I do live trading on my Twitter and would like to post the real option trades that I am doing, and what my current watchlist is. Follow along on my journey to $1 million.
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PYPL: 4/16 $260c $3.65>$4.40
SNAP: 4/30 60c $4.25>$5.20
Another flat day for the markets, which I take as a great sign. Most tech and semiconductors are moving up in the pre-market on Thursday already. Totally I was up 0.45% yesterday and had some ok luck with a couple of option plays.
Above is a PNL from 1 month exactly. I'd like to take this time to congratulate everyone that stuck with me and weathered the storm during this tech dip. My portfolio is all the way back up from before the dip now, and approaching all time highs. A lot of my semiconductor and tech plays such as TQQQ and SOXL took a huge beat down, but we remained calm and collected through the whole thing and came out on the other side in less than 2 months. I consider that a success for someone having a portfolio heavy in tech and innovation plays.
The last week in February when money started flowing out of tech and into cyclicals, I felt like it was an overreaction, however I got prepared for the worst. I would do it every single time something like this happens, or a dip - cut your short term options. It is way to risky, even if the markets are flat and trade sideways. Once the positions were cut, and a lot were cut for a loss (although small but sometimes it hurts), I moved the capital raised to dollar cost average the dip on my longer term plays. The thought process behind this move is simply that I don't feel like I can go wrong moving money into my "safer" positions that I plan to keep for 5-20 years anyways; I'm just getting a good deal for the moment.
I also had my 15% reserves on the sidelines, and in my Webull account I used margin, although I have the cash to back that up. It acted as a quick deployment for me. I wouldn't necessarily recommend using margin to buy dips, however I also wouldn't not recommend doing it either. It completely depends on your risk tolerance and your cash reserves/liquid assets. So I added about $90k to my long term, buy and hold positions, most of which are ETFs. You might think that I only do ETFs if you just joined me on my Journey to $1 Million, however I don't. According to my strategy that I've always done during dips, right now I'm just mostly in ETFs.
I want to take this moment and reflect on what just happened to us and hope that we can learn somethings for the next dip. There will always be one looming on the horizon. It is best to have a plan in place and follow it when markets start dipping. I also want to reflect on this right now because I see some people down 80% this dip- to many options, market to flat, wouldn't listen to me when I started cutting them late February. Maybe it was out of stubbornness or arrogance, but sometimes it is better to take losses. If you have conviction for a stock in the first place, you should be rejoicing when it dips so you can buy more.
I always hear people fantasizing about dip buying, but when their stocks start dipping they will panic sell. Let it be a lesson learnt and tuition paid for anyone that didn't handle it properly, and for those that did I want to congratulate you. It is a hard thing to do, especially when you have a lot of money invested.
Now that markets are back up and the future of the US economy and stocks looks very bright, there will be a lot more short term options trades coming to this channel. Keep in mind, take your profit; only you are responsible for it. Options are not something that you hang on to forever, or until expiration. They will decay. Especially weeklies are very, VERY volatile. The community asked me to do more weeklies, so I will. All I ask is take your profits when you feel comfortable. Even by the time I execute a take profit and post it on twitter, it might have already changed. My point being, don't wait for me to take profits.
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