SELLING PREMIUM CASE STUDY - 3M Corp (MMM) 386 Days vs Buy&Hold

 

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	CASE STUDY TRADE
SELLING PREMIUM VS BUY&HOLD INVESTOR
DISCLAIMER: This trade is based on this date. I'm not suggesting a move up or down. I'm showing my trade that I have already done. I'm not recommending this stock as a purchase/trade. Think of it like this, I'm 'Showing you the World thru my Eyes'.
MY 386 DAY MMM TRADE / CASE STUDY
3M Corp.
TIME AND DATE STAMP | .		Weds, September 16, 2020
AT THE TIME OF THIS BLOG POST THE STOCK PRICE WAS >			$169.37
TOTAL PROFITS FROM USING THIS STOCK
PREMIUM $	STOCK $	DIVIDEND $	TOTAL PROFIT
$8,082.21	$8,775.00	$1,897.00	$18,754.21
This 3M (MMM) - Selling Premium - trade represents what I try to do with most of my stocks in my selling premium portion of my portfolio. I buy a great stock that pays a good dividend, trades in a nice predictable range and I sell premium again the shares or the cash. As in, I use both the purchased shares (CCW) and cash (CSP) when and where the situation best fits. In this 386 day trade I collected premiums, dividends and all stock sales combined a stock sale gain. Non of this data is cherry picked ... it's literally pulled from my Total Income Tracker.
FOOD ON THE TABLE
MONTHS?	SELLING PREM/DIV	MONTHLY?	BUY HOLD H DIV	TOTAL PROFIT
12.75	$9,979.21	$782.68	$2,187.00	$171.53
Food on the table means ... when an investment pays cash money ... when you Buy and Hold a stock, for the most part the only cash that gets distributed to the shareholder is the dividend ... selling premium investors collect the per share premium and any dividend if they are holding the stock ... the above calculations represent ONLY cash distributions (no stock sales yet!)
STOCK DETAILS SINCE 1ST PURCHASE
TRADING THEN?	TRADING NOW?	DIFFERENCE?	MISSED/GAINED UPSIDE?
$166.55	$169.37	-1.66%	This % represents what the SP investor missed out on
The Buy&Hold investor will always say "had you just held the stock ..." in this case the Buy&Hold investor would have made a stock appreciation % gain of 1.59% at the time of this posting. (MMM is trading for $169.37) which is not a favorable % gain for a 12.75 month timeframe ... this % gain does not outpace the S&P 500 historical 8% annual gain.
SELLING PREMIUM VS BUY / HOLD			AVERAGE 300 SHARES
DAYS	SP PROFITS	CASH ON CASH %	STOCK GAIN	STOCK % GAIN
386	$18,754.21	37.53%	$846.00	1.69%
The TOTAL Cash on Cash % gain as compared to the Buy&Hold investor is pretty remarkable. The Selling Premium investing made both a stock profit and was able to make monthly income that I think would be considered good money.
FINAL RESULTS AND COMPARISONS
SELLING PREMIUM		BUY & HOLD
CASH ON CASH % GAIN		CASH ON CASH % GAIN
37.53%		3.49%
THE WINNER IS? 3M Corp (MMM) This wasn't even close as the Selling Premium investor made so much more AND they put food on the table at a very reasonable monthly rate ... The Buy&Hold investor collected the dividends but if the trade ended today ... the Cash on Cash % gain for which we are ALL striving for ... well, the they don't even beat the S&P 500 historical annual returns.
FINAL LOOK AT THE CHART FROM 1ST TRADE TO CLOSE
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Disclaimer - No - at the time of this posting I did not own the shares of this equity. and it probably means I've done a Cash Secured Put ... for which if this trade goes against me I *will* own these shares ... I risk my own money on this trade and am accountable for the trade results.
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