Weekly Wheel Income - week ending October 24th

Goal: generate income to pay rent.

I’m about two months into this, and the simple goal is to pay the bills; to do that, I’m trying to make $ 1,000/week.

So far, this has been going well, but I’ve also learned a bunch from some too-aggressive trades where I got assigned.

Snapshot

(source)

What worked

• Juicy yields on Gold puts got me in the 2% weekly ROI range last week

• Going a bit further out of the money feels like a better balance of premiums collected and capital gains on the upside

What didn’t work

• Too aggressive ATM puts on GDX got me assigned with quite a high opportunity cost. The premiums were good, though.

Next week

• Don’t get carried away by juicy yields and stick to the plan of making $1000/week.

Income Summary (YTD)

• Total premiums: $7251

• Trades (opened/closed): 33/26

• Weekly ROI: 0.96%

Additional Notes

I’ve realised that I was only chasing high yields and forgot my actual goal of generating income. This has led to suboptimal trades and excessive risk.

I’ve now moved on to keeping track of this via Interactive Brokers statement uploads that break down my trades into Weekly, Monthly and Annual performance compared to a set income goal.

Let’s say I want to make:

$1,000 / week
$4,333 / month
$52,000 / year

For each of these, on a rolling basis, I can now keep track of how my week of trading goes and how that translates to months and a year.

Why worry about overshooting? Well, here in New Zealand, capital gains are taxed more favourably than options premiums (which are treated as income). So keeping my income at a level where it covers costs allows me to pay only as much tax as I have to.

Disclosures

Educational only. Not advice. Options carry risk. I may hold the positions mentioned.