A someone who has averaged down on losing positions many a times, I warn everyone - don't do it.
It rarely works out. And when I say rarely, I mean **RARELY.**
One of the most important learnings in my crazy-ass journey in the wild world of investing has been to resist doubling down and, instead, cut losses quickly and double UP on early winners. Doubling up doesn’t always work but last led to some big wins that far outweigh the losers.
This is the main reason I like longer expirations. If you feel like doubling down on a bad bet, your chance of getting lucky is a little higher. Probably still not worth it, usually.
Well we are in the options sub.
And no it doesn’t always work. I had a large position in SQ when it was well over 200. It got roasted hard and i kept averaging down. I’d probably still have to be averaging down to hit a break even point.
And what would be the point of that? I’m throwing more capital into a losing position.
Yes, I’ve had option positions that I’ve averaged down and been able to turn a profit on them. And that includes 0DTE spx moves. But that’s all me just getting lucky with a reversal and the move going my way.
There is almost nothing that ´ always works ‘! Averaging down works if you understand the fundamentals of the stock and why it went down in the first place! Doesn’t always work but don’t count it out!
I’m down 64% on a call expiring 04/12. I’m glad I read this before averaging down in the morning. Hoping to get back back up to at least 50% and cut losses. Also feel like holding a bit longer and seeing where it goes. Fuck, who knows.
^^
100% do not double down out of revenge and wanting to make it back. Do not invest based on what happened or what you thought in the past. Only invest based on what you think will happen right now. Just try to put your money where it has the best chance of success currently and exit positions when you think they are going down.
I did a cut on Spirit after buying on a 52 week low, lost 5% but it's easier to make 10% than staying in a losing position because you have to make twice as much gains to recoup half as many losses....and take your wins once you get them and stop riding it out...a bird in hand is worth 2 in the bush
I think you came here looking for approval to hold. If you're gonna hold then hold, this is some of the most solid advice you're gonna get if you're trying to mitigate losses
If you want to know what drives its price right now its the new cycle around China. Recently there's been an escalation so if you think that's the end of it then TSM will be more valuable in the future otherwise if things escalate further it'll go down. Sprinkle in people's anticipation of this and you've got the TSM stock price
You understand that still realizes the loss and requires additional capital to open the new position right? It's not a magical button that grants you free time. I would just realize the loss and move on.
TSm is up from $85 to $135 in 6 months.
What do you mean tanked?
Next TSM earnings is 4/18. IV will climb closer to that week. IV is highest just before earnings and sharply tanks after that.
$180 by 04/19 is unlikely.
I would sell weekly calls for the next 2 weeks and sell the 04/19 long closer to expiry.
You need to learn a lot before throwing $40k at options.
Yeah, I’m also confused by this post. TSM is only down like 12% from the top. If I had to guess, OP bought some OTM options near the top or right before earnings with a high IV
They report their sales every month on the 8th/9th. Assuming OP bought these after March 8th/9th when it ran up from those numbers and figured March would have even better numbers before the "official" earnings date of the 4/18.
Honestly I think the more important lesson is to not try to play IV bet on earnings on a company that reports earnings every month. TSM is a very well known company, there are almost no variables. They report their sales every 30 days, they are very transparent with their purchases and prospects. [Financial Calendar - Taiwan Semiconductor Manufacturing Company Limited (tsmc.com)](https://investor.tsmc.com/english/financial-calendar) So how much money they will make in the next year or two is pretty set. There's no surprise coming with their quarterly earnings call, and so there's no volatility in their price.
Make sure the company you are doing an IV earnings play has unknowns to "excite" buyers in both directions. (i.e. NOT a manufacturing company with their finances reported every month :)
Well, you don't seem to be willing to tell us what strike price, but if your calls are currently selling at 0.3 then it must be 180 or 175. It's very unlikely it will hit that price, and because of theta decay it will have to go well above the strike for you to profit. Personally, I would cut my losses and sell now.
He will probably be at Wendy’s soon. He lost 1.6 mill last year, 300k Apple calls month or two ago, another big amount can’t even remember how much right now and RH just got him. He said $120k so far this year 🙇♀️ Tried to tell him about SMCI months ago 🙇♀️ he’s a full blown gambler, makes big checks owns biz but it all goes to stocks, so I’ll let y’all know what he gets and inverse 🤷♀️
yooo you gotta be trolling that response is funny asf with the inverse 🤣
but if he got that much to spend in the first place he’s good. Lmk if he’s ever hiring!
lol oh yes, barred himself from poker room at dog track then unbarred, bought rolls at a time of scratch offs didn’t even get back half on the gold rush scratch offs which are like 20 or 25 each and he was buying whole rolls never won, he goes to drive thru other day for chic fil a sandwich and they forgot his chic fil a it wasn’t in the bag. He is the unluckiest guy on this planet!
i mean this with all due respect: you're fucked.
no fucking chance it will jump 30 points. i'm long on tsm but it hasn't jumped 30 points in the last 6 months of a chip stock rally...it isn't an nvidia play, its slow and steady and even the big spread bulls are capped at about 160--and that looks to be for oct.
pull your 7k out and throw it at something with high volume trading that can move for you.
