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Hey guys I haven't posted in a while and just want to let you know I wasn't able to dodge the market downturn. This update is to show how I'm doing since I was posting regularly for a while and don't want to leave you hanging.
The last few weeks I haven't been selling weeklies. I would still be able to make around $100-$200 per week using $100,000 so, but thats not worth it for me.
So basically I've been kinda locked out and I am taking a break from weeklies. For the time being I'm just going back to traditional investing while selling some monthly options and getting by until hopefully this recovers.
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I only made around $3000 income this quarter, not including unrealized losses, compared to around $40,000 the previous 6 months.
I really underestimated how much a bearish (or at least not bullish) market would reduce premiums. When I started this I thought weeklies would continue to have solid premium unless the market totally crashes.
As for my roster, these are the shares I had to buy when I was assigned on cash secured puts. I'm down about $20,000 in unrealized losses.
If I want to sell options, I could still sell weeklies on NVDA and GOOGL, but would rather do monthlies. And TTWO i have to go all the way to quarterlies since it dropped the most.
I don't want to keep selling cash secured puts if the market continues to go down and keep losing even more.
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For total returns I still have around $23,000 in profits if I subtract the $20,000 in unrealized losses from the total income of $43,000. My maximum risk I put was $238,000 in week 19 so I rounded that up to $250,000. This makes the total percentage return about 9.3% in 9 months.
Its not bad, but I am losing to SPY and QQQ which are up 12% in the same time frame. I feel pretty demoralized and defeated.
If you have ever gotten 2nd place in a competition, like losing the championship game, its that twisted feeling of feeling like a total loser even though you overall objectively still got a good result.
All the time I spent opening and closing positions, drawing trajectory lines, updating my excel sheets, calculating implied volatility range, and making these posts feels like such a waste when someone who just bought index funds and didn't even pay attention ended up making more.
I still think there is something to this, an edge built in, but you have to have some innate skill or ability, almost supernatural that can't be explained, to be really good at this. I learned I'm not the John Wick of investing, and just turned out to be another statistic of the 99 out of 100 people who couldn't beat the market or whatever.
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While I'm taking a break I'm reflecting on what I did wrong:
1: Too much in one stock. The TTWO position I have is 3 times larger than the NVDA and GOOGL positions. This is also the biggest loss and could be considered getting steamrolled. I got married to a stock, also one that is kind of obscure and relatively unknown didn't help.
2: Position sizing. I had the right idea when I reduced the amount of risk I was taking, but I should have reduced even more. Possibly for a $250,000 account size I think in the future putting 5-10% of that per week would be better, even during upward trends.
3: Not hedging. I don't hedge and need to research how to effectively do this to protect my account in case of big drawdowns. I'm looking into buying protective puts 6 months to 1 year out as insurance. I have to figure out how to do this without taking too many losses if the market goes up and reduces my profits.
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So yea, I'll still update when I have something useful to add, but for the time being I'll be taking some time to clear my head after making mistakes.
The first 6 months every dip was bought back quickly, but this time so far the dip stayed dipped for me. Looks like could be more pain ahead, and I'm just hanging on.
Thanks for reading. Stay safe out there, and good luck.