Well it is that time once again, it is not a paycheck Friday this week. No money is going into the accounts, that is why this is an off-week. Lets recap what is going on at the start of the trading day today and then I’ll get to the ramblings.
First up the Taxable account. On a side note, I am working on getting a set structure for everything, I broke out a checklist of what I wanted to say Wednesday and I decided to always run through the accounts in the same order so it will be Taxable, Options, and then Rollover. Anyway, the $26 covered call is currently sitting OTM this morning. I considered a rollout down to $25.50; I decided against it. I have looked at rolling a few different things especially over in the Options IRA since I have some deep ITM options over there and I always come back to the same point. The premium upfront and the potential growth return in the case of covered calls met my goals at the time of writing the option, so there is no need for adjustments. And the growth returns are just a bonus, the real point at keeping track of this is to make sure when the stock does eventually get assigned I actually made money.
Moving on, the Options IRA has 4 covered calls all ITM this morning 2 OKE $40 and 2 KR $32.50. OKE is deep ITM by a few dollars, I’m feeling pretty confident that it is going to be assigned, KR is about a $1 so less confident but pretty sure it will. Once they are assigned I’ll have a roughly $14K hole to fill in the account, and I think I am going to sell my first put. IBM has some crazy premiums for its puts right now over $3.00 for ATM puts, thats over 2% just in premiums on capital invested for a one week option. I don’t know how much that will drop between today and Monday, you’ll have to check back on Wednesday to see what ends up happening with that.
Finishing up with the Rollover account, out of the 3 calls expiring this week currently only PBCT is ITM. If it sells I will probably use the proceeds to buy more IBM. I have 68 shares and I can’t sell options on it until I have 100. I am also looking at the idea of selling off my position in IBM and doing a buy-write on something within my price range. Just to get over into weekly options sooner.
That’s the state of the accounts, on to the ramblings section, we took out some money last year when we refinanced the house with the intention of building a detached garage in the back of our lot. I was in talks with a guy to build a pole barn style garage and that fell through shortly before winter. Now, I did drag my feet a little bit, and long story short I still have no garage, and we are sitting on a lump sum of money. We then started looking at the idea of just paying off the house so that she could step down to a part-time job and spend more time at home with the kiddos. While we have been beating this idea around I have been thinking about changing companies as well. The good thing about being a truck driver is you’re only going to be unemployed if you want to be, and I’m not really fond of my current employer. I already have a comfort number, which is what I like to bring home every paycheck to maintain my current standard of living. Anything above that is split up between savings and the Taxable account already.
The next thought then becomes; At what point can I start replacing work income with investment income…
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