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BookingAlpha Option Trading Advisory

Thursday, May 16, 2019

Enhanced Investing - April 2019 Results

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April ended up bringing a $535.96 realized gain for the account after commissions ($25,000 account at Tastyworks, with 2:1 margin). A total of 18 short Puts were closed, all of them at a profit.

Year to date, we have closed 72 Short Put positions. 71 winners vs 1 loser. The total realized gain made in the year is now +$2,160.27. This represents a +8.6% growth for the first 4 months of 2019. At that same pace, a +25.9% return would be achieved strictly from selling Puts.
Of course, the market is up much more than 8.6% Year to Date. It is expected that a short Put strategy will make less money in periods of strong market rallies. 

Going forward, I’ll be able to short fewer Puts because part of the account is now invested in shares of two companies. Two short Puts became In the Money and ended up being assigned. At this moment, the account owns 100 shares of CVS at an assigned price of $60 per share and 100 shares of WBA at $65/share. I’ll now start collecting dividends on these positions and opportunistically sell Out of the Money Calls on them for extra income.

Looking at May, all open short Put positions look healthy. Volatility is very low right now in the US markets with the VIX below 13. That, and the fact that earnings season is winding down means that finding good option premiums will be harder. So, far we have made more than $500 per month on average, but I am lowering my expectation to the $300/$400 range for the month of May due to the reasons mentioned earlier.

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