Options Update: December 2017

Welcome to my last options update article for 2017!

I write monthly options update articles to keep track of options trades in my DivGro portfolio. Each options update serves as a status report on the open options and the obligations I have. I also report on new trades and provide a running tally of DivGro's options income to date.

While DivGro is focused on investing in dividend growth stocks, I added options trading to the mix in June 2016. My goal is to generate options income and to use the money I collect to buy more dividend growth stocks. I sell covered calls on dividend growth stocks I own or secured puts on stocks I'd like to own.

Through December 2017, I've collected options income totaling $20,263.

With secured options income of $8,464 from January through November, I've achieved my 2017 goal of collecting $8,400 in options income. I count secured options income, which is options income without associated obligations.

December was a quiet month with no new options trades. However, two open put options expired in December, so I've secured an additional $443 in options income.

Below is a snapshot showing these trades and the current income totals. You can see all my options trades on DivGro's Options page, which automatically updates whenever I enter new trades.

Assigned Options

When an options holder exercises an option, it is said to be assigned.

No options got assigned in December.

Expired Options

In December, two short put options expired:

#102

2017-08-18

:

2

×

HRL 15 Dec 2017 $32.50 P

$ 200.00

( $ -0.11 )

#122

2017-11-17

:

2

×

WBA 15 Dec 2017 $70.00 P

$ 244.00

( $ -0.99 )

On options expiration day, Hormel Foods (HRL) closed at $36.79, well above the put option's strike price of $32.50. I no longer have the obligation to buy 200 HRL shares at $32.50 per share.

On options expiration day, Walgreens Boots Alliance (WBA) closed at $71.94, well above the put option's strike price of $70. I no longer have the obligation to buy 200 WBA shares at $70 per share.

Closed Options

When an out of the money option goes further out of the money, you can close the option early and secure most of the options income.

I didn't close any options early in December. 

Rolled Options

Rolling forward options means buying back an option and selling another option with a later expiration date. You can do this to avoid options assignment for in the money options.

No open options were rolled forward In December.

New Covered Calls

Selling covered calls is a way to collect extra income on stocks you already own.

I did not sell any covered calls in December.

New Put Contracts

Selling put options allows me to set the price I'm willing to pay for a stock I want to buy. In effect, I get paid while waiting for the share price to drop!

I did not sell any put contracts in December.

Options Expiring Next Month

The following options expire in January:

#127

2017-11-30

:

2

×

EEM 19 Jan 2018 $46.00 P

$ 234.00

( $ -0.85 ) → Out of the money with a 1% safety margin

#125

2017-11-21

:

3

×

X 19 Jan 2018 $26.00 P

$ 252.00

( $ -2.09 ) → Out of the money with a 35% safety margin

#124

2017-11-21

:

2

×

RL 19 Jan 2018 $80.00 P

$ 150.00

( $ -0.09 ) → Out of the money with a 29% safety margin

#123

2017-11-21

:

3

×

BAC 19 Jan 2018 $25.00 P

$ 120.00

( $ -2.23 ) → Out of the money with a 19% safety margin

#118

2017-11-17

:

2

×

MO 19 Jan 2018 $62.50 P

$ 140.00

( $ -0.99 ) → Out of the money with a 15% safety margin

#112

2017-09-14

:

1

×

WFC 19 Jan 2018 $50.00 P

$ 166.00

( $ -1.59 ) → Out of the money with a 22% safety margin

#109

2017-08-30

:

2

×

WFC 19 Jan 2018 $50.00 P

$ 364.00

( $ -1.30 ) → Out of the money with a 22% safety margin

#108

2017-08-30

:

2

×

TGT 19 Jan 2018 $50.00 P

$ 336.00

( $ -1.59 ) → Out of the money with a 32% safety margin

#094

2017-07-18

:

2

×

SBUX 19 Jan 2018 $52.50 P

$ 246.00

( $ -1.00 ) → Out of the money with a 9% safety margin

#079

2017-05-12

:

2

×

KO 19 Jan 2018 $45.00 C

$ 200.00

( $ -3.13 )→ In the money by 2%

I'll need to monitor a few of these options carefully in order to take the appropriate actions. In particular, the Coca-Cola (KO) covered call options are about 2% in the money, so I'll need to protect my shares by rolling forward the options. Also, the iShares MSCI Emerging Markets ETF (EEM) put options have a small margin of safety, and I don't really want to own the shares. I'll roll those forward if necessary.

