Discover more from Covered Calls with Reinis Fischer
Reinvesting Options Income into Dividend Paying stocks Challenge 2021
I decided to launch another interesting stock investing challenge - reinvesting income from options trades into dividend-paying stocks.
Long story short - For the past few years I’ve been obsessed with options trading, covered calls, credit spreads, iron condors, straddles, strangles, you name it.
Before turning to options trading I was actively investing in dividend stocks.
At its height, my dividend portfolio was generating almost $300/mo about two years ago.
Once the pandemic broke out in March 2020, most of my dividend stocks get trimmed, halved.. the scene was not nice.
I slowly shifted away from dividend stocks and focused on hefty income from options trading.
Now, I want to take it back and grow back my dividend stock portfolio to the levels of $300/mo in a reasonable time frame.
And here I plan to use the income generated from options income.
Both are great investment strategies. From options trading, I’ve found my favorite being - covered calls and credit spreads, while from dividend investing I prefer investing in dividend aristocrat stocks
I want them both - both options and dividend income, and that’s why I’ve decided to launch this small challenge and for the rest of 2021 focus on growing my dividend stock portfolio.
On July 19, I closed all stock and options positions and started over. For a while, I will be selling credit spreads before turning them into covered calls. From the premiums received I started to buy dividend stocks.
I buy both optionable and non-optionable stocks, high yielding and dividend aristocrat stocks, the current list goes like this - PFE, AWP, INTC, ARCC, WBA
During the week I tend to make 2-3 trades, and after each trade, I buy some of these dividend stocks.
See: My dividend stock portfolio
My goal is a dividend stock portfolio, generating about $50/mo by the end of 2021.
As I help to manage a stock portfolio for my better part as well, which is considerably smaller, we are looking to grow it to about $15/mo from dividend income.
Combined we are looking to have a $65 average monthly dividend income by December 31, 2021
Speaking of growing back to the levels of $300/mo I guess it will take us about 2 years, could get there by the end of 2023?!
To make us accountable and keep records I will post weekly updates till the end of the year. Content will be available for paid subscribers