Cashflow Report – Portfolio Income During November 2012

Welcome to the Investing for Cashflow Report – November 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” (hat tip to Pat Flynn over at Smart Passive Income). 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 November 2012

The general markets (DJIA, NASD, SP500) recovered from the October downtrend, making their way back to their respective 50 day moving averages.

Insights & Lessons Learned in November

I learned that my trading system isn’t as automated as I thought. I spent most of the month away from my trading desk, and subsequently missed out on some opportunities. This is a big miss because the market has been so choppy; opportunities have a very high probability of being short-term. On the plus side, I may have missed an exit signal as well, given my time constraints and inability to monitor the market daily.

Cashflow Report – Portfolio Income During November 2012 – Breakdown:

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 = $2.30
Dividends = $0.00

Cashflow = $224.35
Estimated October Capital Gains/Losses = ($278.94)

Goal Not Achieved

The month ended with TMF below my purchase price. My account balance shows a loss because the option premiums weren’t high enough to offset the loss in ETF value. This seems to be a recurring theme this year!

Bar chart showing year to date returns from covered calls

GOAL: 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

With all the fiscal cliff talk, it is hard to separate the wheat from the chaff, so to speak. The markets have been in rally mode since the middle of November, volume has remained lower than average. To me, this indicates a lack of selling, rather than a large amount of buying.

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

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