End of the Month Summary – August 2021

Sticking with last month’s theme, I’ll keep this relatively short because my right hand is still not anywhere close to 100% and I need to focus on my clients’ accounts over updating my blog. As luck would have it, I had no realized gains in August, so that makes this summary much easier.

I ended July with a Net Asset Value (NAV) of $136,923.22 according to Interactive Brokers (IB) after ending July with a balance of $135,632.37. That gives me a gain of $1,290.85 (~1%) on paper. I sold a QQQ covered call and a TLT covered put during August, which could both be closed this month, even though the QQQ option is for an October expiration. My TLT position cost me $5.17 in borrow fees and $18.17 in short dividend fees. My QQQ position earned me $39.68 in dividends. 

I’m not worried about the TLT position long-term since I’m only short 100 shares so far and my covered put premiums are paying for my short costs. I might sell another naked call before long to raise my cost per share if assigned or simply bring in more cash if not assigned. My QQQ covered call is in the money now, which is why I might deal with it this month and push it out further. QQQ is at the top of its ascending trading channel, which indicates it is likely for a pause, but not guaranteed. It can dip to $370 without breaking below its trend line of higher lows. It’s shorter trend line of higher lows would let it fall as low as $365 before breaking support. If I see QQQ close to $370, I’ll probably close my October $380 call for a small profit and wait for the rebound before selling another covered call.

I missed a great opportunity to sell naked puts on IWM and MDY and now I’m more gun shy than I was when it was cheaper. I’m up 9.54% for the year-to-date with very little risk. I’m on 27.16% invested in this account with nearly $100,000 sitting idle. That’s never good in a bull market, but with a son going to college next year and an ex-wife with Alzheimer’s, I’ve opted to reduce my risk dramatically. There are just too many variables at play to risk a substantial hit to my account balance. That said, $100,000 is excessive and I need to get on the ball with putting some of it to work in the very near-term.