To The Moon

Longevity vs intensity? Actually, in my current playbook, there's little difference between. Let me explain a little.

I have been in the market long enough to see ups and downs. Post COVID is feeling more and more like the market in 1999 - 2000. Markets do not seem to know fear... it appears like I am the only oldies out there... 

Obviously, I am not like Warren Buffett, so I  an't simply sit out the market. However, at the same time, I can't pretend like nothing happened like this crowd.

What do I do? I adjust my playbook for this market. I must confess that this "adjustment " is only possible with the entry of brokers like 🐯. I have heard about options but never had the courage to try. With 🐯 educational materials and past research, I slowly stepped into this world to create a new playbook.

In options, compared to conventional investment, as leverage is involved, risk increased exponentially. Understand this is very important, especially in this uncertain world. When war normally accompanied market cautiousness, we get ATHs (all time highs)! 

I am still practicing this playbook, so it's lots of fine-tuning along the way at the moment. I have been playing with different aspects of options. Started relatively conservatively by selling put options, I realised that I need quite a bit of starting capital. However its win rate is good. The important part is you must want to hold the principal if assigned. 

I then moved on to try buying calls. I stumbled around unsuccessfully. It appears that luck has a lot to play here. I persisted with different time periods to test the time decay effects. I also used the charts of the underlying principal counters to assist with my analysis. I realised that technical analysis is still applicable here, just that rather than being more liberal with chart directions, I would need to more clearly identify price actions. This is combined with real time companies related announcements or activities to predict expected price movement. Time sensitivity due to time decay makes this necessary. I must admit luck is still required however the analysis helped to inform potential direction and therefore increased success rates.

Finally, I began exploring slightly complicated (in my opinion) options, such as straddle strategy in options. This straddle strategy looks good for expected volatile counters, such as latest success in$Quantumscape Corp.(QS)$ 

My primary motivation in learning options is to run it as my hedge against sudden downturns in the market. I remember in 2000, I see my winnings suddenly evaporated [Facepalm]  [Spurting]  [Cry]  and I always thought what if I had enough insurance to cover for the unexpected episode. I have that in place currently. Although they have been bleeding slowly given today's euphoria with the current market participants. Luckily, all those of my other options trade winnings more than did their parts.

This new playbook is for short term gains but also work towards my long term goals. I believe if I am able to master this skill, short term intensity will also bring about its longevity. I see no compromise between the two. In fact, I believe they complement each other well enough for near and long term success.

What do you think? Wish me luck to get the balance right... [Tongue]  

Special mention to @Shernice軒嬣 2000 for sharing her little options playbook so I realised that I was not alone in getting calls options repeatedly wrong... and adjustments are sometimes needed to make the initial trade decision work...

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