Monday, 28 September 2015

September 2015 Portfolio



Month of September
September... The most awaited month of the year. This is the month where we have the annual Singapore Grand Prix. Most interesting event was the moment the safety car was activated because of the track intruder… This post was supposed to be up on the 3rd Saturday of the month which happens to also be The F1 weekend of Singapore. But I was involved with F1 and the photo uploads and so I had to postpone the posting till now.


Stocks 

This post is quite depressing as this is the first time this account has been down by 20%. This was partially due to the fact that while the stock returns were still acceptable, my arrogance in the stock option markets was the nail in the coffin by having too many positions. When the correction came, the account did not have enough margins to carry the positions. It was also partially due to the fact that I panicked and closed the positions at a huge loss instead of waiting for all the noise to clear.

Looking back I had to make a call either to get out of the market or to wait and see. I chose to get out simply because I did not know what was going to happen and when the position was bad, we just have to get out preventing further complications.

That being said, I learnt a very valuable lesson to have positions in either stocks or options and not both. Currently I am selling weekly options while waiting for a profitable position to enter.


Net Asset Value

December 31, 2014
September 23, 2015


Total
Long
Short
Total
Change
Cash
3,840.72
8739.75
0
8739.75
4899.04
Stock
7,429.46
0
0
0
-7429.46
Options
0
0
-13
-13
-13
Interest Accruals
0
0
0
0
0
Total
11,270.18
8739.75
-13
8726.75
-2543.42

Time Weighted Rate of Return
-22.57%

Open Positions
Symbol
Quantity
Cost Price
Cost Basis
Close Price
Value
Unrealized P/L
Equity and Index Options
AAPL 25SEP15 110.0 P
-1
0.9490453
-94.9
0.13
-13
81.9
Total

-94.9

-13
81.9



Dividends

No dividends collected this month.

12/02/2015
AAPL(US0378331005) CASH Dividend 0.47000000 USD per Share (Ordinary Dividend)
17.86
12/02/2015
AAPL(US0378331005) CASH Dividend 0.47000000 USD per Share - US Tax
-5.36
4/6/2015
ALK(US0116591092) CASH Dividend 0.20000000 USD per Share (Ordinary Dividend)
10.60
4/6/2015
ALK(US0116591092) CASH Dividend 0.20000000 USD per Share - US Tax
-3.18
Total Dividend 2015
$19.92


Options on Futures 

There was a spillover effect since the last posting and a major loss was taken on the 24th Aug when the market had the biggest drop since the inception of this account. I was not paying attention well enough and all of the profits were returned within 1 day. I manage to recuperate a tiny portion of the portfolio. I also had to rollover 1 position due to the sudden rise of Crude Oil.

This showed the importance to always be covered for unexpected corrections and never be fully invested when using margins. It also prompted me to rethink spreads that are considered safer as they cover both sides.

The net effect of September was negative after closing 4 positions at a significant loss. I still have contracts for Crude Oil and Natural Gas set to expire in the next 1-3 months as of this writing.

Contracts Expired

Jan 2015
$802.50
($1402.5 - $525 + $225 - $300)
Feb 2015
$1,187.50
($1725 - $537.5)
Mar 2015
$1,502.50
($612.5 + $650 + $240)
Apr 2015
$433.00
($265 + [$192 - $185] + $161)
May 2015
$1,066.00
([$470 - $20] + [$280 - $10] + [$111 x 2] + $124)
Jun 2015

$689.00

($420 + $150 + $135 + $300 + $380 + $54 + $56 + ($240 - $300) +
($57 - $123) + ($420 - $880) + ($220 - $440)
Jul 2015
-$1,237.50
($300 + $315.5 + $112.5 + $112.5 - $500 - $468.75 - $456.25 + $30 –
$880 + $70 + $5 + $92.5 + $42.5 - $10)
Aug 2015
$475.00
($140 + $300 + $170 + $75 + $150 - $500 + $480 + $372.5 + $110 +
$140 + $130 + $300 - $2062.5 + $750 + $340 - $420)
Sep 2015
-$4,682.50
($360 - $3925 - $680 - $1470 + $300 + $20 + $562.5 + $330 + $275 +
$30 + $130 + $45)
End 2015
$235.50



Total Invested Capital
$10,000.00
Starting Capital of 2015
$10,670.00
Cash and Sweep
$12,064.63
Total Gain/Loss YTD
$235.50

2.21%


Investing Wolf 
Disclaimer: This is not a recommendation to buy or sell any mentioned stocks or securities in this blog. 

4 comments:

  1. Hello Investing Wolf,

    I guess you now can appreciate what LP and I meant about the differences between the effects of compounding and "getting" compounded returns ;)


    Ah! I see you are reflecting and learning more about the Money Management part of the 3 Ms of Method, Money, Mind.

    There is the money (loss) management part on individual positions, and there is the risk management part at total portfolio level.

    Have fun figuring out what not to do and what you can do better the next time?



    P.S. You didn't quite get what I meant the last time with my comment: "Options on futures?"
    This time I think I'll speak a bit plainer:

    Options can be used as a outright directional trade, as part of an hedging strategy, or for "income" to pocket the premium since most options expire worthless.

    Options are a "cheap" way to buy "insurance" on existing stock positions- so stocks and options can go together; as part of risk management.

    Similarly, options on futures can be used to hedge against out-sized losses on futures positions.

    That's where my comment comes in - was "poking" they don't look like hedging positions...

    ReplyDelete
  2. I have to agree that there are many factors to determine if we can profit consistently. I made an error to assume that I can comfortably earn a consistent % a month without taking into consideration of the worse case scenario and make preparations for it.

    I've learn the 3Ms from all the books I've read a few years ago. And I've been applying them as often as i can remind myself. Hence the decision to cut loss when the position turned unfavourable.

    I'm sorry that I misinterpret your comment and thanks for making it clearer for me. Yes, you are right. These options on futures positions are not hedging positions. They are only for income purposes and I am only waiting for them to expire.

    I am starting to dwell into the possibility of selling calls and puts on stock options to generate a sort of rental income. It was due to the large amount of contracts that I did in the past month that cause the huge drop in the stocks account when the positions went against me.

    I do not have any futures positions as I believe they are quite leveraged and I have never taken the effort to really study too much into them. Hence the options are not a hedge for those positions.

    ReplyDelete
    Replies
    1. Investing Wolf,

      I'm more the futures guy when it comes to trading ;)

      It's fun and interesting to mix with different traders and learn about their different trading vehicles and trading styles.

      I see you are heavily into the selling of options to pocket the premiums ;)

      You play the "insurance company" role here.

      Definitely have to watch your loss and risk management here as you don't want to be in the same position as AIG during the subprime crisis ;)

      Delete
    2. I agree with you SMOL :) The insurance company style works only with appropriate risk management and learning from previous losses.

      It is very interesting that someone is into futures... maybe someday can meet for a cup of coffee and I can learn about futures from you ... :P

      Delete