In my previous update on my LEAPS CALL portfolio, I share about the total capital allocation for each company as well as the total capital allocated for the respective contract expiry dates.
My spreadsheet also contains the details of all the 958 options contracts that I have bought, e.g. date of purchase, premium paid, share price when I purchase the CALL options…etc.
I came out with a new table to help me have a better overview of the profit/ loss of each position, so I can plan the strategies ahead. The options contracts are consolidated by the same strike price and expiry date, which are further sorted by expiration date.
From this table, I also know my total unrealized loss and the capital that I can redeem if I were to sell everything now. As you can see from the above table, my 485k portfolio is currently down by 75%. If it is not for the recent tech rally as well as me buying some new contracts to average down on the longer expiration dates of CALL options, the percentage loss would be higher.
Most of the CALL contracts that are expiring soon (between now to Jan 2023) are suffering heavy losses (more than 90%). This is due to Theta (time) decay and the fall in stock prices in the last 8 months. It is likely that I will suffer heavy losses in these options contracts expiring by Jan 2023, or lose all $95,225 capital on these positions.
For the options contract expiring between June 2023 to Jan 2024, it is more hopeful because the percentage loss ranges from 37% to 97%. Other than having more time value left in the contracts, I have been buying over the past few weeks to bring down the average price of some positions.
What Is My Plan Moving Forward?
I am considering selling the options contracts that are expiring by Jan 2023 to realize the unrealize loss but at least salvage some capital instead of letting all of them expire worthless. My Sept 22 Meta CALL option contracts have become worthless more than one month before expiration date (premium usually decay exponentially in the last month of contract), so it is important for me to act fast instead of wait till November or December 2022 to act for the options contracts expiring in Jan 2023. If the rally is not going to continue or if the market is going to stay sideways for the next few months (Aug to Nov), it will be better for me to sell off these CALL contracts before they become worthless.
As of today, I can still salvage $8,671 from the $95,255 invested capital if I were to sell off all the contracts expiring by Jan 2023. That would constitute to a $86,584 or 90.9% loss on the invested capital.
I can then invest these capital onto the LEAPS CALL options contracts that are expiring in June 2023 to Jan 2024. If the market rises thereafter, I will still benefit from those LEAPS CALL contracts. If the market tanks, I will not risk losing these contracts and 100% loss when they expire worthless.
I will observe the next couple of weeks to see how the market is performing and making a decision by end of the month. If anytime I sense that the market trend is reversing and the rally is ending, I will do a painful cut loss on these counters, so that I can live to fight another day.
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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:
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
After accumulating more than 600k of unrealized losses on my portfolio, I wrote this article to encourage friends and investors who are also losing a lot of money to the market.
If You Are Feeling Depressed From Losing Lots Of Money In The Stock Market, Here’s An Article For You
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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