Closing Options Early

In my previous article on Options, I explained how I sell options to generate extra income.

Similar to how my DivGro portfolio generates dividend income, I use my portfolio as leverage to sell options and generate options income. I reinvest both income streams, buying more dividend growth stocks and boosting DivGro’s dividend income stream. 

Since June 2016, I've collected and reinvested more than $100,000 in options income.

Selling Options for Extra Income

It's been a while since I've posted articles about my options trading. In fact, the last time I wrote about options was in January 2022! At that time, my all-time options income total was $80, 087.

Now my all-time options income total is just over $100,000!

I'm happy to say that I'm writing about options again! If you're interested in learning about selling options for extra income, please read this article at DivGro 2.0. 

DivGro 2.0 is a newsletter with free and member-only content. 

Is Selling Options Risky?

By Derek of Positively Passive Income

Whether you’ve been investing in stocks for a while or are just getting started, you’ve probably heard about options. And most likely, you’ve heard at least one story about an investor losing their shirt over an options trade gone wrong.

These kinds of stories lead investors to think that options are too risky, so they stay away from them and just focus on regular stocks or ETFs instead.

But what are options all about, and are they really as risky as people believe they are?  This post will explain how some types of options can be incredibly risky, and others, not so much.

Expired Options (January 2022)

I skipped posting articles about my options trading in December, choosing to take a break and reset things in 2022. 

Having failed to achieve my options income goal for 2021, I set a more modest options income goal for 2022, aiming to collect a total of $12,000 in options income by year's end. 

The market is quite volatile, with inflation concerns, upcoming interest rate hikes, and geopolitical tensions cycling as reasons for concern. Selling options can be quite lucrative in a volatile environment, but the accompanying risk should be managed carefully. 

In this article, I'm covering the options that were scheduled to expire on 21 January 2022. 

Expired Options (November 2021)

I try to post an article shortly after options expiration in which I report on expired options and any actions I took in the week leading up to options expiration. 

I missed doing so in October, choosing to cover October's expired options in my Options Update of September and October.

This article covers the options that were scheduled to expire on 19 November. 

Options Update: September and October, 2021

I've given up on achieving my options income goal for 2021 and decided to take things easy in the remaining months of this year.

While options trading is not my primary focus, I do enjoy the action of boosting my dividend income with options income. But it requires more time than I have available now. So, I'll be setting a more modest options income goal for 2022. 

I haven't reported my September trades, yet, so this update will cover both September and October's trades. As usual, the article provides my options income tally, as well as a summary of options that will expire in the next two months. 

Expired Options (September 2021)

Shortly after options expiration, I try to post an article to report on expired options and any actions I took in the week leading up to options expiration. 

The summer months have been busy and I didn't get around to doing this; instead, I covered expired options with my regular monthly Options Update articles. 

This article covers the options that were scheduled to expire on 17 September. 

Options Update: August 2021

After July's fiasco, I'm happy to say I made some money from options trading in August!

I've given up on achieving my options income goal for 2021. Instead, I'll take things easy in the remaining months of this year and set a more modest goal for 2022. 

In this month's update, I'll cover expirations and trades that generated new options income. I'll also report on a few options I'd closed early. As usual, the article provides my options income tally, as well as a summary of options that will expire in the next two months. 

Options Update: July 2021

Updating readers on my options trading activity has been a challenge this Summer. In fact, I haven't reported July's actions and it is almost time to do the same for August! Work has occupied much of my time, and some challenging times for our family have made things worse. 

June turned out to be a great month for options trading with $5,731 added to my options income tally. That raised my year-to-date options income to $10,908. 

Unfortunately, July's numbers are very poor, as I decided to buy back three deep-in-the-money, covered calls. This article explains the reasons and also the Lesson Learned... don't write covered calls on growth stocks you really want to keep! 

Options Update: June 2021 (Part 2)

As I mentioned in the introduction to Part 1 of June's Options Update, I've fallen behind on updating readers about my options trading activity. I've decided to skip June and July's Expired Options articles and rather capture all the details of June's trades and expirations in this two-part article.  

In Part 1, I covered assignments, expirations, and closed options, and provided a listing of options expiring in the next two months. June turned out to be a great month with lots of expirations, allowing me to secure $3,744 in options income. Additionally, I closed four options early, securing an additional $652 in options income. 

In Part 2, I'm covering rolled options and put options trades that generated income in June. 

Options Update: June 2021 (Part 1)

I've fallen behind on updating readers on my options trades. Work obligations and family matters have made it hard to keep up, so I'm foregoing June and July's Expired Options articles. But here, finally, is June's Options Update article!