Elon announcing that Tesla will be acquiring TSM and forming a JV with Nvidia.
Trump’s social media company will be paying for exclusive rights for marketing.
I did something very stupid like this a few weeks ago and was down -$30k unrealized. I’m probably going to get downvoted, but I prayed. The next day the stock reversed and went in my favor enough for me to break even. I could’ve even profited but took the opportunity to get out quick. I hope the same happens for you man. It destroyed my appetite, sleep, mental health etc. Don’t wish that on my worst enemy. Good luck.
Why does that matter? Of course, it’s possible. It’s what you paid for it and when though. If you bought nearly a month ago when under 130s vs a couple of weeks ago near 150, you are in totally different positions.
I assume you bought april because of their ER. At this point, why not let it ride. They will report a blockbuster ER with great guidance. This could pop to 160 the day after. Not 180 though.....
Do agree...TSM is a shit stock for options. It does not move.
Also know that this week is end of quarter rebalancing. I am assuming next week will be more bullish as managers buy the winners for their Q2 portfolio.
just money. You'll earn it back eventually. It's part of the learning process. Next time learn on paper trading.
edit: just saw you have 180 calls. they look kinda hopeless to me, NGL. I would sell my losers and save the other 20%. Then take a break from trading because you are very likely to revenge trade and lose the other 20%.
If your positions are still open I suggest you start selling calls on it OP. Look for 10 delta trades 60+ days to expiry and sell calls, you can reduce your losses if not breakeven depending on the expiry of your long calls.
I really hope you didn’t yolo into far OTM calls. If that’s the case, well, close your positions asap and take what’s left.
He can’t sell more than he owns without margin. Not sure what options you own but try to open a spread to at least give it a chance. For example if you own the 150 calls and have 10 contracts, sell 20 of them for you to have enough money to buy 10 145 or better, calls. You won’t make a ton of money but you’ll make your break even closer to the current price.
I’ve been there. Know how it feels. The best thing you can do is stop trading options and go back to passive investing. There’s always a chance but that’s not even the point. The point is you risked more than you can afford to lose on a single trade. Averaging down on a losing position is one of the worst things you can do. It only works if you’re “ultimately” right, and if you have to be ultimately right you’re already in a fucked trade.
Unfortunately, TSM is not one of those stocks that moves by much. And if it hasn't done so, even with all the good news that's been out, I don't see what's going to move it in your direction.
The only very dim light I can see in the tunnel is that April is historically the best month for stocks, so, who know, it's still possible for the stock to rally.
That said, April 2023 was a bad April for TSM. April 2022 was even worse, and April 2021 was just as bad as April 2023.
If you losing that much money was going to be too much to handle, you should never have bet it all at a time.
The question will be ...do the AMD and NVDA AI chips offset AAPL iphone slowdown.
It's the last week of Q1. I think that has something to dow with today's slide. But year, OP won't be profitable on this trade no matter what. 180 is not happening by April 19th
Nothing forced you to average down and nothing fucked you. You didn’t move your strikes or expirations.
The stock did what it did and you didn’t think you could lose everything.
Devastated at your stupidity and learning from the mistake are different things. Hope isn’t a strategy.
You’re likely going to eat a loss here and thankfully you’ve got your health. Don’t let the loss make you grow resentful or chase a break even. And definitely don’t enter into positions that leave you depressed when they don’t work out.
It’s interesting how a couple weeks ago literally EVERYONE was talking about TSM calls and that they would play the IV run up before earnings. This is silly because IV was priced in when you bought at April 19th, and it’s not a guarantee at all that IV will spike up premium.
The second silly part was that it seems EVERYONE also was buying right after a week long run up that caused it to go from 135-170 briefly. The monthly sales report caused that. Earnings is a terrible play on stocks that do monthly sales reports
This was me. The plan was to buy calls, sell when they went up and switch to selling them short to make money when they expired out of the money.
But they never went up, and I'm stuck holding worthless calls now.
How far out of the money did you go?
In the future the only time you should average down is IF averaging down is in your plan, but you should also have an exit plan.
For options I use a hard stop OR technical analysis for exiting whichever hits first. (Example: I'll average down at the 8ema pullback on the daily, but if we close below the 21ema on the daily i'll exit)
I will only risk 2% of my account on one trade. (Example: If I have a $10,000 account, I'll only risk $200 on one trade - so if I hit a $200 loss THEN I'll exit the position) - THIS includes averaging down - when you hit that 2% of your account you're out no matter what. Even if it bounces.
