paper gains evaporated and on that first day it seemed fine with an overall ~-$100 loss. As the week wore on it accelerated and has now closed -$5,160.79. My other portfolios were already in the Red for some time, so they have not been of any surprise.
What does this mean? Having gone through superficially the Internet/Dotcom bubble and the 2007-2009 "Financial Crisis" there is a certain amount of fear in my mind of the potential declines. My portfolio and strategies have evolved since that time, but so has my experience. I discovered long ago that trading and timing is definitely not my forte so the route of passive income and growth was how I geared my portfolios. Hence, I've created my DRIP'd Report and 50K Report in order to keep track of my income goals and to stay on track.
A couple factor have added to some uncertainty; my extreme home bias and the declining CAD$. Both of which I will need to fix, although it is late in the game and buying USD at these low CAD rates is definitely not preferable.
Looking forward, I am absolutely expecting a lot more pain in the markets as it feels the declines within the peripheries of the global economy have crept deeper in the core areas. This Wednesday January 20, 2016 will be another Bank of Canada "Interest Rate announcement and release of Monetary Policy Report", it is expected that we move towards another rate cut. The BoC also noted they have in their back pocket the ability to do Quantitative Easing and Negative Interest rates. In their back pocket for extreme circumstances and regardless of whether they will pull those tools out; they are now in the back of our minds.
Friday, January 1, 2016
$10/day for $3,600! Option Writing Challenge: Failed.
Back around January 2015 when I first started using Option Writing; my friend spoke about wanting to earn an extra $10 per day or more simply: $3,600 a year. Based on my (at that time) successful Option Writing I told my friend it was entirely possibly to achieve this goal.
Calculation
$10 x ~30 days x 12 months = $3,600.
$3,600 per year additional income / 12 months = $300 per month.
Options Closed
Number of Traded: 57
Losses: -$311.41
Number of Trades: 131
Trade Commission: $1,615.04
Options Expired
Number of Traded: 9
Gains: $592.25
Number of Trades: 10
Trade Commission: $133.75
Totals
Total Number of Traded: 66
Total Gains: $280.84
Total Number of Trades: 141
Total Trade Commission: $1,748.79
Total Revenues: $2,029.63
*Not including FX conversions and Option Assignments.
Surprisingly, coming out of 2016, despite some massive losses, I eked out out a gain of $280.84. Breaking it down further that turned out to be $0.7694/day or ~$23.4033/month.
Tallying up the commissions for the 141 trades, shows that the cost of making $280.84 was astronomical, hitting $1,748.79 or 622.6997% of the year's gains.
Despite my goal of using Options to earn money and to generate lower average purchase costs for stocks I want to own; a lot of the resulting trades was the result of inexperience:
One might think that it was not worth the time and worry that I put into using this new strategy in my toolbox, but it really showed me the potential of being more active and from writing Options. This coming year I definitely want to continue Option Writing, but hopefully can put to use my 2015 experiences to be more careful with my targets; focus more on what I currently have in holdings; and be more patient. In addition to Option Writing, I want to get back into the buy side and work on using other Option Strategies.
*Not including FX conversions and Option Assignments.
Surprisingly, coming out of 2016, despite some massive losses, I eked out out a gain of $280.84. Breaking it down further that turned out to be $0.7694/day or ~$23.4033/month.
Tallying up the commissions for the 141 trades, shows that the cost of making $280.84 was astronomical, hitting $1,748.79 or 622.6997% of the year's gains.
Despite my goal of using Options to earn money and to generate lower average purchase costs for stocks I want to own; a lot of the resulting trades was the result of inexperience:
- Making dumb moves from writing and lucking out on expiry or short term turn around for Stocks that I ended up not being that certain or keep on holding for the long term.
- Over-extending myself and writing too many options at once. This resulted in me needing to take opportunities pull back.
- General market uncertainty; causing me to want to reduce exposure.
- Impatience with waiting for the Expiry Date for Assignment or Option Expiry.
One might think that it was not worth the time and worry that I put into using this new strategy in my toolbox, but it really showed me the potential of being more active and from writing Options. This coming year I definitely want to continue Option Writing, but hopefully can put to use my 2015 experiences to be more careful with my targets; focus more on what I currently have in holdings; and be more patient. In addition to Option Writing, I want to get back into the buy side and work on using other Option Strategies.
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