I think it would garner more attention in the more active investment forum, and since it touches on dividends and options it would be appropriate to post it there.
Originally Posted by Dmoney
Well, I'll leave it here for now until it's a little more comprehensive, then will consider moving it I suppose. I figure it belongs in money diaries though as it's going to chronicle my experience for the next little while at least.
I took advantage of a strong day for TLM, buying back my Jan 14 calls for $0.09 and selling March 13 calls for $0.71. I removed the $0.09 plus commissions from December and January income then spread the income from the $0.71 across Dec, Jan, Feb and March.
I've also added in my expected Dec. dividend income.
I will update actual dividend income as well as a net worth update closer to Jan 1.
Update for the New Year
So another year come and gone, a good one overall, quite eventful.
Graduated university with a degree in finance, got a contract job and two months in got a job offer in Toronto with much better prospects so I made the move in July.
Somewhat expensive starting up in a new city and making the transition from living at home (rent free) and going to school, to working crazy hours and living in downtown Toronto paying exorbitant rent.
I have tracked my finances in quite some detail from early June, and one goal for 2012 is to have everything tracked in even more detail, some of which I will be posting here.
For December I increased my net worth by 2.13%
Cash: $11,593 ($5k primed for TFSA in Jan)
Unregistered account: $70,432
Employee share plan: $1,500 (It's actually slightly lower but I don't have online access yet to get the accurate number so I'm recording at book value at the moment)
I've been working and saving since I was extremely young (mowing lawns, raking leaves, shovelling snow), got my first 'job' as a camp counsellor when I was 12 and never looked back. Had all my savings in mutual funds for about 10 years and have learnt my lesson there.
I now have a job in equity research and love that I am connected to the financial markets more or less 24/7.
Going forward - goals for 2012:
Net worth target: $150,000 - Ambitious but a few things should hopefully get me there.
-I will hopefully get a raise sometime in the first half of 2012
-Two semi-annual bonuses, which if the past is a good indicator should sum up to roughly my base pay
-The girlfriend, who I live with, hopefully finishes school and gets a job, should let me save more
-50% of after-tax base pay (~3,700/month, so save $1,850)
-100% of bonus pay - ????? haven't been here long enough to know how much I should reasonably expect
-Might look into getting my CFA designation
-Will keep myself open to buying a house or condo in the New Year, but no desire to rush it
-Get back into shape - hit the gym a minimum of 3 times a week, no excuses
Hopefully tracking myself here will keep me honest. I think the most challenging will be saving 50% of after-tax pay, so here's hoping I get a raise .
Happy new year to all.
With January options nearing expiry, I took the opportunity to roll over some of my positions today.
BNS had a great day, so I thought I'd take advantage of the euphoria and replace my January $56 calls with April $56 calls.
BNS was trading ~$53.74 when I initiated the position, sold 6 calls for $0.72.
I stand to make:
Capital gains of 16.5% annualized
Premiums of 5.3% annualized
Dividend of 4% annualized
Optimal total return of 25.6%
Telus was up in early trading, but fell later in the day, and I sold 5 February $56 puts for $0.94.
The annualized premium yield on this particular option is 20.4%.
I'm willing to buy the stock at $56, and will turn around and write covered calls if I am exercised, while collecting my dividend.
Here's where I stand with portfolio income after today's option trades. I broke through $900 in option income for January and will break $1,000 in "passive" income after dividends.
My next target is $1,500 which I will hopefully get sometime in 2012.
Also aiming to register at least 4 months of income over $1,000 for the year, particularly when my big dividend payments come in.
I will be updating again in early February with my monthly results. January dividends should be good with ~$312 in dividends from BNS and just under $100 from the rest of my portfolio.
A little bit of a tangent. I'm just starting out in options trading. Can you recommend 1-2 good books for a beginner? I'm a pretty knowledgeable investor having managed my own 'coach potato' account for a few years, but I want to start adding options to the mix to increase my returns.
I haven't read nearly as many as I should have but here's a good start:
Hull's books are very widely renowned and are used in most Canadian University level options courses.
There's lots of good websites (including Wikipedia) that can give you a breakdown of all the strategies available and when it's ideal to use them. Beware that most of these websites are trying to sell you on how easy options are and how you can't lose.
Keep in mind that there is a big downside to most of the strategies that appear to be the best.
Thanks for your input. What are a few low risk, modest return strategies commonly employed by retail investors to generate income?
It seems like the most common is writing covered calls. Buy the stock, write calls on the same stock. You limit your upside, but you have the full downside.
Originally Posted by cash
There are various spreads that you can use, I'll leave you to look them up yourself, as I'm no expert and don't use them myself.
More in depth options discussion in this thread
Hey Dmoney, awesome thread - you're right around where I hope to be 4 years from now.
That is, graduated with a finance degree and around 100k net worth.
Do you have any books you'd recommend someone with zero knowledge of options to read?