Financial Freedom Sloth

achieving financial freedom one lazy step at a time

Special circumstance investing – April update

I am still waiting to be able to sell the UVXY put I bought at a profit. I know this eventually will happen as the UVXY is guaranteed to lose value. But I must confess I am not a fan of the product. The liquidity is so low and spread so big on the options on this, that selling it is not always a given. I find this annoying so once I exit this position I will probably not do it again. It is an almost certain way to make some profit. But the annoyance I have with the product and the fact that you can only deploy limited money in it (due to the low liquidity of the options) make it unattractive for me.

What did I do?

The two put options I wrote on ABI have expiration May. Strike is 100 euro, current price 103 euro, there is only two weeks left and the dividend has been paid. I am almost 100% sure these puts will expire worthless. So I am letting them run their course but I did write 2 new puts, again strike 100 but expiry July. I explained last month why I prefer not to get assigned but I do not mind picking up another 400 euro. And the cash I have is really working hard for the next two weeks. It is

A) insurance if I have to unwind my leveraged position -buffer there is still healthy-

B) covering the put that expires in May and

C) covering the put that expires in July.

I love it when my money works hard since it means I can be lazy 😉

Do not forget I earned this cash by creating a leveraged construction in January. So this is money I earned by borrowing money. This why I keep it in cash so I can unwind the leveraged position if necessary. But thanks to these puts on ABI the cash will have earned 5% in the first half of the year!

I have also been day trading a bit in April. I started with Monsanto as I found that very safe due to the offer by BASF. Volatility was a bit low in Monsanto so it didn’t make a very good day trading stock. But I did make a bit of a profit on it and by some dumb luck I happened to have a position in Monsanto when it went ex-dividend. Hooray for a lucky extra 210 USD! I switched to Google afterwards which turned out to be a good choice. Current total profits of day trading are 2.250 USD which is exactly the amount I needed to bridge the difference between unemployment benefits and my previous wages (not a coincidence!). Since I am now working again, day trading activity will be very sporadic (the evenings my girlfriend has to work until 22h). But I am going to try to continue, so I can speed up the home renovations a bit.

Update: the 2 new ABI puts didn’t actually go through so they have been replaced by 5 contracts on ADM (Archer Daniels Midland Company), strike 40 and expiry June. Full explication in the comments, grr how does work dare to intervene with my investing!!

The girlfriends portfolio

I did a merger arbitrage play on Monsanto in the girlfriends portfolio at 1x leverage. Now I have to confess, I can be a bit pushy when it comes to investment stuff. So I kind of just did it, and then went and explained it. Thing is, my girlfriends ethical side is a lot more developed than mine. Which means that ethics play zero role in deciding where the money goes. The only deciding factor is if I can make a profit at a low risk. Actually, if it didn’t carry those big expense ratio I would have bought a bit of the Vice fund for the sole reason to annoy some of my friends. It turns out that for my girlfriend it does matter where her money is invested.

So she actually wasn’t too happy to be invested in Monsanto and to profit of the merger. So after hearing her compalin about it for almost two months, I have unwound this arbitrage play. With a profit of course, and after the dividend pay out!! But at a lower price than the current one, so her ethics have cost her over 400 USD already. And it will cost her more as I am still convinced the merger will go through! But hey, a happy girlfriend makes a happy sloth. And a 1.200 USD profit in less than 2 months isn’t bad either.

Since she didn’t have any leveraged position any more I did do some day trading in her account also. Profits there are around 500 USD.

As said, I am working again so for May i just hope to finally be able to sell the UVXY puts and do a little bit of day trading if I feel like it after a loooong day at the office.

6 Comments

  1. Nice trading results…. Need to do a talk on those! Abi puts are in my portfolio as well. Slightly lower strike. I might add to abi this week.

    Good to have a job again, that helps the renovation and stash building

    • Abi reacted great on the results today… I bought back my puts

      • finan112_wp

        May 4, 2017 at 6:49 pm

        It would cost me 20 euro to close the may ones but since I have more than enough room in my margin I will let it run it’s course and pocket the 20 euro also.
        And don’t talk me about the great results today!! I had not yet sold the puts for July, I wrote about it, then gave in the order and then realized Euronext was already closed (that’s what i get for working all day). So i let the order stand, thinking I would tweak the price a bit from work in the morning but A)I can not access the lynx site from the work desktop B)it would not have made a difference if I could have as ABI shot straight up at opening!
        So I just sold 5 contacts on ADM (Archer Daniels Midland Company), strike 40 and expiry June. Only 175 USD premium and not the 400 euro form ABI but the option is also 1 month shorter so let’s hope i find something nice in June to make up for those 225 euro’s. Work is allready costing me money, grr!!

    • finan112_wp

      May 4, 2017 at 6:54 pm

      It will help for the renovation but for the stash? Not so sure, I think it would grow more if I was home everyday and had more time looking for investment opportunities …

  2. What, no longer a lazy boy? Darn paid employment 😉
    Nice trading indeed, thanks for sharing some insight.

    • finan112_wp

      May 4, 2017 at 6:55 pm

      Darn indeed, I was enjoying my little interim ‘retirement’, snik, snik …

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