January 9, 2023 Happy New Year, everyone! I haven’t written any updates on my put-writing strategy in a while, so I thought this is an excellent opportunity to review the year 2022 performance and some of the changes I have made since my last write-up in late 2021. Let’s take a look…
May 3, 2021 Welcome back to a new installment of the options series! In the discussion following the previous post (Part 6), a reader suggested the following: In recent history, the index has never lost more than 50% over the span of one year. Then why not simply write (=short) a put option, about one … Continue reading Passive income through option writing: Part 7 – Careful when shorting long-dated options!
October 18, 2021 After three posts in a row about safe withdrawal rates, parts 46, 47, and 48 of the series, let’s make sure we have the right level of diversity here. Welcome to a new installment of the option writing series! I wanted to give a brief update on several different fronts: Let’s dive … Continue reading Passive income through option writing: Part 8 – A 2021 Update
November 10, 2021 Welcome to a new post in the Put Option Writing Series. My blogging buddy Spintwig volunteered to perform another backtest simulation. If you remember from Part 5, he simulated selling 5-delta and 10-delta put options going back to 2018. He now added 18 more months of returns to go back to September … Continue reading Passive income through option writing: Part 9 – 2016-2021 backtest: Guest Post by “Spintwig”
December 9, 2021 Last month, I published Part 49 of my Safe Withdrawal Rate Series, dealing with leverage in retirement. In that post, I surmised that the cheapest form of leverage likely comes in the form of a margin loan in an Interactive Brokers (IB) account. If you have the IB Pro account you have … Continue reading Low-Cost Leverage: The “Box Spread” Trade
February 22, 2021 In late January, I wrote about my thoughts on the crazy wild ride in GameStop and some other meme stocks. Now might be a good time to do an update to talk about some of the other things I learned. For example, how a short-interest ratio of more than 100% is surely … Continue reading Is a short-interest ratio above 100% really that scary? The GameStop Saga Part 2
Update (February 8, 2021): Well, there you have it, GameStop is back closer to reality at around $60 as of today. It lost 80+% from the peak value. Who would have guessed that?! January 30, 2021 Wow, what a week! I was reminded again why I prefer to be an index investor (for the most … Continue reading My thoughts on the GameStop volatility
All parts of this series: Trading derivatives on the path to Financial Independence and Early Retirement Part 1 – Intro Part 2 – Extended Intro Part “2.5” – Trading like an Escape Artist: October 2018 update Part 3 – Strategy details as of 2019 Part 4 – Surviving the 2020 Bear Market! Part 5 – … Continue reading Passive income through option writing: Part 6 – A 2018-2021 backtest with different contract sizes: Guest Post by “Spintwig”
July 5, 2022 Over the last few decades, we’ve become accustomed to a negative correlation between stocks and U.S. Treasury bonds. Bonds used to serve as a great diversifier against macroeconomic risk. Specifically, the last four downturns in 1991, 2001, 2007-2009, and 2020 were all so-called “demand-side” recessions where the drop in GDP went hand-in-hand … Continue reading Hedging Against Inflation and Monetary Policy Risk
June 10, 2020 Welcome back to another post dealing with an investing strategy that’s central to our own retirement strategy here in the ERN household. Just a bit of background, about 35% of our financial net worth is currently invested in this strategy. But it accounts for more than 50% of our taxable assets, so … Continue reading Passive income through option writing: Part 4 – Surviving a Bear Market!