Income Investing Results

I've been wanting to learn more about muni bonds, even though the income is not at that level for us yet
maybe good time to start that bucket any thoughts on were one can find the opportunities for calif?
appreciate all input from the ER group
 
LTSTRYAGIN said:
I've been wanting to learn more about muni bonds, even though the income is not at that level for us yet
maybe good time to start that bucket any thoughts on were one can find the opportunities for calif?
appreciate all input from the ER group
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Are you a Fidelity client?
 
LTSTRYAGIN said:
yes and found this CALIFORNIA EDL FACS AUTH REV REF REV BDS05.00000% 11/01/2030UNIVERSITY OF THE PACIFIC SER. 2015
CUSIP 1301786V3
maybe good start
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You more than most would benefit from buying state specific bonds because of the high state tax.

A few things and you may know these already. There are muni revenue bonds and general obligation bonds. Revenue bonds are funded from the income stream of the entity. General Obligation bonds or GO bonds are funded by the tax base. So revenue bonds will pay more due to the higher risk, but they come with less options for funding.

Secondly, the bond you selected could be called as early as November.

Lastly, muni bonds rarely default. They are second only to treasuries in terms of safety, however the last default report I looked at showed that the few defaults were from senior centers and education. Something to keep in mind.
 
thank you no i didn't know ... need to get more bond education, as these are an arena in themselves
seems like most have a call option every 6 months
any basic metrics i should prioritize for a prospect?
will look for something outside of education opportunity thanks
 
LTSTRYAGIN said:
thank you no i didn't know ... need to get more bond education, as these are an arena in themselves
seems like most have a call option every 6 months
any basic metrics i should prioritize for a prospect?
will look for something outside of education opportunity thanks
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If you use Fidelity to screen CA bonds click the link in the lower left of the screening tool that says “show more criteria”. You can pick call options and call dates there. It will help narrow things down. I see CA has over 14,000 bonds on the secondary market. That’s a lot to go through.
 
For the past three+ years, I became a dedicated income investor, i.e. all new purchases are mostly dividend equities and bonds. Annual projection for the next 12 months:
80,830 Coupons
96,884 Dividends and MM interest
Currently I DRIP and my coupons and SS covers living expenses.
No option plays for me outside of dedicated sector option funds.
 
I'm not a muni guy because my (and actually almost no) tax bracket makes muni tax-equivalent yields competitive with taxable, but leveraged muni CEFs come closer. They also have the benefit of professional portfolio and credit management in the muni minefield.
 
I own some muni CEFs to juice my cashflow. The downsides are:
There is no par. So you have to live with the floating NAV. There is no (almost) guarantee of return of capital unlike an individual bond.
Returns are not locked in. So your interest payments may change over the course of ownership.
I personally have both laddered indi bonds for locked in cashflow and for greater security of principle. CEFs lay on top for leveraged cashflow.
 
Div's so far in April seem to be hitting the mark. With the remaining ~$5k already 90% Declared, I think will be able to use 50% for some re-investment assuming we don't continue this run-up. :ROFLMAO:

1745499794101.png


Flieger
 
April options income is likely to push me over $100K in options income YTD. The volatility worked to my advantage, at least so far. The best part is that it is unlikely that any of my shares will be called in April.
Here are some summaries of my options income progress and some MTD April dividend income as well.
2025-04-24_2025-Dividends-Options.jpg
2025-04-24_2024-2025-Options.jpg
2025-04-24_2020-2025-Options-Income.jpg
 
Waynew said:
April options income is likely to push me over $100K in options income YTD. The volatility worked to my advantage, at least so far. The best part is that it is unlikely that any of my shares will be called in April.
Here are some summaries of my options income progress and some MTD April dividend income as well.
View attachment 55340View attachment 55341View attachment 55342
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Thanks Wayne. I’ve been reading your website. Having 6 grandkids of my own I appreciate your desire to help them skip some of the mistakes we made early on. (Like getting scared after the 2000 meltdown and buying a variable annuity)
 
Waynew said:
April options income is likely to push me over $100K in options income YTD. The volatility worked to my advantage, at least so far. The best part is that it is unlikely that any of my shares will be called in April.
Here are some summaries of my options income progress and some MTD April dividend income as well.
View attachment 55340View attachment 55341View attachment 55342
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Love to see it, Wayne. Awesome to see the increase YoY. Looks like you are really hitting your stride and have things dialed in.

Been enjoying reading your blog this week. Noticed I was able to make it as a quote on one of the posts :)
 
Waynew said:
April options income is likely to push me over $100K in options income YTD. The volatility worked to my advantage, at least so far. The best part is that it is unlikely that any of my shares will be called in April.
Here are some summaries of my options income progress and some MTD April dividend income as well.
View attachment 55340View attachment 55341View attachment 55342
Click to expand...
Wow. I need to figure out your strategy. What amount of capital are you writing these options on?
 
Quattro73 said:
Wow. I need to figure out your strategy. What amount of capital are you writing these options on?
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The amount of capital is not the most important factor in my success in trading covered call options. Far more important is the nature of my holdings. Most ETFs only trade monthly options and mutual funds are useless. I don't own any mutual funds and zero bonds or bond funds.
There are several stocks that trade weekly options, and those are the ones that make the most profit because you can trade with a shorter time horizon. Most of my options trades are on my traditional IRA, which is our largest account. It holds about $1.7M in assets and 95% of those assets are stocks with a good slice of ETFs like VYM.
 
