The S&P 500 dropped a further 7% as higher-than-expected CPI (Consumer Price Index) again stroke fears of aggressive interest rate hikes by Federal Reserves, to bring inflation down. The market fell again as it absorbed the 75 basis point interest rate hike in June 2022, which would increase the likelihood of a recession.
Due to the share price drop, my total unrealized loss from my trading portfolio has increased to more than 600k, as the shares that I own dropped in value and the options contract losing their premium value.
More details are shared in this article:
What Is Worse Than Having A Portfolio With $618,800 (Unrealized) Loss?
I know there are many investors feeling depressed or demoralized to see their portfolio being down by a huge percentage. To friends who are struggling to cope with the massive loss in your portfolio, this article may bring some comfort to you:
If You Are Feeling Depressed From Losing Lots Of Money In The Stock Market, Here’s An Article For You
My Trades
For this month, I did not trade as frequently as the previous months. My last trade for the month (for Wheel Strategy Portfolio) was done on the 16 June , which coincide with a market rally to almost end of the month. As selling covered call is a bearish bet, whereby the premium of the covered call contract increases with the share price, I was not able to trade (roll) the covered call contracts that I have sold.
The profits reflected in the above table were made earlier in the month through rolling covered call contracts when the market fell.
LEAPS PUT Portfolio
I also built up my LEAPS PUT portfolio in June 2022 to act as a hedge for my 453k LEAPS CALL portfolio if the market continues to crash in the 2nd half of this year or in 2023. This strategy of buying LEAPS PUT is explained in this post:
Plan B Of Saving My LEAPS Portfolio
Earnings Increased By SGD 15,380.95
My total earnings for the month of June increased by another SGD15,380.95, with bulk of it coming from a new covered call contract that I sold on Tesla, after the previous PUT contract was exercised in May 2022, which resulted in me owning another 100 shares of Tesla.
The strategy that I used to achieve these higher returns is by selling longer-dated covered call contracts and I have explained the rationale in this post:
I Discovered A Way To Generate Higher Returns From Selling Covered CALL
This increase in total earnings could have been higher if not for the loss (SGD3,245) incurred when the Nio CALL contracts that I bought last year expired worthless on 17 June 2022.
Concluding Thoughts
I hope the above figures do not mislead anyone into thinking that I am earning 5 figures through options trading every month. The reason for the 5-figure increase in total earnings for the past 5 months is due to me selling long-dated covered calls which can fetch higher premium.
Some of my covered call contracts that I sold will expire on Jan 2024, which means that the premium has already factor in 2023 returns, assuming that the contracts eventually progress till expiry date.
My total return for this year has briefly crossed the 100k mark, which is almost 50% of what I earned in last year’s bull market. It is a bittersweet moment as on one hand, it feels like it is a reasonably good achievement in a bear market but on the other hand, I have the huge unrealised loss to deal with.
I hope this sharing has been useful to you in some ways and I wish all of you the best of luck 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:
MY 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)
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Learning Investment With Jason Cai 