In May I added only $501 to my options income tally, bringing the year-to-date total to $5,177. Given my goal of collecting $24,000 in 2021, this put me far behind the pace needed to achieve my options income goal.  

Fortunately, June was a great month and I made up some lost ground! In Part 1, I'll cover assignments, expirations and closed options, and I'll provide a listing of options expiring in the next two months. Part 2 will cover rolled options and put options trades that generated income in June. 

Options Update: May 2021

Welcome to my Options Update for May! 

A good month of options trading in April took me a little closer to my 

2021 options income goal of collecting $24,000 in options income, though I'll still need to collect an average of $2,416 per month to achieve it!

Unfortunately, last month's trading activity didn't help much and I collected less than $600. We'll see how it goes in June, which will bring us to the midpoint of 2021. 

Expired Options (May 2021)

Shortly after options expiration, I try to post an article to report on expired options and any actions I took in the week leading up to options expiration. 

Sometimes, an option is at-the-money or even in-the-money, and, consequently, the risk of assignment is high. To avoid assignment, I'd need to either close the option, or roll forward the option to a later expiration date. 

This article covers the options that were scheduled to expire on 21 May. 

Options Update: April 2021

Welcome to my Options Update for April! 

After reporting solid gains in my March update, I determined that I would have to collect $21,783 in options income in the 9 remaining months of 2021 to achieve my 2021 options income goal. That's an average of $2,420 per month. 

Well, I'm happy to say that with April's activity, I managed to collect $2,458 in options income. Not surprisingly, there are many transactions to report in this article!

Expired Options (April 2021)

After options expiration, I post an article to report on expired options and any actions I took in the week before options expiration. 

I used to write only one options article every month, but with the increase of my options trading in the last few years, those articles became unwieldy. So I've split my reporting up into two monthly articles, one shortly after options expiration day, covering expired options, and one after month's end, covering the remaining options trades. 

This article covers the options that were scheduled to expire on 16 April. 

Options Update: March 2021

Welcome to my Options Update for March! I've been quite busy at work, but the project I've been working on is wrapping up! So I'll have a little more time to write blog articles again...

I posted my February update just a few weeks ago and reported another poor start to my options trading endeavors in 2021. January "delivered" -$1,756 in options income and February delivered a goose egg! At least I did not dig the hole I'm in even deeper in February!

I'm happy to report that March turned out to be much better! In fact, I managed to fill up the hole and build a little mound! It feels nice to make some positive strides towards my annual options goal for 2021, namely to collect at least $24,000 in options income. We'll see how it goes!

Expired Options (March 2020)

I'm trying to catch up on my options articles. I just posted an update covering February's trades and hope to post one for March soon.  

Because my options trading has increased over the last year or so, I've split my reporting up into two monthly articles, one shortly after options expiration day, covering expired options, and one after month's end, covering the remaining options trades. 

This article covers the options that were scheduled to expire on 19 March. Most of them expired, but two were assigned just prior to or on options expiration day. 

Options Update: February 2021

I'm hoping to catch up with my Options Update articles, which have suffered because I've been so busy at work... 

I posted my January update on 3 March, which normally is when I would post my February update! Well, before the month ends, I wanted to get the February update out of the way!

With my Options Update articles, I keep track of my options income, summarize trades, and provide a running tally of DivGro's options income to date. 

I also track the progress I'm making towards my annual options goal. In 2021, I'm repeating my goal of collecting at least $24,000 in options income. Last year turned out to be a challenging year for options trading and I collected only $15,009 in options income (about 63% of my 2020 goal of $24,000).

Options Update: January 2021

I've been rather busy at work while still trying to keep up with my DivGro articles, but my Options Update series has suffered... I posted my last options update on 10 January, covering December 2020 trades. So I have some catching up to do!

With these articles, I keep track of my options income, summarize trades, and provide a running tally of DivGro's options income to date. 

I also track the progress I'm making towards my annual options goal. In 2021, I'm repeating my goal of collecting at least $24,000 in options income. Last year turned out to be a much more challenging year for options trading and I collected $15,009 in options income or only about 63% of my 2020 goal of $24,000.

Options Update: December 2020 (Part 3)

In Part 2 of my final Options Update article of 2020, I'm presenting two assignments, fifteen expired options, and my usual list of upcoming expiring options. Part 1 covered 23 trades in which I rolled forward options and Part 2 presented some closing trades as well as new covered calls and put contracts. 

December was a very busy month for options trading. After having failed to achieve my 2020 goal of collecting at least $24,000 in options income, I decided to reposition my options portfolio for the upcoming year. The net effect is that my options income decreased by about $889 and I ended with options income totaling $14,120 for 2020.