The US stock market got totally decimated when worse-than-expected CPI result was released on 10th June 2022 (Friday), as investors fear that the Federal Reserves will be aggressive in raising interest rates to curb inflation, which would hurt companies’ profits.
The May consumer price index rose 8.6% year-over-year, its highest level since 1981. Economists had forecast an 8.3% increase. The core index, which excludes food and energy prices, rose by 6%, slightly higher than estimates of 5.9%.
Buying LEAP PUT For Bearish Market, Activating Plan B
I shared in my previous post on the Plan B to save my LEAP Portfolio and I have activated the plan on 10th June by buying 1 x Alphabet LEAPS PUT and 1 x Meta LEAPS PUT. The contract details are as follow:
These 2 LEAPS OTM PUT are 1 year out and will expire on 16 June 2023. If the market is going to bearish for the next 12 months, these LEAPS PUT will bring me good returns, similar to the LEAPS CALL that I bought for 2021.
Rolling Tesla Covered CALL Contract
I also closed my Tesla Covered CALL position to lock in a profit of USD700 in 1 week because the premium has dropped by that much since the day I sold the Covered CALL contract one week ago. I then opened up a new Covered CALL contract with the same expiration date but a lower strike price and collected the same premium amount of USD9.5k.
I have used this strategy of rolling Covered CALL very frequently this year as it works well in a bearish market. The strategy is explained here:
How I Do Earn Even When The Stock Market Is Bearish?
Concluding Thoughts
I hope everyone is coping well in this market downturn. Losing money is a very painful thing but what is more painful is losing your health, whether it is the stress that comes from the loss or losing sleep which in turn affects your physical health. After Friday’s collapse, my paper loss has increased to 618.8k from the previous 576k, so you are not alone in this ordeal.
I have a few plans in place should the worst case scenario happens when the market continues to crash. I have shared some of them and will continue to share in the upcoming posts. In every crisis, there are opportunities to benefit, so do check out some of the strategies that I have used that may be able to help you generate some returns in this downturn.
Despite being in a bad year and holding a portfolio that is made up mainly of tech stocks and semiconductor chip companies that have been battered heavily, I still managed to generate around 100k of realised gains this year. So, obviously, something must have worked well and worth your time exploring more.
*** FREE RESOURCES ***
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 on executing these trades:
MY TRADES
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?
Also, check out my trading strategies in different market conditions, whether it is bullish, bearish or volatile:
How Not To Lose Money In Trading? | My Trading Strategies For Bullish, Bearish And Volatile Market
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)
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)
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Learning Investment With Jason Cai 