Options Income Tally

Here is a running tally of the total amount received from options trades, as well as the options premiums secured due to options that expired:

key:  expired  •  closed  •  rolled  •  assigned  •  open 

ID	DATE	:	NO	×	TICKER OPTION	INCOME	( EXPENSES )	ROLLED	TOTAL	➤ SECURED
#127	2017-11-30	:	2	×	EEM 19 Jan 2018 $46.00 P	$    234.00	( $        -0.85 )		$ 20,263.12	➤ $ 11,420.12
#126	2017-11-30	:	2	×	BBT 16 Mar 2018 $46.00 P	$    192.00	( $        -0.99 )		$ 20,029.97	➤ $ 11,420.97
#125	2017-11-21	:	3	×	X 19 Jan 2018 $26.00 P	$    252.00	( $        -2.09 )		$ 19,838.96	➤ $ 11,421.96
#124	2017-11-21	:	2	×	RL 19 Jan 2018 $80.00 P	$    150.00	( $        -0.09 )		$ 19,589.05	➤ $ 11,424.05
#123	2017-11-21	:	3	×	BAC 19 Jan 2018 $25.00 P	$    120.00	( $        -2.23 )		$ 19,439.14	➤ $ 11,424.14
#122	2017-11-17	:	2	×	WBA 15 Dec 2017 $70.00 P	$    244.00	( $        -0.99 )		$ 19,321.37	➤ $ 11,426.37
#121	2017-11-17	:	1	×	VLO 18 Jan 2019 $80.00 C	$    892.00	( $        -0.64 )		$ 19,078.36	➤ $ 11,183.36
#120	2017-11-17	:	2	×	TXN 16 Mar 2018 $85.00 P	$    200.00	( $        -0.99 )		$ 18,187.00	➤ $ 11,184.00
#119	2017-11-17	:	3	×	NKE 20 Apr 2018 $50.00 P	$    208.00	( $        -2.39 )		$ 17,987.99	➤ $ 11,184.99
#118	2017-11-17	:	2	×	MO 19 Jan 2018 $62.50 P	$    140.00	( $        -0.99 )		$ 17,782.38	➤ $ 11,187.38
#117	2017-11-17	:	2	×	AAPL 16 Feb 2018 $150.00 P	$    376.00	( $        -1.60 )		$ 17,643.37	➤ $ 11,188.37
#116	2017-10-20	:	2	×	INTC 17 Jan 2020 $40.00 C	$ 1,032.00	( $        -1.01 )		$ 17,268.97	➤ $ 11,189.97
#115	2017-10-20	:	1	×	DIS 15 Dec 2017 $95.00 P	$    145.00	( $      -17.59 )		$ 16,237.98	➤ $ 11,190.98
#114	2017-10-20	:	1	×	D 20 Apr 2018 $80.00 C	$    253.00	( $        -0.35 )		$ 16,110.57	➤ $ 11,063.57
#113	2017-09-27	:	2	×	VLO 17 Nov 2017 $70.00 P	$    162.00	( $        -0.99 )		$ 15,857.92	➤ $ 11,063.92
#112	2017-09-14	:	1	×	WFC 19 Jan 2018 $50.00 P	$    166.00	( $        -1.59 )		$ 15,696.91	➤ $ 10,902.91
#111	2017-09-14	:	2	×	AAPL 15 Dec 2017 $135.00 P	$    203.00	( $      -14.17 )	→ #117	$ 15,532.50	➤ $ 10,904.50
#110	2017-08-30	:	2	×	WMT 15 Dec 2017 $75.00 P	$    314.00	( $        -7.15 )		$ 15,343.67	➤ $ 10,715.67
#109	2017-08-30	:	2	×	WFC 19 Jan 2018 $50.00 P	$    364.00	( $        -1.30 )		$ 15,036.82	➤ $ 10,408.82
#108	2017-08-30	:	2	×	TGT 19 Jan 2018 $50.00 P	$    336.00	( $        -1.59 )		$ 14,674.12	➤ $ 10,410.12
#107	2017-08-30	:	4	×	QCOM 20 Apr 2018 $60.00 C	$    524.00	( $        -1.99 )		$ 14,339.71	➤ $ 10,411.71
