[28 Jan Trades] How I Am Trading In This Volatile Market and Generating Income With No Extra Funds

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The market finally has a green day on 28th January as it rebounded from its recent selloff. Most of the stocks in my watchlist closed in green (with gains).

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While the rebound happened for big tech and chip companies, some of my growth stocks that are currently on covered call contracts have fallen in share price since the time I sold covered call on them 2 days ago (26th Jan 2022).

So, I took the opportunity to close them, locked in my profits, and opened new covered call contracts with different strike prices. See bold bracket for final premium / % returns collected after closing the respective contract.

Name of StockStrike Price (USD)Premium Collected (USD)Returns (%)
Pinterest27224 —-> (16)3.68 (0.26)
Nio23151 —-> (123)3.56 (2.90)
Palantir1114 x 232 = 3248 —-> (756)11.9 (2.77)



Nio was my biggest gainer among these 3 contracts as I earned a 2.9% return in 2 days. This was due to Nio’s share price falling the previous day on 27th Jan, dragged down my Tesla’s 11.55% drop in share price after earnings were released. Remember, when the share price dropped, it is a good thing for the covered call option sellers.

For Palantir, I managed to get a decent 2.77% return in 2 days and for Pinterest, the return was negligible as the share price stayed pretty much the same as it was on 26th Jan.

I open up new covered call contracts with the same expiry date (4th Feb 2022) but I adjusted the strike prices, with the view that stock could rebound further next week.

Name of StockStrike Price (USD)Premium Collected (USD)Returns (%)
Pinterest281702,79
Nio211092.56
Palantir1314 x 40 = 5602..05

This is how I am trading in a volatile and bearish market. When the share prices are falling, I keep rolling my covered calls to a lower strike price or a further expiration date and lock in the profits. When the share price rises, I close my positions to prevent losing the shares at a loss as the strike price is way below my breakeven price. This is also how I am generating returns when I do not have any more capital to buy new shares or open new options contracts after spending more than USD 100k to buy the dip in December.

***
Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading

The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread

Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts behind executing these trades:
MY TRADES

Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)

If the bear market in 2022 is making feel depressed as your stocks come tumbling down, read this article to find out how you can use options trading to help you claw back some of your losses as you await market recovery:
How I Do Earn Even When The Stock Market Is Bearish?

I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day

I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021

This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months

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