The market has continued its rally going into August 2022. I am hoping that the rally lasts as long as possible so I can minimize my losses on my LEAPS CALL portfolio. At the same time, I added some positions in order to reach that target earlier.
When I looked at my top 6 biggest losses, 3 of them come from my Jan 24 LEAPS CALL options on Tesla and Alphabet. It was due to the fact that I bought these LEAPS CALL at high premium prices last year, when the stock market was at its all-time-high and there was much time value in the contract. I am not too concerned about the stock holdings as I am confident they will still exist in the next 5 years.
As there is no way to restore the time value for the long-dated CALL options contracts since time has already lapsed, the only way to repair the contracts is for the stock price to rise so that the premium price can rise above or near the average premium price that I paid to own these contracts. So, what I am doing now is to average down on the premium prices that I paid for these contracts and hopefully the rally can help me reach breakeven price faster.
So, these are the contracts that I have bought over the last few trading days:
I bought more options contracts into 3 positions that are currently having the biggest (unrealized) losses and I bought Meta (Facebook) as well. These 3 companies made up more than 62% of the capital of my total LEAPS CALL portfolio, thus, it is critical that I channeled my limited resources (funding) to try to rescue the options contracts in these 3 companies.
Concluding Thoughts
In a bullish run, the LEAPS CALL strategy can help to magnify gains but there are risks in this strategy too. A safer way would be to sell OTM PUT but that would also require some form of capital as collateral. If my goal is not to save my failing LEAPS portfolio and have capital on hand, I would probably go for this strategy and keep rolling the PUT contract as the share prices rise.
I have shared more details on the different strategies for different market conditions in this post:
How Not To Lose Money In Trading? | My Trading Strategies For Bullish, Bearish And Volatile Market
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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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Learning Investment With Jason Cai 