2023 Dec Option Trade Report: $2,273 Gained & Lessons Learned

# Blog: Dec 2023 Trade Reflections

In Dec 2023, the total cash I earned from Option trading was US$2,273. That brings my total earning from the Option Wheel strategy to a total of US$40,687 in 2023 (or 20% return on the $200K capital).

What made up the $2,273 gain in Dec?

In Dec 2023, the overall US stock market gained 4.8% in a single month. Most stocks were on an upward trend.

When the overall market is filled with positivity and optimism, volatility of the market goes down and the premium for option selling will be lower.

Therefore, Dec 2023 was not really a good month to sell Options.

I didn't find any particular attractive selling opportunity this month at my desired XIRR (rate of return on my capital). Hence, I didn't enter into any new option contracts this month.

For the $2,273 cash gained in Dec 2023, 90% of the cash came from contracts sold before Dec 2023.

A small portion of the cashflow gained from a synthetic-bond option strategy which is a low return but risk free way to generate return on our capital. A good way to put your money to work when we don't have attractive opportunities to use the capital for.

More about this strategy later.

No Trade Activities in Dec 2023

As we have discussed before, inactivity is not a bad thing.

If we can't find opportunity that give us a good risk-to-reward ratio, then keep our powder dry and be patient.

Lessons learned in Dec 2023

1. Saying no to short term temptation of low return opportunities is critical to ensure higher long term capital return.

2. The beauty of investing and doing option trading is the flexibility. As we enter into the festive end of 2023, it is important for us to take some well deserved break. After all, money / wealth is not the end goal here. It's meant to help provide the financial freedom so that we could spend time with our loved ones!

Hope you guys had a good festive December and happy new year!

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