Waynew said:
The amount of capital is not the most important factor in my success in trading covered call options. Far more important is the nature of my holdings. Most ETFs only trade monthly options and mutual funds are useless. I don't own any mutual funds and zero bonds or bond funds.
There are several stocks that trade weekly options, and those are the ones that make the most profit because you can trade with a shorter time horizon. Most of my options trades are on my traditional IRA, which is our largest account. It holds about $1.7M in assets and 95% of those assets are stocks with a good slice of ETFs like VYM.
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Hi - Just wondering if you do only weekly options or other durations as well. What are some of the parameters you use in selecting, e.g. implied vol, strike price, stock price trend, etc. Thanks for your time.
 
UnLiberate said:
Hi - Just wondering if you do only weekly options or other durations as well. What are some of the parameters you use in selecting, e.g. implied vol, strike price, stock price trend, etc. Thanks for your time.
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The key factors I consider are (using Fidelity ATP and Seeking Alpha) are the next earnings date, Ex-Dividend Date, trend of the current trading, probability of being called (from ATP), QUANT rating (Seeking Alpha), and the support/resistance values. Some of this is "art" based on experience. I have been trading options since 2020, so I learned a lot the first year that helped me see what worked and what was less profitable.
I do some monthly options, but they are far less profitable and usually less desirable for significant per trade income.
I watch the bid/ask values for the trades and try to hit the midpoint or slightly higher. Most of the time that results in a sale above the current "bid" price.
 
Waynew said:
The key factors I consider are (using Fidelity ATP and Seeking Alpha) are the next earnings date, Ex-Dividend Date, trend of the current trading, probability of being called (from ATP), QUANT rating (Seeking Alpha), and the support/resistance values. Some of this is "art" based on experience. I have been trading options since 2020, so I learned a lot the first year that helped me see what worked and what was less profitable.
I do some monthly options, but they are far less profitable and usually less desirable for significant per trade income.
I watch the bid/ask values for the trades and try to hit the midpoint or slightly higher. Most of the time that results in a sale above the current "bid" price.
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Hi. After you woke me up, I've had a good experience since 4/15 selling AGNC weekly calls. Of course, I started at the bottom of a nice price run up and a very high volatility period. I am currently short the 5/2 8.5 expiry, so I'll likely get the regular dividend that goes ex- 4/30 as well as the 5/2 premium. Since we are interested in the experiment exclusively in call writing premium, since 4/15 I have picked up $3462 on an on average of just 13k AGNC shares. Assuming I get the $1800 distribution then lose the shares, it will have been a very lucky first foray into your strategy.
Regards, Dick
 
I didn't start out that way, but I'm now income focused in retirement.
Today all of our normal spending, including baseline tax, comes from:
1. Two, 30 year ladders that will complete when we're in our mid 90's
2. A 6 year long TIPS ladder for me to bridge to SS which I will start at age 70
3. Ultra-short bond fund for wife to bridge her to SS, which she will start in Apr 2026
4. Topped off with quarterly dividends thrown off of our stock fund in our taxable account. Those are going to happen anyway, so we just add that to our spending. We can tolerate any volatility coming from this source and we don't need to sell shares at this point to meet our regular spending needs.

Other sources of spending include:
1. Stock fund in our taxable account for lumpy expenses, such as the fun stuff (like vacations), the usual large expenses that come along (roof, car, etc), and to pay taxes on Roth conversions.
2. I-bonds which mature over a 10 year period starting in our mid 80's. TBD their usage, but one idea is to use it to purchase a ladder of SPIAs, depending on what our health looks like by then.
3. A sizeable chunk of money in an ultrashort bond fund, dedicated to home improvement projects which are waiting for us to get off of our duffs and start.

Cheers
Big-Papa
 
Koolau said:
Not to suggest it can't w*rk but a cautionary tale: I've told the story of how two of my direct reports got talked into early retirement by a broker who claimed that they could take 8% of their portfolio to live on each year by his writing of covered calls for them. Worked fine for a year or two then they virtually went broke and had to go back to w*rk at 1/3 or less of what they had been earning at Megacorp.

I still recall both of them bragging about how they were going to beat me out the door even though I made so much money than they did. Of course, with the OT they w*rked, they made as much as I did, but I guess their old resentments at "the boss" came out when they thought they were golden.

I actually ended up "w*rking" for one of the guys briefly - repositioning cars for a used car dealer. I did it for fun and to help the guy out.
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This is my fear. I'm almost 55 and very comfortable. I'm sure I might eventually figure out option trading but why take the risk, make the almost certain mistakes and have the stomache churns while I get it sorted?



Man just the thought of it makes me a little nauseous. I'm good sticking with boring dividend investing.
 
dobig said:
This is my fear. I'm almost 55 and very comfortable. I'm sure I might eventually figure out option trading but why take the risk, make the almost certain mistakes and have the stomache churns while I get it sorted?



Man just the thought of it makes me a little nauseous. I'm good sticking with boring dividend investing.
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I also like boring dividend investing. However, I think the so-called risk of options trading (covered calls) is not really risk if you understand the nature of covered call options. It isn't for everyone, but it isn't hard and the only risk is that my shares will be called at a price I already like that is higher then the price when I entered the contract.
There are types of options trades that are super crazy risky, but there are some that are really not "risk" in the true sense of the word.
 
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