Another trading month has ended and I thought it would be useful to options trades that I have opened or closed and the earnings that I have made from options trading for the month of May 2022.
S&P 500 continued to decline before a rally happened towards the end of the month. A falling market is good for my covered call options contracts as I rolled the contracts to earn more premium. The strategy is explained in this article:
Why I Choose To Roll My CALL Option Contract When Share Price Falls
As you can see from the trade table above, I closed most of my trades in the first 3 weeks of May to lock in the profits before initiating (selling) new covered call contracts. Tesla and Nvidia helped me earn the most profits as their higher IV helped to bring in more premium. Their share prices also fluctuated (dropped) a lot during this month and with a higher delta, the drop in premium was more significant.
Earnings Increased By SGD19,342.80
For the month of May 2022, my total earnings increased by $19,342.80 and I used only a simple strategy of selling covered call contracts. I had a Tesla PUT contract expired in May but that did not contribute to the total earnings as the premium had already been factored in when the (sell) PUT contract was initiated in the month of April.
As I am currently using the strategy of selling long-dated CALL contracts, I am trading less this month. On days when I saw the market rally, I simply did not trade because the stock market going up is not beneficial to covered call option contracts sellers. Therefore, I would usually not trade for the day and go do other stuff. In that way, I save up more time on trading and go do other things instead.
Read more about the strategy here:
I Discovered A Way To Generate Higher Returns From Selling Covered CALL
With this strategy, I am not too concerned about a market rally and needing to cover back my sell CALL positions so as not to lose my shares at the strike price that will incur a loss for me. The reason is, that the expiration date is still far ahead and the price may come falling back down again. Also, the strike price is close to my breakeven price so even if the contract is exercised, I do not have a huge loss to bear.
The only downside is that the overall returns will not be fantastic if the market stays sideways and the contract is exercised eventually, as seen from the annualized returns in the below table on all my current open options contract positions.
I hope this sharing has been useful to you in some ways. I wish all the best in your investing/ trading journey.
*** FREE RESOURCES ***
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 on executing these trades:
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?
Also, check out my trading strategies in different market conditions, whether it is bullish, bearish or volatile:
How Not To Lose Money In Trading? | My Trading Strategies For Bullish, Bearish And Volatile Market
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 sense 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
Want to learn more about Technical Analysis (TA) but find it difficult to grasp the concepts? This article brings you TA at a glance and helps you understand key terminologies, indicators, and techniques used in TA to equip you with the knowledge that can empower you in your investing/ trading journey.
The Newbie Guide To Technical Analysis (TA)
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)
Follow me on your favorite social media platforms, Facebook, LinkedIn, or Twitter, to get notified of my latest blog posts. Or join our investing/ trading community at Telegram to exchange ideas or ask questions relating to investing/ trading.