Author: Patience to Invest

I have to keep reminding myself 2022 was not the norm. After over four years of trading my strategy Patience is a Virtue the results are really good. I did have a roughly 53.8% drawdown in that time, but my annualized rate of return is still sitting at 34.6% per collective2’s calculations. Those a great returns especially when you consider the fact that I did it inside a Roth IRA and paid no tax on those gains.

Despite this it is always tough mentally to not be at a new high. It has been over two years of not having a new high. That is a long time and it is mentally draining – especially when I have followers that likely are in similar situations. Despite this I remain focused.

2022 was an exceptionally bad year. Using this free backtesting tool we can see that 2022 was the single worst year for 50% stocks and 50% 10-year treasuries in the entire history that this backtesting tool has available.

My strategy obviously isn’t just buy and hold stocks and 10 year treasuries. However, my strategy does rely on similar instruments quite heavily with more leverage. When I remember that the 53.8% drawdown occurred while using leverage during the worst single year in over 50 years suddenly I don’t feel so bad. To still have a 34.6% annualized rate of return over the last 4 years and a roughly 50% return this year makes me feel quite justified with my strategy. I certainly reserve the rights to be wrong. But man this seems like a winner of a strategy for me.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

As I have mentioned in some previous posts I have been looking at reducing how much money I have tied up in Bitcoin. However, I still want to keep similar price exposure for now. First I sold all my Bitcoin for BITO which has very similar price movement. It does have the downside of an expense ratio and futures drag. However, it should be helpful in keeping price exposure temporarily.

The main benefit of BITO is that it is marginable. So I can easily withdraw cash from my broker to fund IRAs, SEPs, HSAs, etc. Also BITO does have option chains. I have been looking at the 6/20/2025 expirations since they are far out and would benefit from lower tax rates if I held to expiration and the price moved in my favor. When looking at the option chains I did notice that some of the option ask prices didn’t make much sense. So I took the screenshot below.

The ask price for the $14 strike is less than the $15, $16, and $17. Now for a real good arbitrage opportunity I would need the bid and ask prices to be out of whack enough to make a guaranteed profit. For example, if the $15 bid was more than the $14 ask. This is not the case. So I didn’t see any great arbitrage opportunity.

However, my goal is to free up capital and with the ask as low as it was on the $14 strike this seemed like a decent strike to pick. Dealing with options this illiquid can make you lose some market value pretty quickly. I couldn’t get the order to go through without meeting the $2.60 ask, and immediately after the Robinhood software then marks the value down to the mid price of $2.16. If I wasn’t planning to hold this option likely to expiration this could be a problem but for now I will just accept that on my return today it shows a near immediate $572.00 loss due to the 13 contracts being bought at $2.60 and valued at $2.16.

So far it still seems like a good deal for me. Anyway I have now liquidated all my Bitcoin and BITO and am holding only BITO options. I have about $7,505 tied up in these options instead of the roughly $28,000 I had tied up in Bitcoin. Now this gives me funds to invest in other ways that are hopefully uncorrelated. Should Bitcoin drop perhaps I can buy more and if it rises perhaps I won’t miss out too much.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

The difficulty in beating a market is that you must not only predict the future but you must predict it better than others. Until today I had never noticed the Iron Condor index CNDR. As shown below this index did quite well from the late 80s to about 2008. My guess is that this index of collecting option premiums did great in that time period because the option markets were not very efficient then and sellers had an advantage. Of course, overtime it is easy to lose an edge as more people discover it. I believe this is why this index has had a near zero return since 2008 and likely will have a long term near zero return going forward.

The other interesting thing is that even in the period that this index was doing very well the return was in the ballpark of the S&P 500 price return for much of the time as shown below.

Data like this is what makes it very difficult for me to trust youtubers like invest with henry that seem to present options strategies as a safe and easy way to make lots of money. IMHO that is a pipe dream.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

I recently had a discussion with someone on the Collective2 forums where they claimed they have never had a single losing month in their trading history. That smells like a lie to me. It certainly is possible but please point me in the direction of one person with a verified track record where they have had no losing months despite trading profitable for many years? To no one’s surprise the person was unwilling to prove it.

