Why I Am Buying CALL Options Again In 2024 | USD5.6k Profits In Feb 24 | Bullish Options Strategies 2024

After cutting huge losses in Dec 2022 when many of my LEAPS contracts lost much of their value, I didn’t think that I would be buying options again. The SOP strategy that worked really well for me in 2023 is about selling PUT options, rather than buying CALL options.

However, I was inspired by my recent lotto wins in both Meta (14x) and Palantir (3x), where I used a very small capital to get a big return after the share price rose sharply following great earning results.

So, I tried buying CALL options on stocks that are on fire, and these counters include Nvidia (fueled by AI revolution) and Coinbase (fueled by crypto rise).

February has been quite a fantastic month for stocks in terms of price appreciation and even more so for options, which produces a greater return as it is a leverage derivative.

Buy OTM CALL Strategy

Since the start of Feb 24, I have been buying OTM CALL options on stocks such as Nvidia, Coinbase and the returns have been great (USD5.6k net profits in February alone using this strategy). This strategy is quite similar to the strategy that I used in 2021 when I bought OTM LEAPS CALL and profit massively from the bull run back then.

Some of my more profitable trades includes the 14x returns from trading Meta, and the over 100% gains in Palantir and Coinbase. You can see my trade updates on the same day on my Patreon page or you can use my album of profitable trades as a reference while you plan your trading strategy for 2024.

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Concluding Thoughts

The reason of buying OTM CALL is to keep my capital low so that if the trade worked against me, I would have a smaller loss. Losing most if not all of my capital would have a relatively lesser impact on my overall portfolio.

It is worth noting that most of my trades closed in a few days to a week. This is because as the time drags on, the contract will drop exponentially in value even without the share price dropping. Always remember that time becomes our enemy when we are options contract buyer. A LEAPS (long-term options contract) can help slow down the impact of time, but it would come at a great cost due to the value of the extra time premium.

Therefore, the trend must work harder and perform better in our favour if we wish profit from the options contracts that we bought. This may happen when companies report better than expected earnings or forecast or when there is a series of good news that created much optimism on the stock itself. It can also be a new bandwagon that investors are keen to jump on to buy at the lowest price. Some examples include Electric Vehicle (EV), Metaverse, AI or Crypto.

Lotto Play

I usually start a small trade prior to the announcement of earnings as a lottery trade for the stocks that I am bullish on and I am anticipating good earnings. If the stock can jump significantly by more than 10 ~ 20%, there would be good profit for taking the following trading day. Otherwise, I am prepared to lose most, if not all of the money that I have invested into that trade. Do bear in mind the risk of IV crush of such trades and IV can quickly come down after earnings are released and cause premium to drop sharply even when there is an increase in share price after earnings.

Lastly, I hope you find this sharing useful and if you have any comments or questions, please feel free to ask them. Please always bear in mind that the trades above or previously shared in this blog are for sharing purpose only. You will still need to do your own research and build your own conviction on your intended positions before you trade.

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