Option articles newsflash

Well I have been thinking a lot about my option article series, one representing the actual positions and another one explaining my option strategy and learning curve. I have decided on stopping with the overview. It’s not really teaching anything and I was struggling on getting all the information in a readable format. As such it was just a spreadsheet with some of my gains and losses. While these can be interesting , my current way of thinking is I will post a blog as soon as I enter a position with and explaining why I think it’s a good idea.

Not as an advice that anyone should follow, just showing my thought process presented by a real life example. This combines the two article series in a more learning focused way. And it will save me a lot of hassle presenting large spreadsheets in a meaningful way.

Hopefully these adjustments will help the articles along.

Under 3 – Fourteenth week of training

Another week of training goes by, fast. The end of my training schedule is in sight. And so is the big day. The ultimate goal of running under 3 hours might in this instance be a bit of a stretch. My newly acquired long run pace has just been on the right level for a short amount of time. Too short in order to do a solid attempt at under 3. So this adventure will go on for a bit longer. But with the new way of training, the adjusted schedule and all things considered I have made some serious progress.

So I will go on and continue in this fashion. So how did it go this week? To be honest, it’s about time to run that marathon. Training went fine but the real drive is a bit lost, I am just excited to go out and run that marathon!

At the beginning of the week there was a bit of fatigue due to lack of sleep and therefore I had a bit of a hard time getting into the groove. Luckily after a few Km’s this mostly goes away and I have managed too run all planned runs. The longrun was not that long anymore with 24K so I had more time for recovery.

Yoga is still part of the routine and as I have said before whether it really helps or if it’s just in my mind, it works ! So I will keep practicing Yoga. One more week of training, then a restweek and then it’s the big dat. I for one can’t wait !

Small improvements , massive result

Striving to run a marathon in under 3 hours I discovered something new, well for me at least. I had read about it but never really given it any further attention. The large benefits of the small improvements you make if you do something long and consistent enough.

In sports it has been a thing for a few years now, make small improvements in a lot of areas and the sum will surpass anything. Which is off course true , mathematical speaking, take a spreadsheet and set a few numbers and keep adding 1% , compounding in action.

During my training it’s been evident that regularity in workouts is hugely important in getting the most small improvements. But here comes the kicker, for a long time you will not notice any improvements at all. It’s like being stuck, and all of a sudden there is this breakthrough moment. My times improved , tartrate dropped and recovery was shorter.

I am am nowhere near as data driven as a top athlete , but I just noticed the effect and it was significant.
Like it came out of nowhere. Which when you look at it, isn’t true. The consistency and persistence combined with a slow and gradual increase of volume in training has made this possible. But at first there is a whole lot of time were you notice nothing of great significance, it’s just maintaining your condition it seems and not moving forward at all. This is a dangerous point, you get demotivated and you start focussing on something else. Or you quit.

During my revalidation it was always hammered down that you should celebrate small victories, I was mostly frustrated because I was not achieving my bigger goals. I tried and compensate it by working harder and having draw backs. Finally I kept my schedule and things improved. Still not too my liking and my real breakthrough moment never really came.

In hindsight it was just the amount of time that was simply too short, you can’t do that much in a year and I have to get back to the drawing board and see how I can get at these small improvements by means of regularity and slowly increasing my load. I am stuck in a vacuum of no progress for some time now. At one hand that could be it, I am at my maximum in recovery, but I believe in something better.

The running is the proof for me. And while thinking about this subject it really applies too all things that are hard in the beginning. Or stay hard for a long . long time. Take learning how too read for example, or paying off a huge debt. In the beginning nothing real seems too happen. All the effort looks worthless. But then there is a moment it all takes off. The ball starts rolling , and then it goes really fast.

What I have learned , it’s more important too regularly work on a goal and grab the small improvements. Than try and sprinting towards it. Persistence is key , it should become a habit and not a burden.

Let’s get more small improvements!

Under 3 – Thirteenth week of training

Another week in the bag , in other parts of my daily life things were very hectic and this week I really needed the running to keep it all together. Fortunately I was able to digest all the runs planned and I am really getting the benefits of the small and incremental improvements I am making. All these little things are adding up and are playing a big part in my overall condition and health.

