Our IB account has been “stalled” since early February. To protect the gains from 2020 the account went from carrying margin of $150,000 to $200,000 in cash. We missed the opportunity with the recent rally but feel comfortable that we protected the gains. We have opened some new small CC positions primarily in stocks where we like the growth and dividend. Plans are to continue writing covered calls against the positions.
Current positions in the account are generating a net profit of $135,572. Six of the positions are more profitable due to contributions from the options. 8 of the 11 positions are profitable overall. Last Friday we had options on SDC and DGX expiring. We didn’t like the roll prices so we let them expire and have not sold new calls yet. ABT, DGX, MPLX, PBR and VIAC were all Dividend Capture Strategies (plus covered calls).
It is much easier (and fun) to manage your investments in a flat or up market. Down markets take knowledge and skills that I am improving but still have lots to learn.
Market has been tough the past six days. Doing my best to protect the gains from the past year…and have cash available if we see some bargains. In the past week I have reduced the number (tried to keep the less volatile stocks) and size of the positions. In the chart on the right the green line is the swing in cash (from carrying margin of $150,000 to cash of $100,000).
Hopefully we can continue to protect the capital and have either the patience to wait or be successful in testing some bearish strategies.
Unfortunately my Schwab accounts have been hit harder as the positions are much larger and more complicated to get in and out of. The iron condors are holding up…so far…but if the market keeps falling they will create some challenges.
Each of the charts below represents a covered call position in the IB account (with the exception of PINS which is a bull put spread). Total Profit/Loss is in the top section. Return on the position and annualized return is in the second table. Graphs show where the profit/loss is coming from (stock or option). In an ideal covered call the net profit would be higher than either the individual stock profit or option profit components (see ATEC at the bottom). With ATEC I added additional option elements at different times which seems to have helped with option profits. The bull market over the past eight months has pushed stock prices up making it difficult not to “lose” money when we buy back the short call options. Each time we “lose” money on an option roll up it creates a short term capital loss we can use for tax purposes. Once we establish a position we rarely sell the stock until we have held the position for 12 months so we only pay long term capital gains.
Market had a good week which is reflected in the account performance. YTD the account is up over 6% versus 2.3% for the S&P 500 Index.
Current account positions are in the table below. 10 of 11 positions are profitable. Most of the positions had bullish rolls. BCRX, DXCM, INMD were vertical rolls (same expiration date, higher strike) and NIO and PYPL were diagonal rolls (next expiration and higher strike price). PTON was a calendar roll (next expiration and same strike price). SDC was a negative diagonal roll as the stock price dropped during the week. New calls were written on STE. No change to ATEC or PINS position.