My account ended December with a Net Asset Value (NAV) of $139,917.15 according to Interactive Brokers (IB) after beginning last with a balance of $125,000. I had a gain of $14,917.15 (~11.93%) on paper for 2021 (below the Dow’s 18.73% gain and the S&P’s 26.89% gain). My TLT position held me back. I had a realized gain of $2,124.52, but carried a paper loss of $522.71 into this year. I also paid $389.07 in short dividend and interest costs. The main issue with that position is that I held back too much cash to cover it when I could’ve been invested in equities more.

So, another year and another set of lessons learned. I was smart to limit my realized gains to only $3,445.83, but would’ve had more money post-tax if I had traded more while the economy continued to rebuild. To help push me to trade more in 2022, I just deposited $10,082.85 to bring my beginning balance for 2022 up to $150,000. This increase in value gives me more room to diversify. I’d love it if some of my favorite ETFs, like SPY, MDY, and IWM would split so I could still use options and have it take up a smaller percentage of my account.

As my son gets ready to go off to college, I’m planning to sell my house this summer and have a long vacation planned to go back to Greece. I’m going to continue adding miles on my running shoes and at the same time I plan to put more energy into my investing. I don’t expect 2022 to be as good for the broader market as it was in 2021, but I think I can earn $15,000 (10%) if I put more time into my own account. I thought we’d get at least a 10% correction last year and wanted to be ready to jump in deep when it hit, but it didn’t. I need to up my risk tolerance and can always add on margin if we get a good sell-off while I’m short on cash. I’ll feel better about that approach when I know where my son is going to college and how much it’ll cost me.

I wanted to hold the option until it expired today, but didn’t want to lose more on the rally. The ETF closed Wednesday at $396.91, and I felt I made the right move. Then it gave it all back on Thursday when I could’ve saved a few hundred dollars on closing the covered call. Again, this morning, QQQ sank, but then turned positive. I’m writing this with less than 30 minutes to go in the trading day and see I could’ve gotten out of the option for $1.25 if I had waited.

That’s spilled milk now, but I had to make my trade when I did based on the information I had at the time. I could’ve done worse and could’ve done better. I didn’t want to wait to make the trade because the risk of assignment and then having to pay taxes on more than $16,000 in capital gains. I plan to continue holding onto QQQ into 2022 and maybe much longer. At least it’ll be a long-term gain when I sell it, but even at a 20% tax rate, that’s a chunk of change.

QQQ was trading at $369.32 when I sold the covered call and brought in $372.60. The difference between my sale price in October and my purchase price today gives me a realized loss of $348.97 on the option and an unrealized gain of roughly $1,700 on the underlying shares. I can live with that for two months of investing.

Knowing those two contracts weren’t at risk of being assigned, I sold new options this afternoon. I replaced my TLT covered put and sold another TLT naked call. Then I came back in a few minutes before the close and sold an IWM naked put.

While TLT was trading at $148.44, I sold one TLT January $151 naked call for $2.09 and received $208.41 after paying $0.59 in commission. A few minutes later, while TLT was trading at $148.49, I sold one January $141 covered put for $1.15 and received $113.98 after paying $1.02 in commission. I’m calling this a “covered” put because it covers my 100 shares short position. If assigned, I’ll be forced to buy shares to cover my short. If the naked call is assigned, it’ll bring my average cost per share higher on my short position which will make it easier to sell future covered puts at higher strikes.

My ABNB November $150 became nearly worthless a couple weeks ago when ABNB gapped higher. I didn’t bother covering the naked option because I saw no reason to spend a few bucks for something that would be $0 within two weeks. Instead of replacing this position with another ABNB put, I decided to wait for ABNB to retrace its gap a little more before I get back in. Instead, I sold an IWM put since it’s down 5% from its recent high. While IWM was trading at $232.60, I sold one IWM January $230 naked put for $7.58 and received $757.42 after paying $0.58 in commission.

If IWM stays above my strike at expiration, I’ll earn 3.4%, 19.67% annualized. The small-cap ETF can only drop 1.12% for me to earn a full profit, but it can drop 3.4% before I take a loss. From its peak on November 8, it can fall 9.01% before I take a loss. I’m comfortable buying 100 shares if it’s down 9%. While it could fall sharply from there, I don’t see how I’d be at risk long-term and I’m still far underinvested in this account. If IWM does drop 9-10% from its peak, I think I’ll sell another naked put to couple with this one.

I ended October with a Net Asset Value (NAV) of $138,204.76 according to Interactive Brokers (IB) after ending September with a balance of $136,013.22. That gives me a gain of $2,191.54 (~1.61%) on paper. I had one QQQ October $380 covered call expire worthless and sold a replacement for December. I also sold an ABNB naked put and a TLT covered put. I missed out selling an IWM naked put as I planned to do. My TLT position cost me $6.81 in borrow fees, $18.31 in short dividend fees, and $7.04 in short interest. The premiums from my covered puts are covering the short fees, plus a little extra. My QQQ shares paid a dividend of $41.39.

I still plan to add more exposure, but I could see another pull back hitting stock soon. That’s based on trend lines for small to mid-cap stocks. Large caps might have more upside potential, especially if tech stocks can shake off some of their recent doldrums.

I chose the $385 strike because it is just above the highs QQQ bounced against the first week of September. I could see the ETF pushing back to that previous high, and maybe a touch higher, before taking another breather. If I’m wrong, I’ll still earn 5.11%, 29.88% annualized, from the share price when I made the trade. That would be a gain of $1,891.32 more than I had when I made the trade. If my option is not exercised and it expires worthless, I’ll make 1%, 5.83% annualized, on the option premium alone.