This week also marked the last of the big long runs, 34 kilometer in this case, now the schedule gradually winds down in the coming weeks , the milages still is pretty substantial in the coming week just divided over more days.

I am really amazed by all these shall we say 1% improvements that starting to appear. It has inspired me to write an upcoming blog on the importance of small and continuous improvement. It really adds up.

The 2 weeks ahead are still in full swing of training, but it slowly depreciates in volume and after that it’s recovery and then it will be time for the Dusseldorf marathon, and I have too say , I am excited !

March 2019 – Dividend

Another month has gone by, time flies and all that. And as every month , another bit of dividend came rolling in. It doesn’t take up a minute of your time and yet it gets you a bit of money. Pretty nice !
Comparing this year with last year , Royal Dutch Shell is missing, I am on route in making my portfolio more environmental friendly and durable. So Shell was sold. I’m aware most of the oil and gas company’s are still in the ETF’s I hold and I am now figuring out more durable ETF’s.

The rest of the list is made up of the usual suspects , see the overview. See you next time !

DateStockCurrencyAmount
29-03-2019Unibail-RodamcoEUR5,40
20-03-2019Unilever EUR7,74
15-03-2019
DowDupont incEUR3,36
14-03-2019MicrosoftEUR8,14
TotalEUR24,64

Fear

Fear, my biggest fear ? Losing control, or more accurate losing the illusion of control. I have always wanted too have as much control over my life as possible. More often than not pushing it too the extreme. Combining this with setting high demands for myself and big goals, I made it quite difficult for myself to really have control. Not in ways of getting towards my goals but controlling myself.

Eventually my biggest fear became reality, I now only have limited control over my life. The daily condition of my brain determines what I can and cannot do that day and it makes for a lot of unexpected moments. Offcourse I do all I can controlling this. It’s my nature.

The difference with the past is I am not trying too force this at all costs. All I can do is plan well , exercise and train well and rest. Controlling everything simply costs too much of my valued and scarce resource , energy.

It had taught me that living in the moment is very valuable, you simply cannot control every aspect of your life. You can work on creating the conditions and environment too increase your chances of achieving your goals, and thats an attitude I recommend too everyone. But in the end you are reliant on so many factors and moments that there is a point at which it simply does not make sense trying to control more. You end up in an illusion, and you keep pushing for more influence on a increasingly smaller effect on the outcome of events.

Energy better spend on fun things in life, or activity’s which you can do in reaching your goals. Not just trying too control everything.

It’s strange how you always fall back on old instincts , which have taken me far in life and still my discipline , controlling nature and perseverance take me far today. But in the past these attributes were in my way a lot of the time. It backfired numerous times when achieving my goals. Controle became a goal in itself. There was no more logic.

Now there is more acquiescence, frustration about my failing brain is still there, and also acceptance is a long way down the line, but this has given me the insight in the simple fact you can better put your energy in little steps towards a goal , the using it too control stuff you can’t. Or obsess over details. Problems will arise anyhow, and when they do , I will deal with them.

My life has a lot more direction and focus , and is more relaxed than it used too be. Everything is a bit smaller, at a lower pace. Unnecessary fear is bad guidance , and working at overcoming this fear is a very valuable side effect too my brain damage. I doubt if I would have ever gotten it otherwise.

Februari 2019 – Option positions

Time for another update on the options trading part of my portfolio. On January the 18th all my options positions endend worthless. Which was fine by me because I wrote them, so all the premium was collected. The total for January is 19,14 , which is not a lot but it’s the first run of the experiment, so I am very cautious.

For the expiration on the 15th of March the following positions have been added. Writing 2 calls on parts of my positions in BAM and Aegon, which will bring in 20 euro’s and some sold puts on Philips. I was a little too late for Februari, so March it was.

I have adjusted the table accordingly for a complete overview of all my trades so far. Now it’s a matter of getting more knowledge about riks and modeling risk in order too get more out of it. For now I will remain at my 100% covered strategy. And as all learning and reading goes extremely slow in my case, this will probably stay that way for a while.

