It has been a nervous weekend for many Tesla shareholders as CEO Elon Musk, the world’s richest man, went to Twitter to ask if he should sell 10% of his Tesla shares to pay tax. The poll concluded that he should, which he said he would honour the decision. Many Tesla shareholders are anxious and worried that this decision would crash the high flying stock, especially those who FOMO in to buy Tesla stock when it was at its record high.
While it turned out that Tesla did not really crash today (8 Nov 21) as it dropped only about 3%, as compared to the feared 10~15%, I have decided to sell my Tesla LEAPS and lock in my profits, which was 470% increase from my premium paid when Tesla’s share price was $738. At the current Tesla’s share price of around $1190, it was a 62% jump in share price. However, with the power of the LEAPS option strategy, I made a 7.5x the percentage of the price gain, at 470%.
A refresher on how LEAPS work and my strategy:
How Does LEAPS Works And How I Use LEAPS To Maximise Gains?
I could have hung on longer and waited for Tesla to rise even higher towards year-end, which is typically Tesla’s strongest quarter. However, the stock is highly volatile and may go on a downtrend. I made the decision not to be greedy and chose to lock in the profits now. With that, I am grateful to Tesla and Elon Musk for playing a big role in this record close for me.
Moving Forward
With the profits I have collected from selling my Tesla LEAPS, I bought a few other LEAPS on companies that I have strong convictions in. It is a good opportunity for me to plan further ahead regarding my LEAPS strategy so I added more LEAPS expiring in Jan 2024.
The LEAPS that I have added include:
1 x AMD LEAPS Strike Price $200 Expiring on 19 Jan 24
1 x Alphabet LEAPS Strike Price $4500 Expiring on 19 Jan 24
2 x Apple LEAPS Strike Price $180 Expiring on 19 Jan 24
I also added another Pinterest LEAPS expiring on Jan 23 to average down my previous Pinterest LEAPS that are bought at higher prices.
The sale of Tesla LEAPS feels like selling the best player in the soccer club and using the money to boost the squad with a few other quality players. I believe that the likes of Apple, AMD and Alphabet (AAA) will provide great rewards when I sell this batch of LEAPS sometime in 2023 as they are all fundamentally good companies with growing profits and share prices have been steadily increasing over the years.
Related Articles:
How I Use LEAPS To 10X My Returns
My Biggest LEAPS Options Contract Closed, 173.8% Returns In 10 Days
I Was Laughed At When I Told Them I Bought LEAPS With A Low Delta
[Proof Of Concept] Why LEAPS Options With Low Delta Works
My Biggest LEAPS Options Contract Closed, 173.8% Returns In 10 Days
The Power Of LEAPS: Tesla LEAPS Is Up 340% In Just 18 Days
I Bought Tesla LEAPS At 3.75k 15 Days Ago (15 Oct 21) And Now It Is Worth $12.6k (236% Profits)
***
Keen to learn about options trading but do not wish to pay for expensive courses, this newbie guide will help gain the knowledge and fundamentals to understand options better. And it’s totally free!
The Newbie’s Guide To Options Trading
The LEAPS Strategy has helped me make more than USD120,000 in 2021. Here’s all you need to know about this strategy that can help you increase your wealth exponentially:
The Ultimate LEAPS Options Thread
Looking for ideas on what stocks to invest in or which stocks to trade? You can take reference from what I have been buying or selling. I try to update them as soon as I can in this section, as well as share my thoughts behind executing these trades:
MY TRADES
Excited to start your trading journey or perhaps try out with a paper trading account to build your confidence in trading? Check out this step-by-step to help you get started:
How To Buy Options on Interactive Brokers (Step-By-Step)
I watched tons of videos on YouTube since 2020 and if you are wondering if there are any useful channels that you can subscribe to for learning market trends, TA, FA, check out this compilation here:
My Secret Weapons For Options Trading: I Watch These YouTube Financial Channels Every Day
I concluded my first year of options trading with more than USD160k of gain, see how I do it and the capital I use for every month to give you a sensing of the percentage yield I get out of my gains:
1st Year Options Trading Recap: The Journey Towards SGD$217,509 Profits In 2021
This blog is as authentic and as transparent as I can share, I do not just show the wins and hide the loss. I have made some very bad decisions in the first 8 years of investing and paid a huge price for them. Here is the loss I have accumulated during these years. I hope you learn some lessons from my mistakes.
I Cut $135,715 Worth Of Losses In The Last 1.5 Months
Learning Investment With Jason Cai 
Awesome strategy, leaps are so powerful when the prices move in your direction. They have a max loss since you cannot lose more than the premiums you paid if I’m not wrong. Tsla leaps could be expensive though, I’m considering to close some stock to pump into options
LikeLike
Thanks Zack for sharing your thoughts! Yup, they are really powerful when the stock is bullish and we all know that many stocks are on a wonderful bull run since mid 2020, which continued this year. You can see my returns over the last 4 months here:
https://learninginvestmentwithjasoncai.com/2021/11/16/how-leaps-options-trading-strategy-gave-me-insane-returns-in-the-last-4-months/
And yes, Tesla LEAPS are expensive, I was fortunate to grab them when they are in 800+ range. Subseqently, I bought them back at 1k+ but I simply chose the lowest premium for Jan 2023. I just got them a week ago and they are in the green again. Go Go Go Telsa!
LikeLike