Reversal of Fortunes
What a big change in the past 2months, I remembered updating my yearly resolution plans when I realized all my financial goals for 2021 were hit, setting new targets of repeating the gains which led to "performance stress" where I begun to oversell to max out the limit (ie.utilized nearly every available dollars balance in my ThinkOrSwim platform).
Initially, my portfolio started with about 10 different counters which I sold put options on, then the series of China clampdowns drove down prices so fast that the usual tactical maneuvers of rolling over results in double & double & double down, before I know it, my put options losses ballooned to 3-4x. Over the past month, I closed off other counters which results in risk concentrations over 2 specific counters, BIDU (Baidu) and BABA (Alibaba) to raise available dollars for roll overs. Until the deltas hit .90+ so much so that, towards expiry, I cannot even roll them over without taking debits as the time value (of even 3months+) are not enough to cover the ITM losses. My paper profit of almost USD70k late July reversed into losses (currently $2-3k losses YTD that hit my capital), a reversal of +USD70k to -USD3k! Ouch!! 😭
Most of the losses were taken when I closed my BIDU put options sold & reduced my exposure to BABA.
I took assignment of 200 BABA shares at strike of USD220 when the price closed at USD157.96 on 21 August 2021.
This experience forced me to research & explore other tactical maneuvers to reduce losses, other than simply taking the losses, I also sold calls at expiry price to reduce the losses (2x premiums from put sold & new call sold), hopefully as price recover, the premiums from puts roll over & call sold at or above put's strike I will be able to gradually recover my account.
This reversal of fortunes also reminded me to be humble & always remember the risk management & diversification rules as well as setting cut loss of 1% limit & avoid rolling over more than once to avoid becoming "married" to the position & suffer huge losses with a prolonged downtrend like many of the Chinese tech shares.
Investing in my Education & Community Support
Adam Khoo & his team launched a new "Beat the Market" sale, as shared in my earlier post, knowing the techniques is only at most 1/3 of the winning share, the critical part of risk management if not monitored can easily reversed the fortunes like what I did. Also, I am lacking of social support of other options traders to discuss & exchange ideas, hopefully with the investing into my own education, am purchasing bundle 5: Ultimate Profits (promo price until 1 Sept 2021 https://btm.piranhaprofits.com/sale), I know I can make the money many folds back. With the community support, hopefully I can avoid drawdowns like what I been through the past 2months.
God bless & may the trends be with you! 🙏🍀