Something as blatant as saying you have had zero losing months is pretty easy to identify as a likely lie, but it is often easier to be swayed my less blatant lies like the idea that you can get a 30% annualized return and never have a drawdown of more than 15% etc. The best thing to do is ignore these claims and move on to more realistic possibilities.

Forum Post

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

I typically prefer to buy ETFs rather than options. I find the bid ask spread easier to manage and liquidity keeps things simple. However, I do occasionally worry that my broker will stop allowing certain ETFs I use in my IRA accounts because they generate K-1 forms. Fortunately, some of those ETFs such as VIXY can be replaced with VXX, which has no K-1 form. However, should my broker ban SVIX, I then need a new way to short vol inside my IRA accounts. I could of course switch brokers. For example in my HSA at Schwab and my IRAs at Interactive Brokers I am able to trade SVIX without a problem. Hopefully they wouldn’t both change policies at the same time.

Should they do so, I am also working out the intricacies of replacing SVIX with VXX put options. This doable in theory, but there are some intricacies that do need to be taken into account. This is why I started a new strategy at collective2 that simulates doing this. Trying this at C2 is a pretty conservative test because C2 always buys with market orders. Therefore all trades take place with buys at the ask and sells at the bid – except for if the leader is using broker transmit. This creates a pretty big drag on the strategy. Therefore, if I can successfully do this at C2 I feel confident I can do it with real money should the need arise.

This is a link to the strategy.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

Over the last week or so I have been modifying my crypto positions to keep similar amounts of exposure while freeing up some capital to fund my families HSA. Just yesterday the HSA funding arrived and I deployed it to my HSA strategy which included some GBTC. I’m glad I deployed it yesterday since GBTC happened to get some good news today. That is pure luck!

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

I was recently caught up in videos by the world traveling, money is no issue, and ostensibly Tesla owning trading influencer Invest with Henry. In his videos he teaches his listeners how to make money trading options often inside his $2 million Robinhood account. If you watch enough of his videos (or similar influencers) you will see them mention covered calls as a way to earn reliable income. This is in my opinion bad advice. Let me give a quick example of why.

There are funds out there where you can pool your money together with other investors and sell thousands and thousands of covered calls on indexes such as the S&P 500 and Nasdaq 100. I often see these funds promoted because of their high dividend yield. However, I think most people should stay away from covered calls whether they are doing them manually or via a fund like those I mentioned. This is because they drastically underperform simply buying and holding the stocks or indexes in the long run.

XYLD is an ETF that sells covered calls on the S&P 500. It currently has a distribution yield of 11.19%. So why wouldn’t you want to buy it. In this first image below you can see the price performance of this ETF.

It is important to make sure we include dividends in the calculations. So this second graph shows the return when you include price and dividends. Now it actually looks pretty good.

Unfortunately, there is no free money out there to be had despite what covered call promoters make it sound like. Now in red you can see the results of the regular S&P 500 index ETF SPY with dividends reinvested. It drastically beat the total return of XYLD and was much more tax efficient. If you want money to spend just slowly sell little bits of it.

To show whether or not Henry is doing better by selling covered calls is pretty hard to prove one way or the other. But this professionally managed covered call ETF shows that making more money by using covered call ETFs is highly unlikely for anyone.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

I have been trading crypto since 2017 and have done quite well. But at the moment I have some Bitcoin that has a negative unrealized loss. I have been considering long term BITO call options to maintain my current exposure to Bitcoin price while freeing up cash to spend, diversify into other assets, or double down on crypto.

Today I sold a total of $8,827.89 worth of Bitcoin and bought $3,950 worth of 6/20/2025 call options on BITO. I have 7 contracts and control 700 shares of BITO. Below are some estimates of how much cash I freed up and managed to keep roughly the same Bitcoin price exposure should it climb. I have reduced my max loss, but increased the chance of loss if Bitcoin stays where it is or drops. However, this frees up cash to fund our HSA, take a trip, or do something else with it. Per the table below I have freed up about $5,424 with the downside that I have borrowing costs essentially. But I probably couldn’t go get a loan for decent price for this and I prefer to enter positions where I know the max loss and am comfortable with it.

