Trading Blog

My Options Trading Portfolio

LIM WEI XIANG

Jul 16, 2024 — 2 min read

Up 15% since inception!

Disclaimer: I am not a financial advisor. The content for this article is purely for educational/research purposes only and is merely based on my personal opinions.

Please note: There will be affiliate links in this article. But it will only benefit both of us. If you do not wish to participate under my affiliate links, please feel free to Google them separately. Cheers!

To be fully transparent, I started trading options around December 2023, I invested a total of $20,000 with plans to add $1,000 each month from my day job paycheck. I exclusively trade the Tasty Wheel Strategy and the Tasty Credit Spread Strategy because I prefer to hold cash and minimize risk as much as possible.

Options Strategy: Tasty Wheel & Tasty Credit Spread.

I primarily use the TastyTrade options strategy, developed by the TastyTrade team, who conducted extensive research and multiple backtests on strategies like strangles, straddles, and iron condors. They found that trades with 45–60 Days to Expiration (DTE), managed at either 50% profit or 21 DTE, yield the highest returns in the long run.

As you know, I prefer to hold as much cash as possible instead of owning stocks and waiting for price appreciation. Therefore, I’ve modified the TastyTrade strategy to align with my trading style. I also execute trades with 45–60 DTE, targeting around 20 Delta, and take profit at either 50% profit or 21 DTE. This approach helps me reduce the risk of holding positions to expiration and frees up more margin for additional trades. Essentially, it allows me to secure profits earlier and faster!

Portfolio Breakdown

Total invested amount to date: $20,000 while adding more monthly funds.

Stocks Under The Tasty Wheel Options Strategy

Nvidia (NVDA): Recently included in my portfolio after a 10-for-1 stock split, making it more affordable. It’s currently my top choice for running the Tasty Wheel strategy.
Taiwan Semiconductor Manufacturing Company (TSM): My favourite stock at the moment. TSM is the backbone of the tech industry, producing about 60% of chips for major brands like Apple, Nvidia, and Qualcomm.
Marathon Digital Holdings (MARA): This is a high-risk play due to its involvement with Bitcoin. I trade MARA with leftover funds after purchasing options for NVDA and TSM, aiming to earn substantial premiums from this volatile stock.

ETFs Under The Tasty Credit Spread Options Strategy

I only allocate around $3000 for this credit spread strategy.

S&P 500 (SPY): This ETF is an excellent fit for the Put Credit Spread strategy, as it generally trends upward over the long run. Since the Put Credit Spread profits from stock appreciation, I trade around 2 lots every 45 days to maximize returns.
QQQ: For similar reasons as SPY, QQQ also experiences consistent growth. To diversify my portfolio, I allocate another 2 lots every 45 days, aiming to capture profits from this ETF as well.

Watchlist

My watchlist includes almost all Tech Giants, here is my watchlist;

AVGO
ASML
SMCI
ARM
PLTR
SOFI
CRWD
BITO (Higher Risk)
MSTR (Higher Risk)
COIN (Higher Risk)

Endnote

To be honest, a $20,000 portfolio can’t go very far, but it’s a good start! I plan to continue adding more funds to my portfolio while diversifying my trades. Please leave a comment if you’d like me to keep sharing my portfolio updates.