I don’t normally cover portfolio moves in this blog, just my options trading account activity – but since this particular portfolio trade involves options I thought I would provide a summary.
I always try to do periodic reviews of my overall portfolio vs. the current valuations in the market – to make sure I am not too heavily exposed to stocks when the market is frothy.
The rally we have experienced over the last month increased my equity exposure above my preferred allocation percentages – so I sold covered calls on my Vanguard Real Estate ETF (VNQ).
Here is the trade:
1/13/2023 – Sell to open nine (9) 02/17/23 Calls at $1.22 Premium Collected: $1,097.97
My timing might have been early, VNQ has since moved up further and is currently trading at $90.34 so my strike price is probably going to be challenged at some point.
Note: I consider this a soft hedge – given that I don’t think the market has gone crazy, but feel it is a little over extended. If the shares are called away at $91, the ETF is in my Roth IRA so there should not be any tax consequences. The trade basically forces me to sell / lighten my equity holdings if the market continues to rally.
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