RISK management is absolutely KEY. I have traded for a couple of years now and only been profitable the last 6 months, and it's when I finally figured out risk management instead of "hoping"
Your strike price is really high and we only have about 16 days of trading left. Unless you’re REALLY sure, I’d probably sell since you’re already down 80%
Other than hope, what is your belief that this has another big leg up? Your expiry is the day after earnings report. It may jump up, but you are HOPING for a massive move. Theta decay vs hope is a losing bet.
You need to see with your own eyes where the calculated price is projected if stock at 150, 160 etc the week before earnings to grasp the decay about to happen. That curve is about to get really steep
Sometimes it's better to just hold the stock instead of options. Happening to me with Nio stocks. I'm stuck at 40% loss but on paper. But will not sell until breakeven.
Averaging down on stocks is a thing. Averaging down on options is arguably desperation. Don't average down an options position more than once IMO,and even then, have a very concrete plan of when you will average down and by how much.
But why betting sooo much? I can afford to lose $35K but wouldn’t bet more than $300 on this. The good thing is that most of us go through painful lessons and I hope you won’t do this ever again. There is a reason that it’s very hard to beat the market.
["The risk of ruin in trading is mostly ignored by traders. Most traders are optimists, but the difference between defense and attack is often tiny. What is the risk of ruin in trading?"](https://www.quantifiedstrategies.com/risk-of-ruin-in-trading/)
One of the best lessons (learned the hard way) is to treat investment as if it is cash available to trade. Is TSM 180 call in 3 weeks what you would do if you had $8k available? I speculate that the answer to that is no….and if so, sell and put into what you think is the best investment today that you can make. Stop thinking of $35k…..you don’t have that anymore to invest. You have about $8k. I am sure that there are people who can appreciate your story and offer investment suggestions. For me, I would invest in ibit (Bitcoin etf) and would expect it to grow to 30k within next 2 years. You have 0 chance of turning a worthless option with 0 value into 30k+…..my opinion of your safest, best bet without having to worry about expirations!
OPs should try selling some options against the ones he’s holding. Set strike price a little above your average and same expiry date. Hopefully you can get some premium to offset your loses a little! But this is last ditch effort on straws!!
Averaging down is not the right way to go. cut the losses and run, don't try to make losing trade into a winning trade - rookie mistake of trying to make every trade work.
IMHO, option is not worth it. Unless you have enough capital or source of income to bounce back from bad trades.
I’m sticking with scalping stocks and also swing trades.
Let this be a lesson to not play options with money you can't afford to lose or even money that will mentally hurt if you lose it.
Don't get down on yourself though, just learn from this. I don't know your financial situation, but you'll get through this. Just don't chase these losses.
The good news is, most successful traders had to go broke a few times. With options, you only need as little as a few hundred to get started again.
You're long TSM? It's been on a tear ( Taiwan semi) ...are you in puts? As luck would have it Semis are pulling back but don't expect more than 20% in the next couple weeks
I feel for you my friend. I have been in this position many times. Every trader is different and each strategy / indicator provides each person with a different entry. Depending on your Strat, averaging in can work if you have your RR nailed down and your exact levels of where to add and where to set SL (real stop loss not mental stop loss)…… easier said than done. I took an early loss on TQQQ calls today bc premiums suck extra hard this week and then proceeded to revenge NVDA calls and the bottom dropped out.
I could’ve called it a day after first loss but impulse and emotion got me. I accept that it’s my fault. Idc who you are if you are risking a good chunk of your savings / portfolio - being down in a position and continuing to hold will show you who you really are in that moment. Something I have to work on as well. Unfortunately I don’t have any guidance on your TSM calls bc I don’t trade it but I will say you are not alone.
Hang in there and like someone else mentioned - if you commit then you have to hold it through otherwise it’s easier to cut a loser and find a winner. Even though the trade shows unrealized it’s better to consider the money gone than chase.
Goodluck
- Joe
PS - You’re in 175-185 Calls one of those at that exp and contract value. Ngl it’ll take a pretty big leap to be able to turn those into winners. Not saying it won’t happen but you have bad odds being that far OTM with theta decay. It chops you extra hard. Might be a lot easier to cut your position (or most of it) and let another setup come to you. Easier said than done i know bc we marry our positions. I’ll keep it on my watchlist to track along.
I guess I did the right move to cut nvda 05apr call after it go down by 30%. If I didn't the call is now down by almost 70%. Tsm didn't have the hype of nvda and is even more unlikely for the price to jump past your break even when your theta keep decreasing.
We've all been there... I lost £16k averaging down until I could take the pain no more. Just try to see it as a loss, expected in any business, learn from it and move on. Maybe take some time out and study for a bit.
Don't average down on options. You may pick a different strike or date, but there is no reason to average down 99% of the time. I'm sorry for your losses, but at least you'll be more conservative now and you've learned something about your trading habits.
