Short Butterfly Dec 2015 - Performance Report Week 42/2015

Last week, EuroStoxx 50 closed above 3,260 points. Volatility keeps on going down. Currently, I am still facing some losses due to high expenses for insurance in September and October. For my next trading period, I will try to keep those expenses low. I figured out that options valuation is more stable with expireation some months out. That means it could make sense to reduce protection in the beginning and buy better insurance a month or two later.

The maximum profit is at the moment around 3,700 EUR. Focussing on my profit target of 50 % of that we still have a long way to go. The position is at risk if the EuroStoxx 50 moves above 3,400 points or below 2,800 points. To me that feels like a pretty comfortable profit zone right now.

The question is, what do I do if me move further up. Chart show bearish resistance between 3,300 and 3,400 points. If we move closer to 3,350 points I would feel extend my position at 3,250 and 3,450 points. At the same the short call option at 2,950 have to be closed if possible. Or will will buy one FESX future to cover the position.

Welcome to Butterfly Millionaire

Butterfly Millionaire is a blog about investing. Specifically I wanna share my learning and experience on how to earn money on the stock market.

The reason why I want to do that is, I want to create a stream of mostly passive income that will found my family's life. Most of the background is presented at the "Start Here" Page. There I explained my experience and my background.

Currently I am working in a fulltime job in the corporate finance world in Germany in a small company. I like what I do but I do not feel confident to stay an employee for the rest of my life.

As my wife is from the Philippines we are both working hard to create a lifestyle that offers us the freedom of choice where and when we want to live or to work.

In the next weeks I will describe the main sources of income that can be used to earn money from the stock market. Additionally, I will describe my strategy how I am planning to generate a regular income stream just using dividend payments and option premium.

My starting capital is only 10.000 Euro, so there is a long road to go to. A basic income for a small family will be at least 2.000 Euro in a month. Based on current projections on earning 2 pct. a month on the capital invested, we will need at least 100.000 Euro.

Currently we do both work hard to buy ourselves the time we want. Both of us know colleagues that have kids at home, but the job does not offer enough flexibility to see to them growing up. We don't want that!

My wife will probably stop working in year or two. So in that time we will need enough income to cover her income and still have spare money to invest.

It's going to be a long journey...