Item	Strike	Expiration	Contracts	Cost	BITO Price Now * Share	Underlying at Open	Underlying Price	Break Even Price	Break Even Move	Time Value	Time Value Annualized Cost
BITO Call	10	6/20/2025	3	$1,455.00	$4,017.00	$13.39	$13.34	$14.85	10.90%	$438.00	10.90%
BITO Call	9	6/20/2025	2	$1,040.00	$2,678.00	$13.39	$13.34	$14.20	6.05%	$162.00	6.05%
BITO Call	7	6/20/2025	1	$680.00	$1,339.00	$13.39	$13.34	$13.80	3.06%	$41.00	3.06%
BITO Call	6	6/20/2025	1	$775.00	$1,340.00	$13.40	$13.34	$13.75	2.61%	$35.00	2.61%
Total				$3,950.00	$9,374.00

Correction for Same DaY

I decided to sell a little more so I would have enough cash on hand to max out our HSA for the year. Unfortunately I made a mistake and instead of entering a buy order I entered a sell order for two contracts of the $9 call for $900. I meant to buy. So then that left me with a position of 0 contracts for the $9 strike. So I went an bought four for the price of $2,060. That was a little frustrating, but now I have a spare $5,000 free to deposit to our HSA which will help me max it out in combination with the employer contribution. In the table I just do the math to ignore the sale and include its drag on the purchase of 2 additional contracts.

Item	Strike	Expiration	Contracts	Cost	BITO Price * Share	Underlying at Open	Underlying Price	Break Even Price	Break Even Move	Time Value	Time Value Annualized Cost
BITO Call	10	6/20/2025	3	$1,455.00	$4,017.00	$13.39	$13.30	$14.85	10.90%	$438.00	10.90%
BITO Call	9	6/20/2025	2	$1,040.00	$2,678.00	$13.39	$13.30	$14.20	6.05%	$162.00	6.05%
BITO Call	7	6/20/2025	1	$680.00	$1,339.00	$13.39	$13.30	$13.80	3.06%	$41.00	3.06%
BITO Call	6	6/20/2025	1	$775.00	$1,340.00	$13.40	$13.30	$13.75	2.61%	$35.00	2.61%
BITO Call	9	6/20/2025	2	$1,160.00	$2,660.00	$13.30	$13.30	$14.80	11.28%	$300.00	11.28%
Total				$5,110.00	$12,034.00

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.

I recently decided to commit the cardinal sin for many crypto enthusiast. I moved my self custody crypto to Robinhood. I did this because I am considering selling some in order to buy options on crypto ETFs to add in a leverage factor. I also wanted to test out the Robinhood send and receive features etc. Fortunately sending into Robinhood worked great, but I did find that like most exchanges they then show my cost basis as zero since there is no way for Robinhood to calculate where I bought the crypto and for how much etc. Fortunately, it appears that though I do get a 1099 from Robinhood Crypto they only report proceeds to the IRS not basis. This is good since it would be incorrect. Fortunately, I am using Koinly already to calculate my crypto basis etc. I just have to import my Robinhood transactions into Koinly and keep giving my Koinly tax report to my accountant. I like using Robinhood because I can immediately convert to stocks, options, cash, crypto, and back. Also I did confirm with a rep and I have to say that Robinhood is much better than it was in the past in terms of customer service. I have been a long-term inconsistent user. But I may start keeping some funds in Robinhood as they have been adding good new features.

Disclaimer

This is not investment advice. This website is designed to talk about investments but it is not designed to give you personalized investment advice. This site is generic and should not be used as the basis for any investment decisions. This is for entertainment and educational purposes only.

The owner of PatienceToInvest.com is also a trade leader on Collective2.com. We may receive compensation by promoting some collective2 strategies over others.

Investing is risky and can result in the loss of all your capital and even more than your original capital in some cases.