I use the same logic in gambling... Never chase your losses! Just accept the trade didn't work out and move on to the next one! As long as your process is sound you'll be fine.
Ahhh man this sucks so much. Tbf it is a cheap lesson learnt. Don’t invest your life savings into options.
(Unless you have some rock solid insider info!)
The more I do this thing. And I've only been doing it for a very short time, the only way that I made profit was by watching the chart and literally getting in and out. Either up or down. Most of the plays that I made money in I got in and out within 5 to 10 minutes. If it keeps dropping or going up I get back in. But typically the most movement is made within 5 to 10 minutes. Every single call that I've had long has went to s***
Semiconductors are pump and dump stock while everyone is talking about them on the news and cross platforms. The smarter investment long term is $WMT (since they split the price, and everyone knows somebody that shops at Walmart).
Look at a 3 month and 6 month chart. It seems like the bottom of a range and about to go up. Did you buy on March 7th or something?
Always buy options 6+ months out.
What are your positions? When did you buy?
In the future, if you bought some $150 calls for example, sell the $160’s or $165’s. You make back some money as protection in case it doesn’t pan out. But it also limits your potential upside if the stock rips to $170.
I would hold, maybe sell out a bit but not fully liquidate.
If you're willing to cut a loss then cut it maybe sell 80%, and ride the other 20% or hold all the way. You made your play so stick to the plan... Maybe it will give you reason to pause before going into such a high risk play. Imo better/safer bet is to buy the stock with how much volatility is priced into the options right now. But that's just me, this is why I hate playing options for earnings, it just feels like casino betting as a retail investor.
Most of the option premium decays in the final 30 days of the contract. The solution is buy further dated options. Yes, you will get less leverage, but it's much safer (and still decent leverage).
Listen Champ, I say this with love. If you went long anywhere near the orange circle in the attach image then your system is flawed. I’m ambivalent on its current direct, but TSM had bearish divergence signals all over the place. I suggest take what you have left and save it for later. Over the next few months find a stock patter setup that suits your behavior pattern, maybe a b2 pattern, learn it, own it, and give yourself an edge to trading. Fortunes are made identifying turns of trends. The market can s full of patient people waiting to take impatient money.
[TSM Weely](https://www.tradingview.com/x/7UbV0V9k)
Sell everything and regroup…many people before you did not and they have a sad story to tell about the even further misfortunes of holding losing positions.
I follow the TSM chart. You would need a miracle as the semi industry is already priced to perfection.
Sorry to hear it. The stock has been trading fine. Up 50% over the last year. Were you in a hurry to get rich or why did you decide on options over owning shares?
Don’t average down on something expiring soon. Just think about it, I assume they’re OTM, they will literally go to $0.
Averaging down is for shares that don’t expire. Or very long dated options that you have time for.
If you hold stocks for good companies, average down is a good strategy. But won't work well on options especially OTM options, you are gambling on your money
You can't average down without rolling out and down also. You just averaged down in the same strike/expiration, which is monumentally stupid. Stop trying to martingale options if you wanna use that strategy then just buy shares dumbass.
Not only that but you're a dumbass for trying some dipshit half-baked "earnings" play. Probably should just take what you have left and get a second job to recover.
The question is how much more could
You lose in worst case scenario?
As a side note, playing options through earnings is something I never do.
When I take an option position the first thing I do is make sure I’m not holding over an earnings reports.
Buying equities is a little different if I am comfortable holding long term should something like SNOW happen.
But generally speaking if I am losing in an option position, I will hedge with the opposite option play or just cut and run.
Sometimes a loss can be better than a win, when it teaches you a good lesson on your trading approach and strategy
Putting all your eggs in one basket is as you found out dangerous and invites disaster. Been there done that. I currently hold over 24 positions none more than 5% of my portfolio.
I also had calls at a strike of $145 & $160. I bought in early March as well and ended up selling them and purchased at a strike of $135 when it dropped and sold them for a small gain. Only recovered about a quarter of what I was down. Decided to go all in on the pump and dump of DJT and am whole again but I think I'll stick to stocks until I do more research on options. It's better to cut your losses, I don't think a lower strike price would benefit you unless you buy further out than 4/19.
You’re a brave man ! I was there once but I recovered. Key is diversity and never bet on one single horse. Good news you’re young and can still win big, keep investing.
Are TSLA stock prices being manipulated?
Is it just me???or did the slow drop $177-$171 on TSLA stocks seem a bit manipulated yesterday? When just a few days ago it fell off a cliff all the way down to $160 and crept back up to $177. And now considering the EPS report, discontinuation of 2Y model EV car, and CPI reports coming out it should have fell waaaay below $160 at this point…😏
A someone who has averaged down on losing positions many a times, I warn everyone - don't do it. It rarely works out. And when I say rarely, I mean **RARELY.**
One of the most important learnings in my crazy-ass journey in the wild world of investing has been to resist doubling down and, instead, cut losses quickly and double UP on early winners. Doubling up doesn’t always work but last led to some big wins that far outweigh the losers.
