Thu 21 Aug 2008
Raked in $3500 in August
Posted by RichSlick under John Galt
[4] Comments
August was a fairly good month as I raked in ~$3500 with about 8 trades or as I like to think of it, 8 clicks of the mouse across a couple of electronic accounts. It’s really not that hard to make money once you have some good working capital. There are many ways to rake in cash out there but the allure of a brokerage account has been that it can be done in minutes with a click of a mouse.
The best part of the cash flow, however, is that it gets reinvested back into the “system” to earn more cash and hopefully, with time will grow enough to become a primary source of income to live on. Unfortunately, it is becoming very time consuming to keep up with my blogs and I may soon have to make a choice about the future of continuing on with them.
Oddly enough, deep inside, I’ve always known that the time would come when I would have to choose between focusing on simply making money vs. making money+ blogging about it. It does get fairly lonely at the “top” and there aren’t too many capitalist bloggers out there sharing knowledge. It is impractical to get people like Warren Buffet or Donald Trump to blog daily about their activities and while I’m nowhere near their financial league, it is easy to see why they don’t blog; their time is simply better spent earning the money and enjoying the fruits of their labor.
August 21st, 2008 at 11:09 am
I started to mention in the previous post’s comments section, but, thought it might be more appropriate here.
I would be really bummed if you stopped disseminating the information here and on your other site. I am not your target audience – working in higher ed has been my trade off for high current income and net worth! But, it doesn’t mean that I don’t want to learn how to make more money and use my lifestyle to accumulate and build wealth.
Fortunately, I have used the information that you have provided as A TOOL and learned from what you say. I don’t duplicate all of your trades – I can’t – I don’t have that kind of capital. But, I have learned to look for situations where I can make money in somewhat limited downside transactions. Since I have been reading your blog, I have raked in cash from the sale of option premiums on EWH, SMH, and XHB. I have also done so with individual stocks INTC, JBLU, and YHOO. This is just one part of my investment strategy – I also have dividend-paying stocks and the traditional buy-and-hold funds in my 401k (ok, 403b, but you get the idea!). Over the same time frame, the section of my investments that has performed the best has been the stocks/funds on which I write covered calls.
A couple of quick examples – the key is that when I purchased the stock/fund, I was happy to buy that equity at that price on that day. I purchased JBLU last November for $6.90/share. Today, the stock is trading a little over $5 – not good, by any stretch. But, over that time, I have sold enough call premiums that *if* I sold my stock today, I would make a profit on the trade. I suspect there are few who bought JBLU last Nov and still hold it that can say the same thing.
Just yesterday, I purchased SLW for $11.26. I have been following the stock for a long time and watched it dip (just as gold stocks have) and bounce back up a little. I sold the OCT 12.50 call this morning for a buck. Pocketed $100 ($95 after commission). If called, I make almost 20% in under two months hold. If it doesn’t get called away, I sell the options again one or two months out. Brilliant, if you ask me.
I also purchased UYG last week (I believe all possible bad news is priced into financials at this point). I was waiting to sell the call – and the market has beaten up financials again this week. That’s OK…I wanted to own UYG at $21.16 and I can wait patiently until it creeps back up and I can sell a good call premium. I anticipate making ~5% for less than one month hold (hopefully).
So, what this really, really long comment is meant to say is – THANKS! Thanks for making your hard work and information available to the little guy like me – to help me learn! I am not ashamed to admit that I don’t know everything and will happily learn from those who know more than I do!
Cheers, my friend.
August 21st, 2008 at 5:02 pm
Travelin Man,
Thanks for the kind words. My initial goal was to blog until I hit 1 million in cash earned from ETF Covered Calls but it will likely take me the better part of the day to simply post my transactions when I get there and I’m not sure if too many people “get it” and that’s the frustrating part.
I had hoped to exchange some strategies and ideas with a few folks but they’re just not out there blogging about it because they’re too busy making money. I am fearful that it’s going to happen to me at some point.
I like that you told me that you’re in UYG. I’ve been VERY close to pulling the trigger this week. I’m actually waiting for September to roll around to dive into UYG.
Thanks for the comment.
August 29th, 2008 at 2:11 pm
Well, if you want to play the Travelin’ Man Home Game, I sold the SEP $22 calls on UYG today for $1.40 – cleared $135 after commissions. According to my calculations, if called, I will clear nearly $10% (9.83) for less than 45 day hold. If UYG closes below $22, I will happily wait and sell OCT or NOV call when the premium is right.
August 29th, 2008 at 3:31 pm
Cha ching Travelin’ Man! That’s a great play.
UYG went under $19 a few days ago and I was planning on selling 10 contracts (naked puts) for $19 Sept expiry. I would have made $1500 in one fell swoop.
UYG has now rallied and I could have bought those puts back cheap but I hesitated. I wanted to wait until after this Friday to see if FDIC closes any more banks before I dive into UYG.
Next week, UYG and I have our first money making date.