Selling stock options, I earned nearly $3,000 in premium. I had my best monthly premium selling stock options to date in May. The average premium per trade was $183 and I had a total of sixteen trades for the month. The biggest surprise was that I was able to get out of deep water by rolling my ARKK trades.
Over the last three months I have been able to easily reach my goal of making $2,000 a month selling stock options. I was able to do fewer trades but more contracts per trade and in doing so increase my trade average. Back in April I setup a new journal with more details that helped me both identify trends and refine my trading strategy. The journal is easier to use and allows me to keep a lot more detail about each trade. Below you can see what it looks like. Also, I post my monthly spreadsheets and stocks of interest for all my patrons. Here is screenshot of the new workbook and my May trades.
I did come close to falling off a cliff with my weekly ARKK trades. I found myself deep in the money and the possibility of some big losses. I was able to roll the trades farther into the future at much lower strike prices. ARKK decreased from around $120 to below $100. I found myself over $15 below the strike price. I rolled them several times and now they are sitting at $107. Over the past two weeks ARKK has increased in value and now is around $118. As you can imagine I am no longer doing weekly trades in ARKK. I should be able to let them expire or close for a small loss.
Instead of ARKK I am now trying to pick up some Apple. I am trading it in a downward trend in the hope of picking it up around $115 or so. I have made some good premium selling vertical put credit spreads on Apple and was close to being able to own it. However, now it has started back up and is trading around $132. It might not come back to my range, but I did pickup some good premium. Still plan to keep an eye on Apple in the hope that it starts to trend down again.
I only did sixteen trades this month using only 8 stocks and one ETF. I only spent a total of 10 hours or so researching and making the trades. This translates to about $300 an hour. When you think of other types of gig work this is a really good rate. I could probably make a lot more money, but I want this to be as passive as possible. There are a lot of days I do not trade or even look at the market. However, I do keep an eye on it near expiration or ex dividend dates. You will notice that I have not filled in the Ex-Dividend dates on the spreadsheet. Last week I had DVY assigned on the Ex-Dividend date. If I had filled these in, I would have rolled or closed it. So going forward I am going to push myself and enter these dates.
Things I learned this month. You can make good money rolling positions. Some of my best premium has been the trades that I rolled. Part of this is because I am just trying to get more time and premium and a better strike price. Some strategies do not work well. My weekly ARKK strategy was not a good one and I am adjusting accordingly. Something else I learned that is a bit less obvious is that I might want to take more risk with some of the puts. This is especially true with securities that I would really like to own. I missed some good buying opportunities back in October of last year.
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Thanks, and happy investing!
Jim Adams