The stock market performed relatively well in the month of November and there were a number of rallies, especially after the release of the October CPI reading and a dovish speech from Fed Chairman Jerome Powell about not raising rates too aggressively until it crashes the economy.
I was initially doing alright for the month of November until a couple of bad trades wiped out all of my profits for November.
My Vertical Spreads were generating good returns:
Read more here:
The short trades on buying and selling CALL and PUT gave some decent returns as well.
The highest gains came from the Wheel Portfolio, mainly from returns of Covered CALL contracts due to the continuous fall in share price for Tesla stock. Selling Covered CALL is bearish so when share price drops, the premium becomes cheaper to buy back and close the contracts.
As one stage in November, I was at one stage up more than 9k of nett gain in total options profits.
However, an early assignment on my Bear CALL trades on Apple made me end up with Apple shares and Apple PUT. I predicted the wrong trend thinking that Apple’s share price will continue to fall and ended up selling my Apple shares and holding my Apple PUTS. But Apple went up instead and I had to sell those PUT contracts at a loss. After I sold the PUT contracts, Apple’s share price crashed, which would have allowed me to make a gain instead of a loss, if I had held on for just one more day.
The loss from selling Apple PUT wiped out half of my profits for November 2022. The other half of November’s profits was wiped out when the Apple CALL contracts that I bought lost half their value when Apple kept falling in share price too. I sold them all at a loss when I anticipated that there would be a bigger selloff coming up.
More details in this article:
I had another early assignment for my remaining Apple spread contracts but this time round, I managed to guess the right trend and made a profit off them. This allowed me to end the month in green instead of red.
The total earnings from options increased by $2,596.36 for the month of November.
It is agonizing to watch those almost 10k profit reduce to just 2.5k but I think I learn alot from all these mistakes, especially when it comes to dealing with early assignment and not to panic sell the stocks or the options contract. Also, profits are profits and having a little profit is better than none or ending the month on a loss. All these lessons learnt will help make me a better trader that will benefit me in the longer run. I hope that by sharing these experiences and lessons learnt, it will help you in some ways too. All the best!
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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!
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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:
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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
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