The market continued to sell off in January 2022 as the Santa Claus rally that happened in Dec 2021 was short-lived. I cut loss on some of my LEAPS positions to free up capital for new options trading contracts.
This is the profit/ loss table for closing my LEAPS positions in January 2022:
I suffered a great loss (45%) for my ITM Disney LEAPS that I bought in April 2021. The share price of Disney has since tumbled from the highs of 190+ to the current share price of $130+. As the LEAPS were ITM, they come at a higher premium and thus a larger capital is lost when the trades do not go well.
On the other half of my portfolio selling covered CALL and cash-secured PUT, I lost money trying to close on positions when the share prices shot up near the expiration date. The biggest losing trades happened for Palantir as I lost more than USD2k in 2 trades. The 2nd biggest loss came when I closed my PUT contract for AMD earlier to raise funds to sell a PUT contract on Nvidia.
Despite the losses that I made in Jan 2022, I still managed to make some profits in Jan 2022, which is the worst trading month in my 1-year options trading journey.
The total return of my total capital is a mere 0.73% due to several reasons, one of which is mentioned above regarding the losses that I have cut on LEAPS and the losses I suffered when closing my covered CALL positions to avoid the contracts being exercised.
The other reason is that 56% of my total capital is stuck in my LEAPS contracts as the market kept going down. The LEAPS contracts are all in the red and not generating any income for me during this period. That is the risk of trading LEAPS contracts and I have share more in this article.
2022 will be a very different year as compared to 2021 and 2020 as the market transits from being reliant on stimulus money to trying to stand on its own without these free money pouring into the market. I have since changed my strategies for 2022 because what works in 2021 may not work anymore in 2022.
Other than that, I also learn to prepare myself pyschologically for a very volatile market ahead with plenty of uncertainties. Lastly, I learn to celebrate the small wins and be thankful for every profit that I make as well as the lessons learnt this year.
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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)
If the bear market in 2022 is making feel depressed as your stocks come tumbling down, read this article to find out how you can use options trading to help you claw back some of your losses as you await market recovery:
How I Do Earn Even When The Stock Market Is Bearish?
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
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Learning Investment With Jason Cai 
I am still holding some Disney shares in my portfolio… I bought them in the past for dividend which at moment of course are not paying. Will see the future what serves but overall I think Disney is a good and reputable company that after this pandemic will recover.
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Hi Silverio, I believe Disney will recover once the pandemic is over and the macro environment uncertainties surrounding inflation and interest rate hike is over. Disney has the streaming business as well as the theme parks and owns ESPN. In fact, the stock price has start to recover a little from the recent lows, especially fears over omnicron is starting to subside. Wish you all the best in your investment!
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