[21 June 22 Trades] Bought Meta, Alphabet & Tesla LEAPS PUT

The stock market rallied on 21 June 22 with Tesla leading the way. At one stage, its share price increased more than 12% but it eventually closed with a 9.35% increase. The tech stocks and tech stocks were among the best performers.

Why I Bought More PUT Contracts (Alphabet, Meta & Tesla)

I bought the following PUT contracts on Alphabet, Meta and Tesla and the contract details are below. Buying a PUT contract is a bearish bet, so why do I buy more PUT contracts when the market is rebounding?

I believe that any rally now, no matter how many days/ weeks it lasts, is short-lived and not likely to be a signal of the market bottoming and the start of a new bull run. The only market bottoming will happen when inflation is under control and there are more than 3 consecutive months of decline in CPI data to prove inflation has peaked and is declining.

I can wait a few days until the rally has ended before buying the PUT contracts to get the premium at a lower price (when the share price increases, the premium drops because the share price moves even further above the strike price) but I thought I may just invest a small capital for now and add on more PUT contracts if the share prices of these companies continue to go up. I think when the stock market rallies to such magnitude in a bear market, it could be a bull trap and share prices could start to come down soon.

More Downside For Meta Shares

When the whole tech sector rallied but Meta (Facebook) was in the red, I worried for the future of this company, especially when I have a bunch of Meta CALL options contracts expiring in Sep 2022. That is why I increased my capital on Meta PUT contracts and bought 4 LEAPS PUT contracts expiring in June 2023, to claw back some capital when the CALL options expire worthless in Sep 2022.

The below table is a summary of the capital allocation for my LEAPS PUT portfolio:

My target is to get to the 45k mark which is 10% of my LEAPS CALL portfolio, to act as a hedge, should the market continues to crash in 2023 if the US economy goes into recession or the great depression.

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One thought on “[21 June 22 Trades] Bought Meta, Alphabet & Tesla LEAPS PUT

  1. Why buy puts now? How much meat left for it to go down? Short at the lows , long at the high. Lol. Don’t throw away money pls.

    It’s going to chop. Ur puts n calls will become worthless. Please make a post abt this in 2yrs time.

    Gg. Good luck

    Like

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