DGI Adventure – 07-01-2016 Month in Review – June 2016

June was not boring. The market was not boring, and the wizards were not boring. The transfer of the beneficiary IRA to interactive brokers was completed just at the end of May, so I had a whole month to be active, and I took advantage.

Also a bunch of racist rubes in England turned the world on its head for a couple days. That presented some pretty nice opportunities.

Let’s take a look at the month that was.

Portfolio Summary

A quick comment on allocation classifications: Last month I said I was going to classify the cash set aside to secure short put contracts as “other”. I’ve changed my mind about that. The exposure is essentially to the underlying security, so if I sell a put against a stock, that “investment” is in equities. If I sell against a REIT, I’ll use “other”…although Morningstar considers REITs “stocks” when describing the holdings of mutual funds…aaargh.

Another comment on projected annual income: I’m projecting put writing income based on the premium “annualized”. So if I get a premium of $100, and the option is in force for 42 days (0.1150685 years), I would project the annual income to be $869.05 per year. This means my “projected income” will float around a little bit more depending on how many trades are in force at any given time.

Finally, a quick comment on market versus invested value of these option trades. I’m not factoring in the short cost of the actual options themselves. Like at time of writing my WHG Aug19 $50.00 put contract supposedly has a “market value” of -2.65/share. That’s what it would theoretically cost to buy back the option and close the position. I’m not trading. I don’t plan to buy back that option and close the position. I’m going to let it expire and it will either end up worth nothing, or I will get assigned shares. So the value of the contract itself is irrelevant. The market value of the secured cash is equal to the invested value so long as the option is out of the money. If it’s in the money, I correct the market value based on the difference between market price of the underlying and the strike. Hopefully that makes sense.

Stock Purchases

11 stocks purchased. 10 new positions, 1 position increased. Projected annual income increased by $1,553.70 based on current dividends.

06/02/16 – MIN: 400 shares purchased @ $4.565/share. New position initiated. Increased projected annual income by $168.00 based on current dividend of $0.42/share annual dividend.

06/02/16 – EAD: 200 shares purchased @ $7.855/share. New position initiated. Increased projected annual income by $163.20 based on current dividend of $0.816/share annual dividend.

06/02/16 – BLW: 100 shares purchased @ $15.1686/share. New position initiated. Increased projected annual income by $104.40 based on current dividend of $1.044/share annual dividend.

06/02/16 – PFL: 200 shares purchased @ $10.155/share. New position initiated. Increased projected annual income by $216.00 based on current dividend of $1.08/share annual dividend.

06/02/16 – EGF: 150 shares purchased @ $13.633/share. New position initiated. Increased projected annual income by $88.20 based on current dividend of $0.588/share annual dividend.

06/02/16 – BKT: 250 shares purchased @ $6.525/share. New position initiated. Increased projected annual income by $79.50 based on current dividend of $0.318/share annual dividend.

06/06/16 – CIK: 500 shares purchased @ $2.9454/share. New position initiated. Increased projected annual income by $132.00 based on current dividend of $0.264/share annual dividend.

06/21/16 – PIM: 400 shares purchased @ $4.3533/share. New position initiated. Increased projected annual income by $124.80 based on current dividend of $0.312/share annual dividend.

06/21/16 – PPT: 300 shares purchased @ $4.735/share. New position initiated. Increased projected annual income by $93.60 based on current dividend of $0.312/share annual dividend.

06/24/16 – MSFT: 100 shares purchased @ $50.50/share (put option assigned). New position initiated. Increased projected annual income by $144.00 based on current dividend of $1.44/share annual dividend.

06/24/16 – VLO: 100 shares purchased @ $53.00/share (put option assigned). Added to existing position of 26 shares. Increased projected annual income by $240.00 based on current dividend of $2.40/share annual dividend.

Pay Days and Raises

Dividend Income Tracker is published back at the mothership.

Total investment income of $1,187.35, but only $52.94 of which was in taxable accounts. I count 19 “pay days” with 32 individual payments received.

I will get back to comparing income from month to month in the next update. It just doesn’t make sense right now with the big capital gain skewing last month’s report. This marks a 191% increase over the income from June 2015.

GILD dividend payment is a $0.04/share increase of 9.30%.

I initiated positions in 9 out of the 10 CEFs I plan to invest in. Only 4 of them paid their dividend in June. The other 5 paid today, so that income will fall into this coming month. I still need to start a position in DSU, which pays at the end of the month, so that should bump July’s income as well.

Also, I have 8 put options expiring in July, so hopefully there will be equally good opportunities to replace that income. Hard to imagine another big market shift like brexit…but you never know.

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