Covered Calls for Income

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Welcome to my second ever options income monthly update. The new site is gaining a nice following. Many of them have followed me to this site. Hopefully more DGI bloggers take to options, so we can call share ideas, wins, and losses.

Scott created a slick options tracking spreadsheet. He was kind enough to let me be a beta tester. Scott has made my life easier and not just in the options world. Scott also gives away a cool dividend income tracking spreadsheet. Many bloggers use this spreadsheet. Scott is a hybrid investor like me. He invests in dividend income stocks, but he also sells covered calls and puts. He just wrote a great post on how he manages put options. In October, I had 21 options contracts closed or assigned.

The breakdown of income and expenses, is as follows:. The options tracker below, shows all 21 transactions. All contracts are closed and were closed in the month of October. Every transaction has been documents in blog posts through the month of October.

Take a look around this site and read a few recent posts trading option for income spreadsheet learn more about why I bought, sold, or closed contracts. Checkout that post over at Investment Hunting.

Many readers commented that I was doing it wrong. I do agree that their way is the correct way to track options income. Can anyone guess the film and the star who quoted it? I used to account for profits at the time of contract sale. By this I mean, my profit is not booked until an option contract is closed, assigned, or expires.

I went ahead and restated my monthly income back to the beginning. This of course changed my monthly income totals. Money moved around and was realized in different months. Regardless of accounting methods, the past two months have been my best options income months. Yes, sometimes options do require a little luck. The amount is incorrect. That was a nice win for me. Of course other months that I thought were profitable were not. So when you close an option, do you have to pay a penalty?

You pay a closing fee. The only way to avoid the closing fee is to have the option expire or be assigned. Damn, maybe you should look for an other broker. I moved all of my after tax accounts over to Interactive Brokers, but the bulk of my pre-tax is still with Schwab. I got a shout out! Have you looked at moving to Interactive Brokers?

If you are going to do a significant amount of options trading it is probably trading option for income spreadsheet to migrate. Og course, the callout is well deserved. I love reading your posts. I really like how you include a link to the current option value. Then it would be a one-stop view of my trades. Right now, I still need to look online at current bids and asks.

I know, those damn fees are killing me. I will have the majority of my accounts moved over by the end of this year. All of these trades are in Roth Ira or Ira, so no taxes are paid here.

Never on the Roth and at trading option for income spreadsheet time of withdrawl on the IRA. I hear you about the governmnet, they want their money ASAP. Do you trade on margin or all covered? Stal Stalflare recently posted… October Update. My trading option for income spreadsheet is much more put heavy right now trading option for income spreadsheet I sold a bunch of stock earlier in the year.

It will likely be more covered calls once the market corrects again and i buy trading option for income spreadsheet bunch of stock. I tried to make this for several months, but I dont made it yet. I was hesitant to change my accounting structure, but you wee all right, this is a better way to look at it.

Thanks for the kind words. The spreadsheet looks nice. It has trading option for income spreadsheet things that have been on my wishlist since long. I might need to go and pimp mine. I got beat up pretty good earlier in the year. And I have a question regarding your Realty Income Call. What was your margin of safety on this one?

I never thought of selling a call with a strike price far below the current price. But essentially I was shorting O stock but through a call vs a put. The buyer would have to pay market value per share for the stock, plus the premium to close. They would end up paying more for the stock than it was trading for on the day I sold the contract. Let me know if this makes sense. Also, If I misunderstood your question, please clarify.

Hopefully I can keep this pace up. Looks like many of our fellow bloggers who have ventured into options are doing well. Can you please explain. How is it calculated? Exit price is the premium I pay if I choose to close a contract early. I do this because markets are volatile. Also, I can usually make more money but closing a contract early and selling another option.

If I let an option expire or be assigned I would not pay an exit price. Looking at the last row of my options above, the Visa contract. I ended up closing the contract early. Thank you for the explanation. Stock price movement is one of them. Just like stocks, options on those stocks have a bid price and and asking price. When markets are open, those prices change constantly.

These prices can be found in any options chain. The breakdown of trading option for income spreadsheet and expenses, is as follows: Thanks to the trading option for income spreadsheet for showing me the trading option for income spreadsheet income accounting light. Do you buy or sell options? How much was your options income this month?

Comments So when you close an option, do you have to pay a penalty? Sorry one more question and a small if I may advice… Do you trade on margin or all covered? That is my YTD! Sharing is a good idea. Disclaimer I'm not a financial planner. I have no professional training in the financial space. All site content, including comments, should be viewed for entertainment purposes only. Any options trades, buy, sells, call, puts, or any other investing information I publish should trading option for income spreadsheet be considered a recommendation.

I am not liable for any losses you experience. Take trading option for income spreadsheet responsibility for your actions. Hire trained professionals before investing in anything.

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The last update was on Stock Symbol The underlying stock that the specific option was sold against. Open Date Open Date is the date that the specific option contract was sold. Exp Date Exp date is the date that the specific option contract is scheduled to end. Keep in mind, not all contracts go to their expiration date. A buyer of a covered call may choose to take the stocks early. Also, as an options seller, I may choose to close the contract early. Call or Put This field indicates whether I sold a covered call or cash secured put.

Stock Price DOC This field shows the underlying stock price at the time of the specific option contract sale. DTE Date to Expiration. The number of days remaining in the options contract. Current Stock Pric e This field shows the current stock price of the underlying stock.

My actual tracking spreadsheet is set to update every 5 minutes. Break Even Price This field shows the dollar amount of the underlying stock that equals my breakeven price. Strike Price Strike Price is the price that I agreed to either buy or sell the underlying stock at. Premium Premium is the price I am paid for selling a call or put. Options work in share increments. A premium is the price paid before fees.

I typically sell just one contract. PUT Cash Reserve This filed shows the amount of money that I need to hold in my broker account to sell the option contract. If I did, I could sell options with less up front money. For example, I own shares of Philip Morris. I sell one covered call shares. My cost basis can be one of two numbers, either the cost of shares at the contract strike price or the cost basis of my shares. I choose to use my cost basis. I use my cost basis at a per share price.

Fees Fees are all fees I must pay to buy or sell an options contract. Exit Price This is the premium I pay to close a contract. Close Date If I choose to close an option, this field lists the date I closed the contract. Losses are shown in this tab if I paid more to close a contract than it was sold for. Days Held The actual number of days a contract was held. If this field is empty, a contract is still open or expired.

Status Status can be one of four terms open, close, assigned, early assignment. Open and close are pretty self explanatory. Assigned is a contract that I let expire in the money. This means I allowed shares to be sold from my account, or I chose to buy shares. Early Assignment is when the buyer of a covered call decides to take the stock early. This can happen at any price, either above or below the strike price. It makes sense in some cases above the strike price. Collecting dividends or cashing out on gains are two popular reasons for early assignment.

Early assignment costs me money. Disclaimer I'm not a financial planner. I have no professional training in the financial space. All site content, including comments, should be viewed for entertainment purposes only.

Any options trades, buy, sells, call, puts, or any other investing information I publish should not be considered a recommendation. I am not liable for any losses you experience. Take personal responsibility for your actions. Hire trained professionals before investing in anything. Disclosure This site does serve display ads and other advertisements. I may also have affiliate partnerships that pay me a commission after you click on a link from this site.

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