| All rights reserved - Core Position Trading, LLC - 2020 | ||||
 | 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 171 DAY JPM TRADE / CASE STUDY |  | |||
JP Morgan Chase | ||||
| TIME AND DATE STAMP | . | Friday, November 13, 2020 | |||
| AT THE TIME OF THIS BLOG POST THE STOCK PRICE WAS > | $101.20 | |||
| HOW MANY SHARES AND THE PURCHASE PRICE | ||||
| Based on 500 shares | $95.30 | $47,650.00 | ||
| MY TOTAL PROFITS FROM USING THIS STOCK | ||||
| PREMIUM $ | STOCK $ | DIVIDEND $ | TOTAL PROFIT | |
| $5,883.64 | $3,420.00 | $450.00 | $9,753.64 | |
| This JP Morgan (JPM) - 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 against the shares I own or the cash I have in the account. As in, I use both the purchased shares (CCW) and cash (CSP) when and where the situation best fits. In this 200 day trade I collected premiums, dividends and all stock sales combined( 1 in this case) as stock sale gain. Non of this data is cherry picked ... it's literally pulled from my Total Income Tracker. (Want a Free copy? go to cptdashboard.com > Click Free Spreadsheets > Download your copy today) | ||||
| FOOD ON THE TABLE | ||||
| MONTHS? | SELLING PREM/DIV | MONTHLY? | BUY HOLD H DIV | TOTAL PROFIT |
| 5.7 | $6,333.64 | $1,111.16 | $450.00 | $78.95 |
| 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/traders collect the per share premium and any dividends 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? | |
| $95.30 | $101.20 | -5.83% | 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 6.31% at the time of this posting. (JPM is trading for $101.72) which is a favorable % gain for a 5.7 month timeframe (~200 days) ... at the time of this posting, this investment was not outpacing S&P 500 annual % gain as the S&P500 is up 6.93% (again, at time of this posting) | ||||
| SELLING PREMIUM VS BUY / HOLD | USING 500 SHARES | |||
| DAYS | SP PROFITS | CASH ON CASH % | STOCK GAIN | STOCK % GAIN |
| 200 | $9,753.64 | 20.47% | $2,950.00 | 6.19% |
| 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 for most all income seeking investors. | ||||
| FINAL RESULTS AND COMPARISONS | ||||
| SELLING PREMIUM | BUY & HOLD | |||
| CASH ON CASH % GAIN | CASH ON CASH % GAIN | |||
| 20.47% | 7.99% | |||
| THE WINNER IS? SELLING PREMIUM - 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, this JPM Buy & Hold investor would be behind the S&P 500 ... taking on indivual stock risk with not the stock gain one would hope for. Still a great investment ... just not compared to Selling Premium during this case study timeframe. | ||||
| FINAL LOOK AT THE CHART FROM 1ST TRADE TO CLOSE | ||||
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| Remember, the content of this site is for informational and educational purposes only. If you invest using information contained here, do so at your own risk. Please read the full disclaimer posted below and visit cptdashboard.com for my privacy policy. | ||||
| 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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