Should be enjoying a relaxing break; instead spending too much time worrying about the fact that I don't have my next contract lined up. Was supposed to be last Tuesday, but "government gonna government' so contract negotiations pushed back to Jan 8. Meanwhile, I'm hanging out on the bench...losing motivation. At least, I've used a lot of that time to catch up on reading books, studying options trading, etc. But an idle mind can be dangerous sometimes. I went out on a 1 hour jog just go clear my mind...great...but then I did my normal stress eating to break-even. Not good. I don't like my work but I definitely want to be doing something rather than nothing. I have PTO until 2021 that I am using.
Times like these always make me run excel scenarios and all that good stuff. Looking at my brokerage $175k...realizing that 2% returns a month can generate $3,500 ...just enough to cover all of our expenses, short-term capital gains taxes, and added health insurance (from now having a job anymore) for family.
Seems ... possible...with very good day-trading skills / options trading.
But that would be 24% a year annual returns. Certainly not feasible without repeated risks...and on a long-term basis; just a few bad trades and my ROI requirements go up each month... No such thing as a free lunch after all.
What has been fun is thinking about how I would go about implementing this.
I guess what I would do is use all of my capital and just sell cash-covered puts on one good stock with medium-high IV I would not mind being assigned if it happens. Perhaps Apple would fit the bill perfectly. Could sell at the 0.30 delta maybe?
With one stock, this would be very easy to monitor progress....but risk would be high. In practice, would probably split this up between several good stocks...(good in this meaning something I would not mind getting assigned). And close out 50% in profits and collect premiums randomly as 'buy to close' triggers. If assigned, I would immediately start selling covered calls at the 20 to 30 delta. Repeat the process. This is 'running the wheel'. Could even consider buying LEAPS on the stocks just assigned and using that capital to cover the short legs (Poor Man's Covered Call).
A simple example with just Apple:
Current Stock Price: $130.96
AAPL 01/22/2021 $126 PUT
Value: $1.95
Delta: -0.30
1 contract ties up $12,600 and generates $195 in premium.
With $175,000 in capital; I could afford 13 contracts (rounded down)
Selling 13 CSPs would generate $2,535 in premium.
Not enough
Lets try the -40 delta.
AAPL 01/22/2021 $129 PUT
Value: $3.09
Delta: -0.40
1 contract ties up $12,900 and generates $309 in premium
With 175,000 in capital; I could afford 13 contracts (rounded down)
Selling 13 CSP would generate $4,017 dollars
More then enough, and if I sell to close at 50% profit, I would have some leftover premium to even build on principle in my portfolio. But then I would lose half my premium closing out the option and I would have to open another one immediately to get more premium.
Anyways that scenario was fun but just another thought I had...which is duh obvious to most readers here...who says I need to have just one income source to implement a life away from the 9-5 grind?
Maybe...
Job 1: I do options day-trading to generate a more realistic 0.50%-1% return a month ($875 to $1750)
Job 2: Odd jobs on weekends to get cash (For instance, the local nursery needed weekend help for a Christmas sale)
Job 3: Some sort of online freelance work
Job 4: A part-time consulting gig instead of full-time consulting gig.
Sort of a hustling lifestyle I guess. Something I've never done before.