Been some time since I've posted, but it has been quite the "living vicariously through you" learning experience, as I've watched many of you evolve from margin or cash-covered puts and covered calls to iron condors. I began dabbling in ICs myself last week after having finally unwound some rolled positions from a few months ago. All in, it's been a very productive year of premium selling, tracking to 50% YTD return on selling options around my core positions.
As a refresher on where my positions landed:
- On our last round of deep sell-offs, I found myself needing to sell covered leaps against core shares to raise cash to settle margin calls; I have since closed all of those sold leaps for net credits (yay!);
- I have rebuilt my mix of leaps vs. core shares, now sitting at 25/75% mix; half the leaps were bought ITM/ATM, the other half were bought at 1000/1020 Jan 2024; they're all now ITM; several at 100%+ returns at this stage;
- I finally unwound a set of margin sold puts, dating back from Feb/Mar of this year, netting the entire accumulated rolled amounts;
Last two weeks I entered my first ICs using 50% of the margin that was freed up from finally closing the margin sold puts, and netted some handsome weekly profits.
This week has so far been an exercise in patience.
- Last Friday, using 30% of margin, sold 1000/1050 BCS in to this week; I was waiting for a pull back to enter BPS to form the IC;
- Today, using another 20% of margin, sold 1100/1150 BCS;
- With the margin already tied up by the two batches of BCS, sold 770/820 BPS;
- This was in addition to CCs (790/795/800 11/5 expiry) against my core shares and some LCCs (1050 12/17 expiry) against about half my leaps; those I'll just keep rolling, maybe forever!
The chart looks and smells like a blow off-top, but we'll really only know over the next couple days. If it looks like the top may not yet have been reached, then I will be looking to move the 1000/1050, likely rolling to try to improve strike by widening the spread. This will likely consume most of my remaining margin, and is playing with fire. Part of me also wants to roll the BPS (staying in this week) up and tighter to multiply contract count, but if this is a blow-off top, that could be a true set up for disaster. So, practicing patience.
I was hoping to see some other position management learnings from many of you today, but overall sentiment seems to be that this is just the beginning of the rally and many are just getting out of the way, eating the loss, and repositioning for the next legs.
I may instead join you all in that thought process, absorb the loss against my YTD cumulative gains (eating current loss would be 1/6 of YTD gains, if we end at a complete loss... 1/3) and move on, but I'm very tempted to wait out the next couple days to see if the blow-off materializes.