Sunday 15 May 2022

Finance Investment Movement 21

The milestone of the first option trade I had ever done was achieved on 5 May. The strike price quoted was US$141 with a week long duration and a put was sold. This honor went to Apple as I'm a fan of its products and didn't mind holding its stock even if the put was activated. Otherwise, I stand to gain a net premium of about US$25. And one trade became two when a put option for Disney was made days later. This is for a strike at US$95 versus US$55 payout. In total, I collected about US$35 in premiums after a rather spooky stock market week and closed the Disney position early.

As the US market tanked last week, investors were left grappling whether to buy the dip or hold onto cash. With a rising interest rate trend, I had set aside a little spare cash. Since the cash was idling, it set me thinking on how to maximize its value. Besides equity purchase, some options that were considered include CPF Housing Refund, Singapore Savings Bond and short term endowment plan. This cash was meant to be liquid so I narrowed it to SSB and began searching for its latest offer. On the MAS website, it showed T bills were available too and the last yield was 1.56%. How could I have forgotten about this instrument! This could have been my go to option when the fixed deposit was redeemed in February. So I applied and am waiting for the result.

Another instrument that I'm monitoring is the unit trust, JPM Income Fund. It's invested primarily in US national debt and pays a monthly dividend that works out to 4% pa. This might be the right alternative bond portfolio for diversification purpose. Various platforms distribute this but there are different fees, so I'm still looking around.

Tip: Chateau Moulin Riche 2014, nice floral bouquet, slight spice, medium body and length

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