This week, the stock market has been a bumpy ride for all investors/traders, but at times like this it’s important to take the long view. Sticking to your financial strategy and remaining focused on your goals are critical to achieving the long-term investing results you desire. As a reader of Main Street beats Wall Street, you know my 2018 goal is a little different than 2017. To reiterate, my 2018 goal is to make a $3000 profit a week, and taking a draw from my trading account of $4000 a month as a salary. I did take $4000 for January. $4000 was transferred from my trading account to my personal checking account on 1/30/18. With this wild week I only locked in a profit of $1500 which you’ll see below. I’m not really worried about not hitting my goal this week because I’ve had some pretty good weeks so far in 2018 to easily average over $3000 a week. In fact, even with my slow start to the year I’m still averaging over $5500 of locked-in profits per week. See my Trade History 2018.
In addition to these goals for 2018, I’ve added my “Gift Account.” This account is my own little fund separate from my trading account. I’ll be buying small amounts of stock with the profits from my trading account and transferring them into my “Gift Account.” This gift account will be a long term investment account. Some of the stock in this gift account will be given as gifts to younger family members on special occasions. The remaining stock, not gifted, will remain in the account for long term for growth. Please take a look at my “Gift Account,” it is growing. Again, all stocks was purchased with profits from my trading account. No additional money added!
I love my trading and I feel I’m doing nicely, but as I get older I want to limit my trading account to between $100,000 and $200,000 and put the profits into a more conservative, long term account. Along with this, I take my $4000 a month and move some into my Roth IRA and personal savings at the end of the year. We all must develop our own strategy according to our own situation. Please read my page Developing a Philosophy and other pages under Philosophy, Strategy & Risk.
With this very bumpy, volatile week I only made one trade. I saw an opportunity to sell a 20 contract Call on my 2000 shares of RH. I picked a Strike Price where I felt I wouldn’t get assigned. I didn’t want to get assigned because the stock was below my buy-in price. The trade worked in my favor. I brought in a $1500 premium and I wasn’t assigned. I keep my premium and I keep my stock.
2/6/18 – Sell to Open 20 RH 2/9/18 $97.00 C @ 75¢ (+$1500)
2/9/18 – Expired 20 RH 2/9/18 $97.00 C
Profit +$1500
Be very clear, just because I locked in $1500 on my one trade doesn’t mean my account went up $1500. I did lock in $1500 and put it in my mattress but the 3 stocks I’m holding, AMD, RH and MU are all below where I bought. With this crazy week I think pretty much all stocks are below where they were a few weeks ago. I still own the stock and let’s hope we get a big rebound very soon.
Total Weekly Gain +$1500
For new readers, if you have any question with my options lingo or moves I make, please send me an email.
Have a great weekend!
Steve
The Options Coach