QQQ will have to break above $388.69 for me to take a loss on the option if I want to close it before expiration. I probably would roll it for a loss if it’s in that range the week before expiration because I would have an unrealized gain of more than $16,000 on the shares by then and I have no desire to take that gain in the final month of the year. I’d rather roll it into January at the earliest and avoid paying taxes on the gains for one more year. Luckily, it will be a long-term gain whenever I do sell the shares, but that doesn’t make me want to pay a few thousand in taxes for an investment I’m happy to hold for the foreseeable future.

While I was in a trading mood for this account, I decided to get back into Airbnb since it’s off its highs from a couple weeks ago by more than $10. While ABNB was trading at $166.23, I sold one ABNB November $150 naked put for $4.36 and received $434.95 after paying $1.05 in commission. If ABNB doesn’t fall more than 10.09% by expiration, I’ll earn 2.98%, 23.15% annualized. ABNB can fall 12.69% further from the current level before I lose any money.

ABNB just fell below its 200-day moving average, which isn’t bullish, but I don’t expect it to fall more than 10% below this longer-term moving average. That sets up my strike as a reasonable area of support. Also, the 100-day moving average is a little above $150, which should act as further support if the stock makes it that low. I’ve drawn some trend lines marking the higher lows from the past few months and see potential support at today’s low and again close to $160 if it gets there by the end of the week. The 50-day moving average is close to this lower trend line, so it could add more support too.

I’d be happier if ABNB showed earnings, but I think they’ll get there sooner than later and I want to be in the stock when that happens, even if I have to be patient longer than I’d like.

I ended September with a Net Asset Value (NAV) of 136,013.22 according to Interactive Brokers (IB) after ending August with a balance of $136,923.22. That gives me a loss of $910.00 (~0.66%) on paper. Outside of my single day trades mentioned above, I had one TLT $140 covered put expire worthless and did not sell a replacement. My TLT position cost me $6.43 in borrow fees, $18.93 in short dividend fees, and $5.61 in short interest. The premiums from my covered puts are covering the short fees, plus a little extra.

I do need to sell another covered put on my short TLT shares, especially now that the share price has dropped nicely. My QQQ October covered call is out of the money nearly $15 and is only worth $0.20 as of today. I won’t bother closing it until I have a plan to replace it. I’m hesitant to do much else with such a skittish market lately. Before I sell another covered call, I’ll probably sell a naked put on MDY or IWM.

I ended July with a Net Asset Value (NAV) of $136,923.22 according to Interactive Brokers (IB) after ending July with a balance of $135,632.37. That gives me a gain of $1,290.85 (~1%) on paper. I sold a QQQ covered call and a TLT covered put during August, which could both be closed this month, even though the QQQ option is for an October expiration. My TLT position cost me $5.17 in borrow fees and $18.17 in short dividend fees. My QQQ position earned me $39.68 in dividends. 

I’m not worried about the TLT position long-term since I’m only short 100 shares so far and my covered put premiums are paying for my short costs. I might sell another naked call before long to raise my cost per share if assigned or simply bring in more cash if not assigned. My QQQ covered call is in the money now, which is why I might deal with it this month and push it out further. QQQ is at the top of its ascending trading channel, which indicates it is likely for a pause, but not guaranteed. It can dip to $370 without breaking below its trend line of higher lows. It’s shorter trend line of higher lows would let it fall as low as $365 before breaking support. If I see QQQ close to $370, I’ll probably close my October $380 call for a small profit and wait for the rebound before selling another covered call.

I missed a great opportunity to sell naked puts on IWM and MDY and now I’m more gun shy than I was when it was cheaper. I’m up 9.54% for the year-to-date with very little risk. I’m on 27.16% invested in this account with nearly $100,000 sitting idle. That’s never good in a bull market, but with a son going to college next year and an ex-wife with Alzheimer’s, I’ve opted to reduce my risk dramatically. There are just too many variables at play to risk a substantial hit to my account balance. That said, $100,000 is excessive and I need to get on the ball with putting some of it to work in the very near-term. 

While TLT was trading at $145.92, I sold one TLT September $140 put for $0.69 and received $68.37 after paying $0.63 in commission. I almost went out as far as October for this trade, but decided I could either get my shares sold sooner or roll the put early and make a little more money. I expect TLT to fall back into the low $140s, but not sink below $140 before the September expiration. If that’s the case and TLT is lower in five weeks than it is now, I’ll be able to sell my next put for a higher premium and might even sell at a lower strike too.

While QQQ was trading at $367.05, I sold one QQQ October $380 covered call for $4.64 and received $463.39 after paying $0.61 in commission. Since QQQ is my only equity position, I didn’t think I should sell my call too close to the money. Not counting the premiums I’ve received, I would have a realized gain of more than $15,000 if I sold my shares at $380. I’ve held these shares for over a year, so it would be a long-term gain, but I still don’t want to be forced into paying taxes on a position I’m comfortable holding. That means, if it looks like the call might be assigned, I’ll probably roll it higher. The good news is that if it does get called away before I can cover the option, I’ll be above my goal of gaining 10% on the year, assuming TLT doesn’t go haywire again.

I still want to add more exposure elsewhere and have been considering an IWM naked put, but would rather see IWM’s chart improve before I make that trade. IWM is stuck between its 20 and 50-day moving averages. A move below its 20-day, closer to its 200-day moving average could be a much better trade.