The recent market volatility, triggered by Trump tariffs and DeepSeek's announcements, has reinforced the importance of risk management in trading. 

I initiated a sell put in $Semiconductor Bull 3X Shares(SOXL)$ with a strike price of $26.50, approximately 20-30% below the market price. However, as $SOXL oscillated wildly, my paper loss peaked at 1200%, rendering the collected premium negligible.

To mitigate potential losses, I employed a wait-and-see approach, allowing time decay to work in my favor. As expiry approached, SOXL traded between $26.25 and $26.50 (so close, yet so far!). Finally decided to roll the position out for two weeks, adjusting the strike price downward to avoid assignment.

*Key Takeaways*

1. *Risk management is paramount*: Even with a seemingly low-risk trade, market turbulence is unpredictable and can lead to significant losses.

2. *Position sizing and adjustment are crucial*: Effective position management can help mitigate potential losses.

3. *Time decay and premiums can be deceiving*: Relying solely on time decay or premiums can lead to unexpected losses.

4. *Stay vigilant and adaptable*: Market conditions can change rapidly, and traders must be prepared to respond accordingly.

5. *Have a plan for assignment and potential losses*: A well-thought-out plan can help minimize losses and avoid assignment.

$SOXL 20250221 24.0 PUT$