It was another red day for the Chinese tech stocks due to delisting fears and covid lockdowns imposed in China. The mega-cap tech stocks and consumer cyclical stocks also fall due to fears over interest rate hikes and uncertainties of the war.
However, not all sectors are falling as healthcare and financial stocks rose as seen from the S&P 500 Performance Map below.
I closed more of my covered call positions to prepare my portfolio for a surprise rally, as explained in my previous post. I closed early in the session and the stock prices plunged further afterward, which meant that I could collect more premium if I had closed these contracts later. However, no one can predict the market as the share prices could have risen instead. Therefore, I am happy to take some confirmed profits of my covered call positions while waiting for FOMC meeting to conclude before selling another round of covered calls.
As Alibaba’s share price continues to plunge due to the troubles surrounding Chinese tech stock, the PUT contract that I bought on Dec 21 was earning me some profits. So, I sold to lock in a 75.2% return (512/ 680) as the LEAPS PUT contract was expiring on 17 June 22.
The original intent of buying the PUT contact was to hedge against my long positions in Alibaba. Therefore, I bought a new OTM PUT contract (SP USD40) for Alibaba expiring in Jan 2023 using part of the profits at around USD300.
My USD27k Telsa LEAPS Bet
I bought further 3 Tesla LEAPS (expiring 16 Sep 22) to average down on the contract price of my existing LEAPS contracts to USD710 per contract. That also means that I now own 38 LEAPS CALL contracts for Tesla, with a total investment of USD27k. This is a high-risk move as they are OTM CALL and most likely to expire worthless. However, between now to September 22, I was hoping for a rally so that I can clear off the LEAPS and get back my capital to make other investments.
***
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
Want to learn more about Technical Analysis (TA) but find it difficult to grasp the concepts? This article brings you TA at a glance, and helps you understand key terminologies, indicators, and techniques used in TA to equip you with the knowledge that can empower you in your investing/ trading journey.
The Newbie Guide To Technical Analysis (TA)
Follow me on your favorite social media platforms, Facebook, LinkedIn, or Twitter, to get notified of my latest blog posts. Or join our investing/ trading community at Telegram to exchange ideas or ask questions relating to investing/ trading.
Learning Investment With Jason Cai 