#106	2017-08-30	:	2	×	GILD 15 Feb 2018 $80.00 C	$    923.00	( $        -1.91 )		$ 13,817.70	➤ $ 10,413.70
#105	2017-08-30	:	20	×	F 16 Mar 2018 $12.00 C	$    480.00	( $      -25.68 )		$ 12,896.61	➤ $ 10,415.61
#104	2017-08-30	:	3	×	CSCO 16 Feb 2018 $34.00 C	$    182.00	( $        -2.38 )		$ 12,442.29	➤ $ 10,441.29
#103	2017-08-30	:	2	×	ABBV 15 Jun 2018 $70.00 C	$ 1,373.00	( $        -1.32 )		$ 12,262.67	➤ $ 10,443.67
#102	2017-08-18	:	2	×	HRL 15 Dec 2017 $32.50 P	$    200.00	( $        -0.11 )		$ 10,890.99	➤ $ 10,444.99
#101	2017-07-18	:	3	×	PFE 15 Dec 2017 $34.00 C	$    210.00	( $        -2.39 )		$ 10,691.10	➤ $ 10,245.10
#100	2017-07-18	:	2	×	LOW 19 Jan 2018 $75.00 P	$    830.00	( $    -113.67 )		$ 10,483.49	➤ $ 10,037.49
#099	2017-07-18	:	3	×	GE 18 Jun 2018 $30.00 C	$    153.00	( $      -12.21 )		$ 9,767.16	➤ $ 9,321.16
#098	2017-07-18	:	3	×	NKE 19 Jan 2018 $50.00 P	$    301.00	( $      -79.22 )	→ #119	$ 9,626.37	➤ $ 9,180.37
#097	2017-07-18	:	3	×	WFC 15 Sep 2017 $52.50 P	$    222.00	( $    -364.44 )	→ #112	$ 9,404.59	➤ $ 8,958.59
#096	2017-07-18	:	2	×	WBA 25 Aug 2017 $75.00 P	$    130.00	( $        -0.99 )		$ 9,547.03	➤ $ 9,101.03
#095	2017-07-18	:	1	×	TXN 20 Oct 2017 $75.00 P	$    134.00	( $        -6.89 )		$ 9,418.02	➤ $ 8,972.02
#094	2017-07-18	:	2	×	SBUX 19 Jan 2018 $52.50 P	$    246.00	( $        -1.00 )		$ 9,290.91	➤ $ 8,844.91
#093	2017-07-18	:	1	×	DIS 20 Oct 2017 $97.50 P	$    105.00	( $        -0.80 )		$ 9,045.91	➤ $ 8,845.91
#092	2017-07-18	:	1	×	AAPL 20 Oct 2018 $130.00 P	$    114.00	( $        -8.04 )		$ 8,941.71	➤ $ 8,741.71
#091	2017-07-01	:	3	×	GE 15 Sep 2017 $33.00 C	$      98.50	( $        -4.97 )	→ #099	$ 8,835.75	➤ $ 8,635.75
#090	2017-06-21	:	2	×	TGT 19 Jan 2018 $65.00 C	$      76.00	( $    -235.55 )		$ 8,742.22	➤ $ 8,542.22
#089	2017-06-21	:	2	×	INTC 20 Oct 2017 $36.00 C	$    152.00	( $    -853.97 )	→ #116	$ 8,901.77	➤ $ 8,701.77
#088	2017-06-21	:	20	×	F 15 Sep 2017 $12.00 C	$    220.00	( $      -62.44 )	→ #105	$ 9,603.74	➤ $ 9,403.74
#087	2017-06-21	:	5	×	BAC 18 Aug 2017 $22.00 P	$    190.00	( $        -6.48 )		$ 9,446.18	➤ $ 9,246.18
#086	2017-06-16	:	2	×	WMT 15 Sep 2017 $70.00 P	$    246.00	( $        -9.16 )	→ #110	$ 9,262.66	➤ $ 9,062.66
#085	2017-06-16	:	1	×	VLO 15 Dec 2017 $70.00 C	$    230.00	( $ -1,211.42 )	→ #121	$ 9,025.82	➤ $ 8,825.82
#084	2017-06-16	:	2	×	TGT 20 Oct 2017 $45.00 P	$    248.00	( $      -22.58 )	→ #108	$ 10,007.24	➤ $ 9,807.24
#083	2017-06-16	:	3	×	PPL 20 Oct 2017 $37.00 P	$    147.00	( $      -32.48 )		$ 9,781.82	➤ $ 9,581.82
