Thoughts of a mechanical engineer turned programmer turned statistical investor. Here to save you from making mistakes I made at the beginning of my investing career.

Executed trades update – still (barely) green for the year

Which is something other indices can’t say for themselves.

Even after todays 2% rally, the nasdaq is down ~7% over the last month. After todays almost $10k of (unrealized) gains, we’re showing $2300 green for the year, so less than half a percent, but compared to the nasdaq’s YTD of -26%, not bad.

I did execute a couple of trades in the last couple of days:

Executed trades last 30 days

AAPL – I felt underexposed to apple, and now that they’re off 20$ (from 175->155) I figure I might as well sell some 130 puts… My total margin req for apple even after these additional puts is only $13k on a 500k portfolio so plenty of room to double down and add on the short puts.. Its like I almost would like those puts to go in the money so I can double down on the position. I also have 1 and 2 year aapl 100 and 105$ puts, which were placeholders, and they’re one of my few green positions.

GOLD – just sold another 2 short puts to round out my position to 15… The margin req is super low on GOLD (15%), and these puts only require 17k of margin so still not much of my portfolio… It was dumb I didn’t take some profits on them a couple months ago when GOLD was up at 25$, but oh well… I figure they’re fine, and if gold doesn’t go back up, it means the rest of my portfolio probably did, so kindof like a hedge.

V – Its just one of those companies that go up and to the right. Also one of my few green positions… Whenever they fall towards 180$ they promptly bounce off of it so I figure, if someone will pay me almost 6$ to buy V at 180 in the next 4 months… I’ll take your money now, and lets chat in another 3 months. Its another position which I kindof hope will go in the money so I can double down on this position.

Overall the trades dropped 4,200$ into my account, so not a ton of money but nice pocket change to pass a couple of months and slightly boost portfolio performance if the market drifts mostly horizontally.

I’m currently less than 50% invested (320k available out of 530k), and last month I promised if the market went back towards June lows I would re-deploy some cash, and although we’re not there yet (still 750 points to go on the nasdaq), thats what I’m doing.. Obviously very cautiously, because I definitely think the market could go back to June lows (or even lower), so still want to leave plenty of dry powder on the side.

My current portfolio value is -130k$, and since my portfolio is made almost exclusively of short puts, thats the amount of money I stand to make if all the positions expire worthless. And since most of the positions are 2 year positions, my potential return (if everything goes my way, unlikely but who knows) over the next 2 years is 130/530/2 years = 12%/year from where I am today, which is basically even for the year. Considering I’m less than 50% invested, that feels pretty decent to me.

We’ll see what the rest of September brings, but up or down, it will be another month of premium decay, so hopefully my portfolio will continue performing well. The nasdaq is basically where it was in May. If we compare the performance since May (trend lines added by me):

Its easy to see there is a high correlation between my portfolio and the nasdaq, ie I’m not trying to time the market, shorting it, or whatever, but I have a significant time premium decay advantage. Since May the nasdaq went up and back down, while my porfolio gained ~10%. And that is the strength of my style of investing: the market can go up and down, but time only goes forwards. As long as the market doesn’t go down forever, I will make money on the time premium decay.

See you next month!

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