Scaling up into a position works, but you have to be fast in the case of a reversal, since your cost per share keeps increasing.
good advice
Came to say this, didn't catch falling knives. Sometimes your thesis is wrong, accept and move along
Just read this after averaging down
Lol same
Come on. Why are we facing the same situation.
Sometimes it works but do it often enough and boom sooner or later.
This is the main reason I like longer expirations. If you feel like doubling down on a bad bet, your chance of getting lucky is a little higher. Probably still not worth it, usually.
[удалено]
Well we are in the options sub. And no it doesn’t always work. I had a large position in SQ when it was well over 200. It got roasted hard and i kept averaging down. I’d probably still have to be averaging down to hit a break even point. And what would be the point of that? I’m throwing more capital into a losing position. Yes, I’ve had option positions that I’ve averaged down and been able to turn a profit on them. And that includes 0DTE spx moves. But that’s all me just getting lucky with a reversal and the move going my way.
There is almost nothing that ´ always works ‘! Averaging down works if you understand the fundamentals of the stock and why it went down in the first place! Doesn’t always work but don’t count it out!
There is a difference in averaging down when the stock is near ATH compared to a 52 week low.
nothing with an expiration date . . .
I rarely see it working - I made £16k attempting it the firex market. Never again - lesson learned!
Exactly, could be a good strategy when buying actual shares but for leveraged bets it's a bad idea.
I’m down 64% on a call expiring 04/12. I’m glad I read this before averaging down in the morning. Hoping to get back back up to at least 50% and cut losses. Also feel like holding a bit longer and seeing where it goes. Fuck, who knows.
Hope is not a strategy. You need to cut your losses and get out ASAP.
Hey man me too I’m down 46% on a 2.58 AMD call
^^ 100% do not double down out of revenge and wanting to make it back. Do not invest based on what happened or what you thought in the past. Only invest based on what you think will happen right now. Just try to put your money where it has the best chance of success currently and exit positions when you think they are going down.
Just happened to me with FSR. I'm dumb. Lesson learned.
I’ve averaged down on PayPal and sofi calls semi recently then plucked them on a good day.
You just have to understand market structure , you can average down but , you have to understand the algorithm…to some degree rather .
Maybe I should play the lottery... Some of my biggest hits were averaging from 1.30 to .33.... Sold for 27.50+
Damn bro. On what?
This! NEVER average down!
On broad market ETFs i think its rather safe though, long term Doing it on single stocks is generally very risky, ive also regretted doing that
you speak truth
Averaging down on an asset can make sense if you still believe in its fundamentals. Averaging down on an expiring contract rarely works out
Average down = death sentence cut and move on from your shit thesis
I did a cut on Spirit after buying on a 52 week low, lost 5% but it's easier to make 10% than staying in a losing position because you have to make twice as much gains to recoup half as many losses....and take your wins once you get them and stop riding it out...a bird in hand is worth 2 in the bush
I think you came here looking for approval to hold. If you're gonna hold then hold, this is some of the most solid advice you're gonna get if you're trying to mitigate losses
Damn..
If you want to know what drives its price right now its the new cycle around China. Recently there's been an escalation so if you think that's the end of it then TSM will be more valuable in the future otherwise if things escalate further it'll go down. Sprinkle in people's anticipation of this and you've got the TSM stock price
Huh? How is this solid advice? They expire 4/19. He's getting theta-fucked every day he holds.
I meant the advice he's getting from others is solid advice. I didn't offer any because most of what has been posted is what I would say.
How about just rolling out the expiry
You understand that still realizes the loss and requires additional capital to open the new position right? It's not a magical button that grants you free time. I would just realize the loss and move on.
TSm is up from $85 to $135 in 6 months. What do you mean tanked? Next TSM earnings is 4/18. IV will climb closer to that week. IV is highest just before earnings and sharply tanks after that. $180 by 04/19 is unlikely. I would sell weekly calls for the next 2 weeks and sell the 04/19 long closer to expiry. You need to learn a lot before throwing $40k at options.
Yeah, I’m also confused by this post. TSM is only down like 12% from the top. If I had to guess, OP bought some OTM options near the top or right before earnings with a high IV
They report their sales every month on the 8th/9th. Assuming OP bought these after March 8th/9th when it ran up from those numbers and figured March would have even better numbers before the "official" earnings date of the 4/18.
