Weekend ramble... none of it advice, just things I've observed as of late...
Too much conviction on the direction of the $TSLA SP, or that it "has to be" this value, or that value by a certain date. This is a very dangerous thinking IMO. There're zero guarantees where $TSLA will be trading next week, in a month or this time next year. Tesla as a company might be knocking it out of the park, but sure looks to me that macro takes precedence and from where I'm sitting the economic outlook is bleak, to say the least
TSLA stock split, to the moon! Nope
TSLA massive earnings beat, ATH incoming! Nope
It's a world of pain, most of the time
I've become very risk-averse. I reduced my LEAP exposure dramatically and always assume that all my short trades will go ITM, then what will I do, what's the strategy?
In my case, the consistently losing approach is to buy back a losing position and reopen ATM... every time I have done this, the SP has reversed and wiped me out in the opposite direction. Each time I act on fear, mostly because I had too many contracts, now I have less at risk, I don't stress as much, plus I've learned to close positions out early, I like 80% profits, but if 50% presents itself within 24 hours, I'll normally take that too - another opportunity will arise
Imagine if you took +50% from every single trade you made, would add up pretty fast
And every time I closed out an ITM position, after a couple of weeks, if I had just rolled, been patient, would have gone OTM - fear is the mind-killer
If covered calls go ITM, then I will sell the LEAPS/shares, cancel out the losses and the SP will come back down, will buy back in again, not 100% guaranteed, but very, very likely
Where do we go from here? I have no clue... my gut feeling is that the indexes are close to bottoming-out, maybe another 10% on the $QQQ, but maybe it goes 30% further down from here, then what? I'm very cautious with writing puts, they're all fully cash-covered. I did buy 10x 5/20 +p900's end of March, which have been a great comfort to me, providing some downside insurance and helping me sleep at night. I do write against those (making a calendar spread), so will have recuperated my initial premiums, but likely capped the gains I otherwise would have made, but still a good situation
Just think about risk-management a bit more, folks...