Welcome to my second ever options income monthly update. The new site is gaining a nice following. It’s seems that many dividend growth investors are starting to test the options waters. Many of them have followed me to this site. I think it’s a good idea to earn both dividend and options income. Hopefully more DGI bloggers take to options, so we can call share ideas, wins, and losses.
Before I get to the update, I’d like to thank Scott from Two Investing. Scott created a slick options tracking spreadsheet. He was kind enough to let me be a beta tester. I’ve been using the spreadsheet for a few weeks and I love it. 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.
Options Income – October 2016
In October, I had 21 options contracts closed or assigned. 3 contracts were assigned and I bought to close 18 contracts. I earned a total of $2,025.72 in net revenue this past month. It’s the amount of money I earned after trading and transaction fees, losses from closed contracts, and any other miscellaneous costs. The breakdown of income and expenses, is as follows:
- Total Revenue: $2,918.17
- Losses: -$636.17
- Fees: -$256.28
- Net Revenue: $2,025.72
Option Contracts – October 2016
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 to learn more about why I bought, sold, or closed contracts.
I also earned nearly $500 in dividend income this October. Checkout that post over at Investment Hunting.
Options Income Reporting Change
In my September monthly update post, I was accounting for options revenue differently than I have in this post. Many readers commented that I was doing it wrong. “It takes a big man to admit when he’s wrong, I am not a big man.” Just kidding, I was wrong. I do agree that their way is the correct way to track options income. BTW – That was a classic 80’s movie quote. Can anyone guess the film and the star who quoted it?
I used to account for profits at the time of contract sale. However, after listening to many an options expert, I’ve changed my accounting of options income. I now account for income as it’s realized. 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. Overall, it’s mostly a wash. Money moved around and was realized in different months.
Regardless of accounting methods, the past two months have been my best options income months. This is because I’ve dedicated a bit more time to the study of options, and I got lucky. Yes, sometimes options do require a little luck. I reported September options income of $1,163.34. The amount is incorrect. Under my new accounting method, I earned $1,395.36. That was a nice win for me. Of course other months that I thought were profitable were not.
Thanks to the following for showing me the options income accounting light ;-).
Do you buy or sell options? How much was your options income this month?