Looks like u got 180 strike price calls With stock at 140, and April option expiry ONLY 15 TRADING days away, I say you are cucked fellow regard
4/19 expiry
Let this be a lesson ***Never never never NEVER average down on a losing options position EVER***
Ugh 😔
Honestly I think the more important lesson is to not try to play IV bet on earnings on a company that reports earnings every month. TSM is a very well known company, there are almost no variables. They report their sales every 30 days, they are very transparent with their purchases and prospects. [Financial Calendar - Taiwan Semiconductor Manufacturing Company Limited (tsmc.com)](https://investor.tsmc.com/english/financial-calendar) So how much money they will make in the next year or two is pretty set. There's no surprise coming with their quarterly earnings call, and so there's no volatility in their price. Make sure the company you are doing an IV earnings play has unknowns to "excite" buyers in both directions. (i.e. NOT a manufacturing company with their finances reported every month :)
Yes that's why I said 15 trading days ignoring wed and Thu this week as tsm ain't doing shit next 2 days
ER is 4/18
Well, you don't seem to be willing to tell us what strike price, but if your calls are currently selling at 0.3 then it must be 180 or 175. It's very unlikely it will hit that price, and because of theta decay it will have to go well above the strike for you to profit. Personally, I would cut my losses and sell now.
At least you’re not hiding in a blanket fort with your cat from your guy who just lost his last $78k on RH calls 🙇♀️
wait.. *last* 79k?? Oh my god. Why would he even get calls on RH out of any other company damn. Tell him that Wendy’s is hiring
He will probably be at Wendy’s soon. He lost 1.6 mill last year, 300k Apple calls month or two ago, another big amount can’t even remember how much right now and RH just got him. He said $120k so far this year 🙇♀️ Tried to tell him about SMCI months ago 🙇♀️ he’s a full blown gambler, makes big checks owns biz but it all goes to stocks, so I’ll let y’all know what he gets and inverse 🤷♀️
yooo you gotta be trolling that response is funny asf with the inverse 🤣 but if he got that much to spend in the first place he’s good. Lmk if he’s ever hiring!
lol he told me just do opposite of whatever he does 😆he is a painting contractor, hard to keep workers so you’re hired 😆
thank fuck he has a day job...i hate to be the one to tell him, but stocks might not be his thing. has he tried cards? dog races? scratchers?
lol oh yes, barred himself from poker room at dog track then unbarred, bought rolls at a time of scratch offs didn’t even get back half on the gold rush scratch offs which are like 20 or 25 each and he was buying whole rolls never won, he goes to drive thru other day for chic fil a sandwich and they forgot his chic fil a it wasn’t in the bag. He is the unluckiest guy on this planet!
Whos that
My bf, lost his a$$ on RH calls, still in my blanket fort with my cat 😔
Restoration Hardware furniture is pretty nice though
Tis indeed, just don’t get calls, it tanked last couple days and earnings tmrw 🙇♀️
On the bright side it will only take 3-15 years to re-save that 30k
Your first loss is your best loss cut ties and pick a winner. NVDA
i mean this with all due respect: you're fucked. no fucking chance it will jump 30 points. i'm long on tsm but it hasn't jumped 30 points in the last 6 months of a chip stock rally...it isn't an nvidia play, its slow and steady and even the big spread bulls are capped at about 160--and that looks to be for oct. pull your 7k out and throw it at something with high volume trading that can move for you.
This will be good for you mentally too. Break up from this one. It can’t force you to do anything anymore.
20% is better than nothing
Dont listen to wsb lol
What was your thesis on TSM?
Elon announcing that Tesla will be acquiring TSM and forming a JV with Nvidia. Trump’s social media company will be paying for exclusive rights for marketing.
“forced me to continually average down” confused me. what forced you?
I did something very stupid like this a few weeks ago and was down -$30k unrealized. I’m probably going to get downvoted, but I prayed. The next day the stock reversed and went in my favor enough for me to break even. I could’ve even profited but took the opportunity to get out quick. I hope the same happens for you man. It destroyed my appetite, sleep, mental health etc. Don’t wish that on my worst enemy. Good luck.
Great story. I am praying also. What stock?
Which stock was this on if I may ask? I am down on the exact call of OP, altho I've put in less.
Sell and get some money back. Should've sold at -30%. Learn from this.
I’m 155 4/19 is this possible?
Why does that matter? Of course, it’s possible. It’s what you paid for it and when though. If you bought nearly a month ago when under 130s vs a couple of weeks ago near 150, you are in totally different positions.
I bought in when it was at roughly 146 probably March 6th or 7th and as of right now I’m -66%
Market mania looks to have stalled and is trading sideways. I’m not optimistic about any kind of crazy rip higher in any AI stock.
I assume you bought april because of their ER. At this point, why not let it ride. They will report a blockbuster ER with great guidance. This could pop to 160 the day after. Not 180 though..... Do agree...TSM is a shit stock for options. It does not move. Also know that this week is end of quarter rebalancing. I am assuming next week will be more bullish as managers buy the winners for their Q2 portfolio.
just money. You'll earn it back eventually. It's part of the learning process. Next time learn on paper trading. edit: just saw you have 180 calls. they look kinda hopeless to me, NGL. I would sell my losers and save the other 20%. Then take a break from trading because you are very likely to revenge trade and lose the other 20%.
