One-tenth of one percent a day

… new cash. That is the goal of my options portfolio, which is run like a very tiny insurance company. I get paid to accept a defined amount of risk for a defined period of time, exactly like State Farm. Learn to run your portfolio properly, and it will be a small business with cash flow. You do not have to predict the future, just manage it.

Today, the market is down again. Nothing new and I don’t care. I care about just one thing – Can I create my cash flow goal for the day? I’m 2/3 of the way there and working on rolling a Facebook option position. That roll is a few cents away from being filled, so it will happen and I will be done for the day. There is still an hour to go until the market closes and the order has just filled. I have taken in my .001% for the day.

After that happens, I usually leave the other open orders in place, rather than adjust them to get fills. If they get filled, it’s a cash bonus. If not, then I have a good starting place for tomorrow. I think of each existing position as inventory that must pay for itself, all the time. I don’t want anything that cannot produce income. I sell insurance to people who need protection for their own portfolios. If you stop trying to predict the future and instead focus on running a business, you can build new value every day.

Stay Optioned, My Friends!

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