Total for January : 19,14

Date position openOption QuantityPriceTotal amountBuy / Sell End dateTransaction costs
Open/ClosedResult
03-01-2019Ahold Delhaize Put 19.00 18 January 201914,004,00Sell18-01-20190,85Closed3,15
18-12-2108Bam Put 2.20 18 January 201915,005,00Sell18-01-20190,85Closed4,15
5-12-2018Philips Put 29.00 18 January 2019 113,0013,00Sell18-01-20190,85Closed12,15
04-01-2019Aegon Call 4,50 15 March 2019210,0020,00Sell15-03-20191,7Open
07-01-2019BAM Call 3,00 15 March 2019210,0020,00Sell15-03-20191,7Open
22-01-2019Philips Put 24,00 15 March 201917,007,00Sell15-03-20190,85Open
30-01-2019Philips Put 30,00 15 March 2019120,0020,00Sell15-03-20190,85Open

2019 goals

A new year and new goals, this will be my first time setting goals , up until now I mostly used to do lists and loosely set goals. Resulting in missing real focus. In turn running up the to do’s on the good old to do list.

First up the finance side of tings. Which can be roughly divided into 2 parts, mostly cost reduction and building wealth. The easiest way for reducing costs is paying off the mortgage which is the only and biggest debt. Last year saw the biggest reduction so far. It’s so easy it’s hard not simply keep on doing it. However I am now at a point which all the alternatives in the market, renting or buying another house will be more expensive. I have no way of living any cheaper. The mortgage needs paying off so I will continue doing the extra payments but the focus needs too be on other more lucrative investments. So the goal for 2019 is paying off an extra 1200 euro’s. That’s it.

Which leaves the other part , my stock and ETF portfolio. A fixed amount will be added each month, divided over ETF’s and handpicked company’s. In which dividend payments will be one of the main factors, as part of my passive income strategy. My goal is getting my dividend payments up too 1500 euro’s per year. In 2018 the total got over a 1000 for the first time, 1021,80. A small milestone. Let’s see if my new goal is achievable.

Something new I got into in 2018 and developed more during the year is options trading. Which turned out too be the suprise of 2018. I used too write options every now and then on stocks I wanted too buy, not really consistent and just for fun. Mostly I didn’t get the stocks and I tried again. After some time I started making this a more systematic approach and I also started writing options on stocks I had in my portfolio.

At the end of 2018 I also started using part of my cash buffers as collateral for writing options. Usually you will have a good idea which part of the buffers you don’t need in the coming month, so it’s pretty safe using a part of this as a way for generating extra returns.

All in all this approach yielded a nice 10,21% return on risked capital. Not shocking in the option trading world but for me an encourachement for learning more about it and applying this in 2019. I will write about my learning process in the option series on this blog.

So 3 finance goals, keep downsizing the mortgage , generate more passive income and enhance the result with option trading.

But without my health all the money is worthless. 2018 has been a year with a few stark reminders of my permanent brain damage. I took on too much in some instances and got into a few nasty periods afterwards. 2019 is all about finding and keeping the balance again and really accept my new me. I can’t keep going on adding more work each time until I crash. The focus will be on being stronger, training the left side of my body and going back too the start of my revalidation process and taking and celebrating small steps forward. I will elaborate more on this in coming blog posts. For now have a very good 2019 !

December 2018 – Dividend

Final month of 2018. And the final monthly dividend report for this year. The Stockmarket has tanked last few months which leads too all sorts of speculation and doubt, for my strategy it’s not important. For I am still in the building up part of the process. Time in the market is far more important than timing the market.

The dividend this month is less then December 2017, because I sold Shell in the summer. So we are down 67%. Green costs money ;). This will be corrected next year because the money went into other dividend paying company’s. Overall the dividend in 2018 is up 27% compared with 2017. Which is pretty good. It’s motivating.

We will see what 2019 will bring.