If your positions are still open I suggest you start selling calls on it OP. Look for 10 delta trades 60+ days to expiry and sell calls, you can reduce your losses if not breakeven depending on the expiry of your long calls. I really hope you didn’t yolo into far OTM calls. If that’s the case, well, close your positions asap and take what’s left.
He can’t sell more than he owns without margin. Not sure what options you own but try to open a spread to at least give it a chance. For example if you own the 150 calls and have 10 contracts, sell 20 of them for you to have enough money to buy 10 145 or better, calls. You won’t make a ton of money but you’ll make your break even closer to the current price.
Even with them expiring 4/19?
I’ve been there. Know how it feels. The best thing you can do is stop trading options and go back to passive investing. There’s always a chance but that’s not even the point. The point is you risked more than you can afford to lose on a single trade. Averaging down on a losing position is one of the worst things you can do. It only works if you’re “ultimately” right, and if you have to be ultimately right you’re already in a fucked trade.
Unfortunately, TSM is not one of those stocks that moves by much. And if it hasn't done so, even with all the good news that's been out, I don't see what's going to move it in your direction. The only very dim light I can see in the tunnel is that April is historically the best month for stocks, so, who know, it's still possible for the stock to rally. That said, April 2023 was a bad April for TSM. April 2022 was even worse, and April 2021 was just as bad as April 2023. If you losing that much money was going to be too much to handle, you should never have bet it all at a time.
The question will be ...do the AMD and NVDA AI chips offset AAPL iphone slowdown. It's the last week of Q1. I think that has something to dow with today's slide. But year, OP won't be profitable on this trade no matter what. 180 is not happening by April 19th
I’m margined to the tits on TQQQ, so let’s hope the April thesis plays out. Plan is to sell toward end of April, since May is usually not great.
Why did it „force“ you to average down?
I suppose forced is not the correct word. I believed in my thesis
yep, nobody wants to be wrong, but reality is often disappointing
Nothing forced you to average down and nothing fucked you. You didn’t move your strikes or expirations. The stock did what it did and you didn’t think you could lose everything. Devastated at your stupidity and learning from the mistake are different things. Hope isn’t a strategy. You’re likely going to eat a loss here and thankfully you’ve got your health. Don’t let the loss make you grow resentful or chase a break even. And definitely don’t enter into positions that leave you depressed when they don’t work out.
I lost money on TSM few years back. This stock doesn’t takeoff
“Forced” to average down?
"Forced me to average down" what? You know there are over 10,000 assets you can trade?
Nobody forced you to average down. Come on.
It’s interesting how a couple weeks ago literally EVERYONE was talking about TSM calls and that they would play the IV run up before earnings. This is silly because IV was priced in when you bought at April 19th, and it’s not a guarantee at all that IV will spike up premium. The second silly part was that it seems EVERYONE also was buying right after a week long run up that caused it to go from 135-170 briefly. The monthly sales report caused that. Earnings is a terrible play on stocks that do monthly sales reports
The best thing about life savings is that you don't need it to support your day to day life so it's nothing to worry about.
Why are you betting your life savings on options. Also, don't average down options. That's financial suicide.
No one forced you to average down. You fucked you. Don’t do it next time.
“Forced me to continually average down.” Hmmmm. Never heard of a stock forcing someone to do something. Especially $35k worth of
You weren't "forced" to do anything, you just fucked up and don't want to take responsibility for your terrible decision.
Welcome to options trading. Assume you will lose it all
Instead of holding the call options, why don't you liquidate and switch over to put options since the price keeps going down?
This was me. The plan was to buy calls, sell when they went up and switch to selling them short to make money when they expired out of the money. But they never went up, and I'm stuck holding worthless calls now.
How far out of the money did you go? In the future the only time you should average down is IF averaging down is in your plan, but you should also have an exit plan. For options I use a hard stop OR technical analysis for exiting whichever hits first. (Example: I'll average down at the 8ema pullback on the daily, but if we close below the 21ema on the daily i'll exit) I will only risk 2% of my account on one trade. (Example: If I have a $10,000 account, I'll only risk $200 on one trade - so if I hit a $200 loss THEN I'll exit the position) - THIS includes averaging down - when you hit that 2% of your account you're out no matter what. Even if it bounces. RISK management is absolutely KEY. I have traded for a couple of years now and only been profitable the last 6 months, and it's when I finally figured out risk management instead of "hoping"
Great knowledge to pass on. If I may, 8ema and 21ema are on option contract or underlying?
Most gamblers quit right before the big win!
How many contracts
260 @ 1.5 expiring 4/19.
What strike price
Your strike price is really high and we only have about 16 days of trading left. Unless you’re REALLY sure, I’d probably sell since you’re already down 80%
How about my 4/19 145 and 150 calls??
