Forget about the Santa Claus rally, the January Effect, or hopes of a revival in the upcoming earnings season, the stock market is filled with extreme fears now. With no end to this market selldown in sight, I am taking steps to prepare myself for the worst-case scenario, a huge correction.
Going into 2022, I had been buying the dip since November 2021 and hoping for a year-end rally to take profits on my LEAPS and then shift some of my fund allocations from LEAPS to Wheel (selling PUT and CALL), because I think the market will stay sideways for most of 2022.
However, the Santa Claus rally was short-lived and ended on the first trading day of the new year. Thereafter, the market just kept selling off. For folks like myself who started investing in the US market in 2021, this must have been an unfamiliar sight. This is because the market was quickly bought up whenever there was a dip in 2021. The strangest mystery to me is Tesla’s share continuing to sell off even after they have an amazing quarter of delivery and exciting plans coming up.
In order to prepare for what may come, I sold off some of my LEAPS positions to raise more funds to buy when the market dips further in the coming weeks. I sold off 10 x Apple LEAPS, 1 x Disney LEAPS and finally the most painful of them all, 2 x Tesla LEAPS, to raise a total of SGD26k to deploy for my next move. Luckily, for the above LEAPS positions, the loss was minimal as they were sold close to my breakeven point.
It is agonizing to watch all the unrealized gains of my Apple and Tesla LEAPS vaporize but I think sometimes, we need to make the hard decisions to not win the battle but lose the war. This retreat allows me to regroup, strategize and come back to fight another day. If you have been losing money at this point in time, take a break and allow your mind to recover from the shock and take good care of your health (both physical and mental). You need to be in the best shape to overcome these challenges and win the battles.
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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 