The numbers:

DateStockCurrencyAmount
20-12-2018Vanguard dividend appreciation ETFEUR1,51
18-12-2018Icahn Enterprises LPEUR1,53
14-12-2018DowDupont EUR3,33
14-12-2018Coca-ColaEUR5,13
13-12-2018Microsoft EUR8,07
05-12-2018UnileverEUR3,87
TotalEUR23,44

Options – What’s are options ?

Options, a very nifty and useful financial instrument which can be traded on all sorts of exchanges. In this new series I will start from the beginning and will explain what options are and how we can use them in our portfolio’s. Ok let’s start.

An options is the right too buy or sell a product for a set period of time for a predetermined price. Most people’s only experience with an option is when they take out an option on a house. For a fixed period the buyer has the right to buy the house at the agreed upon price without the seller having the option selling the house to someone else. Most of the time this is done for the buyer figuring out finances and seeing if the house is structurally sound. These conditions enable the buyer that if one of these non binding conditions apply they don’t have too buy the house. (This is the way it’s done in the Netherlands , maybe this will differ per country. But you get the idea, I hope)

With this option comes a risk, if there is no non binding reason for the buyer getting out of the deal, they either have to buy the house or pay a 10% fine, which means 10% off the agreed upon price. So there is also an upside for the seller. He/she knows they either sell the house or get 10% in such a case.

The risk for the seller is this, in the meantime they can loose possible other buyers and when the markets are hot they might miss out on the rising prices in the period the option on their house is valid. And if the deal falls trough they can start all over again finding new buyers.

An option is comprised of a set of attributes, an end date , an underlying product (stock, house, commodities , etc) an a fixed price at which the underlying product can be bought or sold.

Trading options can be done on all sorts of (financial) markets, but most well known are stock options. Which will be the main focus of this series.

You have 2 types of options. One gives the right too buy stocks , named call options. The reverse, a right too sell stocks is called a put option. Let’s look at them with a simple example.

Call option :

An option is being noted (mostly) as, AH C20.00 21DEC2018, which is Ahold Delhaize, Call 20 Euro , 21 December 2018.

The first part is the name of the underlying stock, in this case Ahold Delhaize. Followed by the price at which the option can be exercised, 20 Euro’s in this instance. Last but not least the end date of the option. The date on which the option expires, and becomes worthless.

Also worth mentioning, 1 option will give you the rights on 100 stocks , so in this case you can buy 100 stocks Ahold at a price of 20 euro’s each, before the option expires on 21 December of 2018. A total of 2000 Euros worth of risk. Options generally end on the third Friday of each month.

Put Option :

Essentially the same principle, just another right, one too sell instead of buying. It’s presented in the same way, AH P20.00 21DEC2018, Ahold Delhaize Put, 20 Euro, 21 December 2018. This is again a right for 100 stocks, Ahold in this case again, a sell right for 20 Euro each.

Well so far we have learnt a Call gives a buy right, a put a sell right. But when there are buyers there must be sellers. Together they make the market. Buying an option will cost you a premium. As expressed in the option price you see when looking up an option on the exchange.

You can look at the option price as an insurance premium, you will pay every month on your car insurance. The insurance company is the seller of the option (insuring your car against the risk of damaging it). And you are the buyer. You cover unexpected damages and events and in return you pay a monthly fee (the premium). The insurance company now takes the risk that if you have an accident they will have to pay for the damages. You are insured against these risks for a certain amount of time (mostly a year).

The premium or price of an option is changing a lot faster then the premium of your car insurance. But the same principle applies. A seller makes a risk analysis with selling the option and gives a price too the buyer. The option buyer insures the fact he can buy or sell the underlying stocks at the price of 20 Euros, until the expiration date. The seller has too buy or sell them too the buyer at this price.

The option price is determined by the price of the underlying stock, the distance too the strike price of the option (the 20 Euro’s) and the time left in the option, i.e the number of days , hours minutes until the option becomes worthless. Other factors are interest rates, dividend payments and overall sentiment in the market.

Where do people use these options , or insurances for ? Well, that will be the next item in the series. For now just let the characteristics of options sink in.