Some of my JAN2024 -450p have been assigned overnight, resulting in a margin call.
Normally I'd sell the shares and then sell the puts again (or JAN2025), but this would again put me on razor thin cash margin with more pain if we drop further or don't rally soon.
Also a "wake up call" was that the -450p premiums for JAN2025 are only $2 more than the JAN2024 ones. So one year of theta for only $2.
It took some soul searching but I bit the bullet and closed out aaaaaaaaaaalll my dragging ITM sold options. (JAN2023 to JAN2025, between -300p and -500p, some csp's, some bps).
Many of these I have been "managing" for months or more than a year since sugar hit the fan with Elon dumping after the hertz rally, and then Ukraine, inflation, recession, etc.
It's not nice for my account (now I'm down 66% from my portfolio highs), but I still have something left of which the value does not depend on time, luck or hope.
It was a tough decision but in case TSLA would drop further or we stay flat for a year (war/inflation/recession/macro's), this will have been the better decision. Now I will rebuild, in a safe, slow and greedless manner, learning from my mistakes and the lessons learned from this thread.
My main focus right now will be:
- either capital preservation;
- or share count preservation.
If I sell a short term put, then the money backing that put (should it trigger) shall not be touched, ever. And unless I have a great reason to roll, I'll let the shares get assigned.
If I sell cc's, I'm not rolling them unless there's a very good reason to.
After taking the hit I took today, I don't mind options ending up ITM. I'll (try to) only open trades where I don't mind that outcome.
Yes, some of you have stated some of these mantras before, and I thank you for it, but lessons sink in the best when you experience the consequences of your mistakes (greed, basically) for yourself.
I'm still bullish on TSLA long term, but now I'm only in shares and cash. And I intend to only make trades to slowly but surely increase either cash or share count.
(I'm thinking csp on dips to turn cash into either more cash or shares at a discount, and cc's on rally's to turn shares into shares+cash or cash (above share purchase price. No margin. Ever. No BPS / BCS. Ever)
This way I won't ever have to worry being put in a situation where my account goes to zero, or worse: I owe money to my broker after an ugly margin call.
I'm still young and have a job, so I can add shares once in a while.
I don't know if I'll ever go for LEAPS again, but in the current macro environment I'm going to hold off on those until I see some improvement in the macro's and the world is ready for the next bull market.
Apologies for the long post, I just wanted to write out my thoughts for future recollection. The market can do whatever it wants for as long as it wants now, I'm ready and shall not lose any more sleep over it.
Good luck to all and be safe out there.
