Cashflow Report – Portfolio Income During June 2012

Welcome to the Investing for Cashflow Report – June 2012 Edition!

Each month, I review the portfolio income (i.e. paper income or income from investments) created from trading covered calls and create a “cashflow report”. Analyzing trades is something every investor/trader should do on a regular basis, so this is my attempt to practice what I preach. The reports do the following:

  1. Help me track my progress towards financial independence
  2. Maintain my focus on increasing paper income and meeting my goals each month
  3. Provide an example of creating an income from investing/trading (actually making money!)
  4. Get your feedback on ways to improve


Overview of June 2012

June was similar to May, which was similar to April, which was similar to…it just hasn’t been a great start to the year for my covered call experiment.

The general markets have trended downward since mid-March, and subsequently DRN, EDC, ERX, and FAS became unplayable (generated a sell signal in my trading system). TMF emerged with the only buy signal, and as a result, my cashflow are based on that position only.

Lessons Learned in June

Long term success requires different methods at different times. After taking a look at my performance to goal for the first 6 months of the year, it is clear to see that my system has not worked very well since the March-April time-frame (March cashflows were good, but that also means that my positions were set going into April). The general stock markets peaked in March and have fallen since.

A key part of my strategy is consistency (Consistent = Sell covered calls profitably in all market conditions). Based on 2012, my current strategy is yielding positive results only when markets are rising. When markets are falling, the price drops in leveraged ETFs wipe out any potential for positive cashflow from selling calls.

On the positive side, my added attention to capital gains (or avoiding capital losses) has kept losses small so far this year…much smaller than had I tried to sell calls as the leveraged ETF’s fell. I haven’t gone “all-in” either, so I do not know the monthly cashflow I can expect to achieve. It could be large enough to cover months when I am out of the market, which would make these periods easier to stomach.

Cashflow Report – Portfolio Income During June 2012 – Breakdown:

Realized Paper Income Gains

DRN-Direxion Daily Real Estate Bull 3X (ETF)

Premiums = $0.00
Dividends = $0.00

EDC-Direxion Daily Emerging Markets Bull 3X (ETF)

Premiums = $0.00
Dividends = $0.00

ERX-Direxion Daily Energy Bull 3X Shares(ETF)

Premiums = $0.00
Dividends = $0.00

FAS-Direxion Daily Financial Bull 3X Shares(ETF)

Premiums = $0.00
Dividends = $0.00

TMF-Direxion Daily 20+ Yr Trsy Bull 3X Shares (ETF)

Premiums = $593.67
Dividends = $0.00

Realized Cashflow = $593.67
Capital Gain = ($760.22)
Profit = ($166.55)

Goal Not Achieved

Portfolio Income for June 2012 - Investing for CashflowGOAL: Execute a covered call trading strategy that creates profit greater than $3,600 USD per month and deposits $3,600 USD per month into an expense account, for 3 months straight.

The Road Ahead

Add June to the “bust” list; 3 straight months with capital losses gobbling up premiums generated by selling calls.  Again, I’m still in the black for the year (~5k) in terms of trading, but my monthly withdrawals ($21,600) have taken a rather large chunk of my trading capital.

July will start out in a confirmed uptrend (per IBD), given it is a holiday week, trusting the market action will be difficult.

Related Posts


About T. Knight
Blogging about my journey to financial independence via investing for cashflow.

One Response to Cashflow Report – Portfolio Income During June 2012

  1. Juhty says:

    There are three different Income Tax rates on UK dividends. The rate you pay depends on whether your overall taxable income (after allowances). dividend income

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s

%d bloggers like this: