Year to date:
My portfolio: 48.36%
S&P: 12.81%
Tracker Fund: -2.99%
STI: 6.42%
Attempts to self medicate... COVID 19 test kit behind that lovely tiger balm
It took my quite some time to write this post because my mum had an fall (thank God nothing serious), and I was down with a virus for the last three days.
Thank God.
Portfolio was boosted largely by realized profits from Cordlife due to a 10% share float offer from Medeze. I outlined why I sold earlier, and on hindsight, the stock went up more than 10% after the sale. My efforts at selling continues to suck big time-- I sold most of my OKP and it went up further more.
Major transaction involves buying securities that are fairly priced for selling of options. With options, the companies involves mostly deal with large caps, and opportunities are not as wide as buying small cap stocks.
As such, I had been buying quite a bit of Haidilao. Its prices has been falling, and I have even got involved in buying deep, in the money, options, and selling shorter term calls. This is what is known as Poor Man's Covered Call, or PMCC.
Buying a call that deep in the money has advantages and disadvantages. The pros are:
Buying a call that deep in the money has advantages and disadvantages. The pros are:
- with a deep in the money call, you actually paying very little for time value, even if you are buying longer period options.
- You pay less money up front compared to buying stock.
BUT the cons are:
- with deep in the money calls, you are gaining and losing money exponentially. My delta is very close to 1.00, which means for instance.
The option price for security A is 3.82. Assuming if the delta is 1, and the underlying stock is 100$,. If the stock goes from 100-> 101, the option goes from 3.82 to 4.82.
As such, given the risk, only a small amount of money is involved, but PMCC are such high-yielding devices. The premiums from the calls I sold was 0.405, and the PMCC-options cost 5.32. That is a one month yield of 7.6%!
Comically, I just received the annual report of Cordlife-- after I sold their shares.
Not much to update this month.