#082	2017-06-16	:	1	×	CVS 18 Aug 2017 $75.00 P	$    222.00	( $        -0.80 )		$ 9,667.30	➤ $ 9,467.30
#081	2017-06-16	:	2	×	AXP 21 Jul 2017 $80.00 P	$    266.00	( $        -1.00 )		$ 9,446.10	➤ $ 9,246.10
#080	2017-05-12	:	1	×	OC 18 Aug 2017 $60.00 P	$    210.00	( $        -1.95 )		$ 9,181.10	➤ $ 8,981.10
#079	2017-05-12	:	2	×	KO 19 Jan 2018 $45.00 C	$    200.00	( $        -3.13 )		$ 8,973.05	➤ $ 8,773.05
#078	2017-05-12	:	2	×	DIS 15 Dec 2017 $110.00 C	$ 1,090.00	( $      -83.99 )		$ 8,776.18	➤ $ 8,776.18
#077	2017-05-12	:	2	×	ABBV 15 Sep 2017 $67.50 C	$    408.00	( $ -1,295.88 )	→ #103	$ 7,770.17	➤ $ 7,770.17
#076	2017-04-21	:	2	×	LOW 21 Jul 2017 $80.00 P	$    408.00	( $    -743.57 )	→ #100	$ 8,658.05	➤ $ 8,658.05
#075	2017-04-21	:	3	×	INTC 16 Jun 2017 $35.00 P	$    189.00	( $        -3.86 )		$ 8,993.62	➤ $ 8,993.62
#074	2017-04-21	:	2	×	GILD 15 Sep 2017 $75.00 C	$    210.00	( $    -949.47 )	→ #106	$ 8,808.48	➤ $ 8,808.48
#073	2017-04-21	:	20	×	F 16 Jun 2017 $12.00 C	$    320.00	( $        -9.11 )		$ 9,547.95	➤ $ 9,547.95
#072	2017-04-21	:	1	×	D 20 Oct 2017 $77.50 C	$    323.00	( $    -220.69 )	→ #114	$ 9,237.06	➤ $ 9,237.06
#071	2017-04-21	:	5	×	BAC 21 Jul 2017 $20.00 P	$    160.00	( $        -2.28 )		$ 9,134.75	➤ $ 9,134.75

key:  expired  •  closed  •  rolled  •  assigned  •  open 

For a complete listing of all options transactions, please visit my Options History page.

Goals Progress

I count secured options income, which is income from options with no further obligations.

	Total Options Income		Secured Options Income
This Month:	$ 20,263		$ 11,420
Last Month:	$ 20,263		$ 10,976
Difference:	$          0		$      444

I started 2017 with $2,512 in secured options income, so with $11,420 secured through December 2017, I've earned $8,908 in options income. This is 106% of my options income goal of $8,400 for 2017.

In 2018, I'm hoping to grow DivGro's options trading activity significantly and to secure $12,000 in options income throughout the year. To do so, I'm planning to transfer one of my FolioInvesting accounts to Interactive Brokers to enhance my ability to trade options. The $12,000 goal represents an increase of 43%, which will be quite a stretch, but I'm looking forward to the challenge!

Take care everybody and thanks for reading!

I hope you find these Options Update articles informative. I continue to consider myself a learning options trader. If you see anything you disagree with or question, please let me know in the comments below. Or if you just want to share some advice or encouragement, I'd be happy to hear from you, too!