In order to achieve financial freedom and the quest to manage my own money.
MARKETS I WILL TRADE
Stocks, Options, ETF's
Bonds, Metals, **Currencies**
**as positions are added it may not be possible to scale metals and currencies due to account size. Also I need more experience/training with currencies with the possibility this may be diversified to a different 4X account (Oanda)**
Ideally I would like to break my retirement plan into 3rds.........
CORE POSITIONS - 40%
1. Long stocks
DIVIDEND CALENDAR - 40%
The dividend calendar is the idea of selecting high yielding stocks (maybe some REITs) based on the week they will pay their dividends, so as to receive a payout every week for the entire year. This will then be rolled into an IRA at retirement and will be able to produce income and reduce the need to sell stocks in a bear market. 500 shares of 16 companies that were approx. $25 dollars with a 3% yield would net $120 a week at the cost of 200K per tranche. MLPs would be avoided due to tax headaches and possible limited future of oil products.
OPTIONS - 20%
Any and all things are possible. Would provide way of getting short exposure in retirement style accounts.
Minimum 50% IVR for stocks and 35% for ETF's for short premium strategies
Maximum 15% IVR for long strategies
Full checklist (Shadow Traders) work up MUST be done BEFORE trade is entered
No more than 5% of cash available (not total account balance) can be risked on any one position. The fit into which sub category the UL will belong in will be determined before and also its delta +/- for overall portfolio balance.
Starting with 90/10 long/short portfolio until a better value is found.
For scaling around core positions or divi calendar stocks - separate rule guidelines will be made.
For non-core or non-divi calendar positions will be managed as such......
Iron Condors, Verticals, Diagonals, or Ratio flys Win = 50% Lose = 2X
Straddles, Strangles, Calendars (not loss) Win = 25% Lose = 2X
Risk Reversals, Synthetic Long/Short
Single Leg Options Call/Put Assignment Total Loss
ALL Verticals/IF/IC Must collect 1/3 rd of the width of the spread in order to ensure 2X stop loss metric. If multiple positions are used, scaling out on winners is permitted.
The primary purpose is to harvest yield (Divi Calendar) while taking profits at 17% target with covered calls and/or puts. Core Positions will also use options but with the primary purpose being Cost Basis Reduction, using less aggressive delta covered calls and will be rolled up and/or out to avoid being called away.
Every 120 days (4 months) I will take a minimum 10 day break from trading in order to both decompress and review all trades. I will be looking for which strategies are working best and what can be improved on. Monthly reviews for Reg-T will determine P/L for 5%/7%/30% rules. Would be better to use spreadsheet for tracking. Find a way to improve my trading......but if not broken---do not fix.
Reg-T 7% loss (realized) will trigger a one month suspension from trading. Step back and reassess your market awareness and what you may be doing wrong.
30% loss (realized) will end all trading for the year
** MONEY WILL NOT BE ADDED TO A LOSING ACCOUNT **
Hard to figure drawdown rules for 401/Roth.....any suggestions welcome? Have speculative account for risky trades but not sure what else to do.
Looking to make the Roth an all ETF products account with a silver component. Not up to size as of yet, but is HIGHEST PRIORITY at this moment. For now will use for delta neutral plays and defined risk trades ONLY. No earnings trades. Account will be delta positive and hold as little as 20-30% cash reserves