Friday 15 July 2022

Finance Investment Movement 23

This is the third month into trading options and I have done only sell put transactions. The results thus far have been encouraging. From trading one counter to four counters now, it's been quite a revelation to monitor price movements of the underlying with respect to the broader market. What I look for would be something that's one week to expiry, strike price at least 10% away from current market and minimum US$15 premium. Other factors include overall trend, high low price of the counter, macroeconomic news etc. Usually, I let the option expire as that reduces the transaction cost by half. It's quite a hefty fee for small trading like mine. Of course, if the trade goes against me, I have already buffered the capital to absorb or prepared to cut loss. I will continue to work out different strategies to maximize earnings. There's just much to learn in order to make sustainable and steady income.

Did my second foray into 6-month T bill for the month of June and got allocated $5000 with yield at 2.36% pa. It's a very nice payout in lieu of fixed deposit and close to CPF OA. The objective is to let the money work and use it to pay off expenses early next year when redemption is completed. Since the yield is looking upward, I'm planning further applications in batches with $20000 remaining to be deployed.

The home loan revision letter came in. It was expected as the new rate of 1.55% under DBS FHR6 will become effective in two months. The additional repayment sum adds to existing burdens and the best way to react is to continue the journey of building multiple income streams while managing risks in a looming recession scenario. My feel for the market environment is that inflation is peaking with demand reducing from now onwards. When supply concerns are resolved, that would further dampen inflation. Growth should dip and hopefully just into slight negative. If that was to happen, expect strong market rallies. The window of buying opportunities is available till September and I'll re-evaluate at that time.

Tip: Les Haut De Smith Rouge 2016, blackberry all over a medium palate, flinty and supple

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