After January's outsized returns, February brought me back to earth. Volatility dried up, premiums got thin, and I collected a more modest amount. This is the reality of the wheel strategy — it's not exciting every month, and that's okay.
The Numbers
What Happened
February is an off-month for dividends — SCHD and VTI pay quarterly, so no dividend income this month. That's expected and budgeted for.
Options income of $12,197 cleared my $7,500 monthly target, largely thanks to an early-February SCHD roll — closing the March $29 puts and opening March $32 covered calls. With low implied volatility the rest of the month, premiums were thin and I kept activity light. I could have chased higher premiums by selling closer strikes or shorter expirations, but that's not my style. I stuck to the plan.
The Expense Spike
You'll notice expenses jumped to nearly $20K this month. This was planned — annual insurance premiums, property taxes, and some home maintenance I'd been putting off. When you live off variable income, you have to anticipate these lumpy expenses and not panic when they hit.
Year-to-Date
| Metric | January | February | YTD Total |
|---|---|---|---|
| Options Income | $31,930 | $12,197 | $44,127 |
| Dividends | $2,286 | $0 | $2,286 |
| Total Income | $34,216 | $12,197 | $46,413 |
| Expenses | $16,556 | $19,904 | $36,460 |
Even with a "down" month, I'm still ahead YTD. The January surplus covers February's shortfall. This is exactly why I don't spend every dollar I make in good months.
Looking Ahead
March brings the quarterly dividend — SCHD's ex-date should be late in the month. That's roughly $13,000+ coming in. I'll also be looking for opportunities to sell puts if VTI pulls back, or continue covered calls if volatility picks up.
The wheel keeps turning, even when it turns slowly.
— Russell