In early 2022, I initiated my exploration into Options trading, a decision coinciding with a market peak—an inopportune timing for such a venture. As a novice, my enthusiasm outpaced my understanding of prudent options trading practices.
Initially, I purchased Call Options during market downturns, anticipating a subsequent upswing. Despite these options having a maximum three-month expiration, the events of the past year resulted in significant losses, with many options closing at a substantial deficit or expiring worthless.
Despite these setbacks, I maintained faith in two stocks, AMD and Microsoft, prompting me to opt for Leap Call options expiring in January 2024. Although both stocks faced challenges during the 2022 bear market, I held steadfast, acknowledging the imprudence of relying on the expectation of a miraculous recovery. This realization marked a critical learning point. With an enhanced comprehension of Options Trading, my performance has seen a positive shift in the past six months. Continuous learning remains a core tenet as I strive to refine and enhance my option trading skills.
Returning to the Leap Calls, while AMD remains in a deficit, I have generated additional income through the strategic sale of Poor Man's Covered Call options as a hedge against the Leap Call position. Though I am nearing a break-even point, the impending expiration of the AMD Leap Call prompts a decision to close the position to recover capital.
Conversely, the Microsoft Leap Call has proven to be a fortuitous investment. Rebounding from a low of $210 in November 2022, Microsoft is now reaching new highs, propelled in part by the prevailing AI trend. While I remain optimistic about the continued growth of the AI sector, the imminent expiration of the Leap Call within two months has led me to opt for closure to preemptively mitigate the impact of substantial time decay on accrued profits.
Recognizing budget constraints preventing the acquisition of 100 Microsoft shares, I plan to continue purchasing Leap Call Options. This strategic approach aligns with my preference for executing the Poor Man's Covered Call strategy, facilitating the collection of additional side income as Microsoft continues its upward trajectory.
@TigerStars @TigerEvents @Tiger_SG @Daily_Discussion @CaptainTiger
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In fact, options are really not suitable for ordinary investors
I want to know why you have confidence in AMD
I can tell you learned a lot from your experience.
MSFT is also a stock I like very much