2020: August

Monthly Portfolio Chart

I knew having a baby would change things, and one of the most obvious things to change is the amount of time I have to write blog posts. As much as I love producing content for Dividend Brothers, it falls pretty low on my list of weekly priorities. To be fair my trading has slowed down quite a bit as well, so I don’t have as much to write about every week either. All that to say, I’m changing the publishing schedule of my trade updates from weekly to monthly. This is a change that I’m quite sure will largely go unnoticed by most.

So in the future, the good readers of DividendBrothers.com can expect a monthly dividend update, a monthly trading update, and an occasional extra blog post (like my most recent one on Cryptocurrencies.)

Recap Since Mid-July

  • July Realized P&L: + $21
  • August Realized P&L: -$91
  • Trades Closed: 6

Hot off the success of selling two credit spreads in IWM at the end of July, I started August off essentially falling flat on my face. The credit spreads I had sold were a week out and were bearish. Thinking I had a good feel for what IWM was doing, I sold an Iron Condor for two weeks out and shortly thereafter IWM began to climb. It blew right past my upper leg and showed no signs of returning. I took a loss of $71 on that trade.

I sold my old Nokia Call right at the start of the month. I felt like Nokia had made all the moves it was going to for a bit. That netted me a profit of $26.

After my IWM Iron Condor failed, I was desperate to keep my two month streak of realized profitability going so I sold my last Ford $7 Call. Profit of $50.

I was back in the green for the month. However, the market was climbing steadily back toward all time highs. At this point my portfolio was already off balance, leaning bearish. If I had stopped to think for a moment and glanced even briefly at the simplest of line charts for the market, I would have known exactly what side of the trade I wanted to be on. Instead, I saw the freight train roaring down the tracks and decided I could step in front of it and make it stop. It turned out exactly as you might expect.

person standing in front of a train

Train = SPY

Person = Me

I made three mistakes. 1) I tried to predict the market. 2) I went against the trend. 3) I was revenge trading.

When SPY got back to the mid-330’s, I thought surely market cannot surpass the all time highs set pre-pandemic. Boy, was I wrong! That was my first mistake. Then, I didn’t check to see what the trend had been since March. If I had bothered to look, I would have seen this:

Does that look like a chart you would bet against? ‘Nuf said . . .

Finally, I was revenge trading from my earlier loss in IWM. I was thinking, If I successfully sell a credit spread for $30 or more, I will still be able to end the month with a positive realized P&L. I was trading what I wanted to have happen. I was not trading what was actually happening. Well, I sold that Credit Spread for $32, and yesterday I “bought it back” for $100. Loss of $68

My last trade of the month was to sell one of my two $10 Calls in Ford. I made $2 profit on it. As totaled above, ended August with a realized P&L of -$91.

Current Positions

F $6 Put | 9/18 Exp · 2 Buys | -$52.00
F $5 Put | 9/18 Exp · 2 Buys | -$38.00
FCX $16 / $17 Calls | 10/16 Exp • 1 Debit Spread | +$15.00
NOK $4 Put | 10/16 Exp · 5 Buys | -$11.00
GE $11 Call | 1/15/2021 Exp · 2 Buys | -$32.00
NOK $7 Call | 6/18/2021 Exp · 1 Buy | +$2.00
F $10 Call | 6/18/2021 Exp · 1 Buy | +$2.00

Total Unrealized P&L: -$114

Closing Thoughts

I took a couple of hefty blows in August. My portfolio is in rough shape, and I’m biased in the wrong direction. That being said, I learned and relearned a couple of valuable lessons. I’m trying some new things and overall I feel optimistic for September. My goals are to scale back my short positions, stay on the right side of the trend, and focus on making good trades vs. chasing profits. Thanks for reading!

Leave a Reply

Your email address will not be published. Required fields are marked *