I shared Plan A and Plan B on how I intend to save my 453k LEAPS portfolio and this is my Plan C. This may be a high risk and foolish move to some people so please exercise your judgement and take as much as you need from this sharing.
Plan C revolves around using one stock to help turn around the whole portfolio and the stock is Tesla. Again, for all the Tesla haters, this post is not for you.
Tesla has been my golden goose since I ventured into the US market in 2021 and half of my gains through options trading came from Tesla’s trades. I currently own 200 units of Tesla at an average purchase price of USD1,085, which I use to sell Covered CALL options to earn monthly sideline income. My breakeven price on Tesla, after deducting all the premiums/ profits collected from my trades, is lower at around USD878.79.
Tesla is trading at USD699 currently and while it is a distance away from its all-time-high price of USD1,243, it is still up by 15% year on year.
Tesla is a volatile stock as you can see from the price movement over the last 12 months. It generally performs better towards the end of the year when there will be record sales and deliveries.
The upcoming quarter may not be a good one due to Shanghai Gigafactory shutdown and GigaTexas and GigaBerlin just starting operation earlier this year. Also, its investment in Bitcoin also caused it to accumulate accounting loss approaching $500 million as Bitcoin’s price has crashed from 32.5k to 21k.
However, I believe Tesla’s share price is not likely to stay in the USD600 to USD800 range until 2024. There will be periods where the price will crash due to FUD (Fear, Uncertainties, Doubts) and there will be periods where events, news, and earnings will push the share price up.
When Do I Execute Plan C?
Tesla is currently my 2nd largest holding in my LEAPS Portfolio (see table below). I hold 6 LEAPS CALL contracts (strike price USD2,475) expiring in Jan 2024. The average price per contract is USD 10.3k. The premium last traded on 15th June 2022 was USD2.48k.
I will be looking for opportunities to add on in the coming months if the premium falls below USD2k, due to bad earnings calls, further crypto crashes, or more negative news from the macro-economic environment. When Tesla’s share price spikes up in the future, the CALL contracts will make substantial profits to cover the losses from the rest.
Concluding Thoughts
The 3 plans are what I have come out with to avert a total 453k loss. Hopefully, they can work in some ways so that I can reduce my losses in my LEAPS portfolio. Please do not follow without careful consideration because I may have a higher risk tolerance than you. I am prepared for the worst case of losing 453k by Jan 2024 if there is a bigger crash coming up, and over the next few years.
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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 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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