04 Jan 2022 - New Year New Plan

 Happy New Year everyone! 

As explained previously, this year I want to continue to focus less on investing (i sux at it) and more on life. Hence, to make investing simple, I will be simply doing long-term covered calls at a high strike price. This will allow me to be able to hold onto the stocks and collect passive income. However, the downside is, of course, the passive income will be lower. 

The good thing about this is that I won't need to look at the stock market daily and don't have to worry about the price going up or down. Should the price surge then hit the strike price, then congratulation to me too as I will be making realized gain. If the price goes down, then I simply wait till the call option expires before selling another one. 

Does it mean I am not adding more fresh funds into investing? Hell No! Money is getting smaller day by day. Hence, I am 100% sure that I will deploy them into the stock market. Just that, I foresee my income will get lower this year as I am not planning to perform side gigs this year. My daily expenses and mortgage loan will need to be from my income. So I doubt I have that much to deploy as compared to past years. 

So to recap, this is simply, invest - small passive income - to enjoy life. 

Cheers :D 

25 Dec 2021 - My potential gain/loss

After my previous post, I receive some emails asking me what do I mean when I do a long-covered call. Well, basically I sold a covered call that expired a few months later rather than on a weekly or monthly basis. There is downside potential to this but there is also upside potential. 

Allow me to explain the 3 stocks that I am holding. 

Apple

I sold a call option that expires on 18 March 2022 with a strike price of 190 USD. I received about 366 USD as a premium. If Apple closed above 190 USD per share on the expiry date, then I will have to sell my Apple shares which I have no qualm over it as my average price is now 168 USD per share. Anything way above, I will be missing out on a lot of potential gains. The reason why I choose to go for a quarterly contract for Apple is that the price movement is more predictable. Hence, come March 2022, if Apple is trading around 180 USD level, then I can simply sell another contract for the next quarter. 

Citigroup

For Citigroup, I sold a call option that expires on 17 June 2022 with a strike price of 75 USD. As price movement for bank stocks tend to be less volatile, the premium is usually lower. So rather than allowing the stock to sit in my portfolio and do nothing, I collect premium by selling a contract that I believed the price won't be achieved. I might be wrong and if Citigroup closed above 75 USD during expiration, I will still make a capital gain. 

Grab Holding

Grab is the only "gambling" company that I am holding. I want to hold it for the long term but I don't know if I have the guts to do it. Hence, I sold the call option that expires only on 20 Jan 2023 with a strike price of 15 USD. For this stock, I am doing it slightly differently. I will also buy a call option at a higher strike price like 25 USD. So in the event Grab closes below 15 USD, I simply continue my covered call. If Grab somehow goes between 15 USD and 25 USD, then my money will still be somewhat double as I will sell my Grab at 15 USD. If Grab close beyond 25 USD, I will still make money because of the call option that I am holding. 

Conclusion

I won't go into details for China Portfolio as they are pretty much the same. The only difference is that they are on a quarterly basis. I have no idea where to deploy any fresh funds yet as I am thinking of venturing into a small business. Hence, I may save up my fresh fund instead for a business venture. 

Merry Christmas and a Happy New Year !