Time Advantaged Investor
dividends | covered calls | cash-secured puts | naked options | catalyst-driven trades | share cannibals
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The Million Dollar Experiment
The problem: Between inflation and mean reversion, generating investment returns in the next two decades is likely to be much more difficult than it has been in past years. But I still want to retire in about 5 years and will need to generate investment returns on my nest egg to do so.
The hypothesis: that a portfolio of opportunistic, discretionary, time-advantaged trades can generate a sufficient return over time to support retirement.
The test: Starting in late December 2025, I will run an actual portfolio of these trades for three years. The portfolio will start at ~$1 million and will be considered successful only if its total return exceeds both of the following:
a. Schwab Dividend Fund $SCHD total return
b. inflation + 5%
Why these thresholds? If I can’t beat these, might as well just split between dividend ETFs and TIPS.
What are time-advantaged trades? Time-advantaged trades are simply trades that tend to benefit over the passage of time all else equal. Many will be short vol that directly increase as theta decays, such as covered calls, covered puts, and naked short options. Others are not, like going long high-dividend stocks or share cannibals, or shorting leveraged ETFs subject to vol decay. Some will have time-based catalysts. Sometimes these factors will be combined. For example, a dividend-paying stock could be covered with a short call, or a naked put sold on a stock that is rapidly buying back shares.
How often will you update? Hopefully at least once per month by email (subscribe above). I don’t anticipate giving advance notice before entering or exiting trades, or reporting every trade (that means I might end up on the other side of a trade as you or taking the opposite side of a trade that you might expect). Might also occasionally update on X so follow the account there too.
Are you selling a newsletter or alerts? No.
This is not financial or trading advice. This is an experiment run in the open. I don’t know if it will work or not. It is definitely not something I advise anyone follow. I will not provide advice or take outside investments. Please don’t ask.
Will the portfolio tilt long or short? Depends on the opportunities at a given time. I will also seek some trades that are not correlated to equity markets.
Won’t you blow up like other options sellers? Its possible. A key goal of the experiment is to better understand managing the risk of these trades at both a trade and portfolio level. Unfortunately, many of these trades are difficult to backtest. From prior experience, I expect to get thumped from time-to-time.
How concentrated will the portfolio be? Concentration will vary widely. During most times, the portfolio will be spread among 20-40 bets. However, at times it could become much more concentrated, and at times even more dispersed.
Do you expect returns to be volatile? Yes.