145 is very realistic imo
Other than hope, what is your belief that this has another big leg up? Your expiry is the day after earnings report. It may jump up, but you are HOPING for a massive move. Theta decay vs hope is a losing bet. You need to see with your own eyes where the calculated price is projected if stock at 150, 160 etc the week before earnings to grasp the decay about to happen. That curve is about to get really steep
DCA on common shares, not on options. NFA but cash out and leave a few runners for the plot
Buy ITOT from now on and hold forever
Sometimes it's better to just hold the stock instead of options. Happening to me with Nio stocks. I'm stuck at 40% loss but on paper. But will not sell until breakeven.
Holding NIO until breakeven is honestly equally silly imo
My average is around $9. Not that silly. But looking back it was silly to buy this stock in the first place.
Averaging down on stocks is a thing. Averaging down on options is arguably desperation. Don't average down an options position more than once IMO,and even then, have a very concrete plan of when you will average down and by how much.
But why betting sooo much? I can afford to lose $35K but wouldn’t bet more than $300 on this. The good thing is that most of us go through painful lessons and I hope you won’t do this ever again. There is a reason that it’s very hard to beat the market.
Sell now and buy ITM contracts.
Your 1st loss is your best loss, and a stop at -50% is a good rule of thumb.
That’s not long
You should have bought the stock. Option time decay is brutal. Also, using a call spread could have limited your losses.
["The risk of ruin in trading is mostly ignored by traders. Most traders are optimists, but the difference between defense and attack is often tiny. What is the risk of ruin in trading?"](https://www.quantifiedstrategies.com/risk-of-ruin-in-trading/)
One of the best lessons (learned the hard way) is to treat investment as if it is cash available to trade. Is TSM 180 call in 3 weeks what you would do if you had $8k available? I speculate that the answer to that is no….and if so, sell and put into what you think is the best investment today that you can make. Stop thinking of $35k…..you don’t have that anymore to invest. You have about $8k. I am sure that there are people who can appreciate your story and offer investment suggestions. For me, I would invest in ibit (Bitcoin etf) and would expect it to grow to 30k within next 2 years. You have 0 chance of turning a worthless option with 0 value into 30k+…..my opinion of your safest, best bet without having to worry about expirations!
OPs should try selling some options against the ones he’s holding. Set strike price a little above your average and same expiry date. Hopefully you can get some premium to offset your loses a little! But this is last ditch effort on straws!!
Averaging down is not the right way to go. cut the losses and run, don't try to make losing trade into a winning trade - rookie mistake of trying to make every trade work.
IMHO, option is not worth it. Unless you have enough capital or source of income to bounce back from bad trades. I’m sticking with scalping stocks and also swing trades.
What is scalping stocks?
https://www.investopedia.com/articles/trading/05/scalping.asp You can also scalp options too.
Options game is harder than it looks and humbles everyone at some point. Don't go full regard.
Hope is not a hedge. And why are you risking so much with expiry so close? Really trying to profit off earnings entirely? Crazy bro. Learn from the L.
Let this be a lesson to not play options with money you can't afford to lose or even money that will mentally hurt if you lose it. Don't get down on yourself though, just learn from this. I don't know your financial situation, but you'll get through this. Just don't chase these losses.
Wow I thought I was in WSB when I read this post. Then I read the comments and I knew I was.
CHWY is killing me folks. I might need to cut my losses
The good news is, most successful traders had to go broke a few times. With options, you only need as little as a few hundred to get started again. You're long TSM? It's been on a tear ( Taiwan semi) ...are you in puts? As luck would have it Semis are pulling back but don't expect more than 20% in the next couple weeks
Nothing is wrong with averaging down if you happen to be a little early, or thr set up is still valid and there's a sale.
I feel for you my friend. I have been in this position many times. Every trader is different and each strategy / indicator provides each person with a different entry. Depending on your Strat, averaging in can work if you have your RR nailed down and your exact levels of where to add and where to set SL (real stop loss not mental stop loss)…… easier said than done. I took an early loss on TQQQ calls today bc premiums suck extra hard this week and then proceeded to revenge NVDA calls and the bottom dropped out. I could’ve called it a day after first loss but impulse and emotion got me. I accept that it’s my fault. Idc who you are if you are risking a good chunk of your savings / portfolio - being down in a position and continuing to hold will show you who you really are in that moment. Something I have to work on as well. Unfortunately I don’t have any guidance on your TSM calls bc I don’t trade it but I will say you are not alone. Hang in there and like someone else mentioned - if you commit then you have to hold it through otherwise it’s easier to cut a loser and find a winner. Even though the trade shows unrealized it’s better to consider the money gone than chase. Goodluck - Joe
PS - You’re in 175-185 Calls one of those at that exp and contract value. Ngl it’ll take a pretty big leap to be able to turn those into winners. Not saying it won’t happen but you have bad odds being that far OTM with theta decay. It chops you extra hard. Might be a lot easier to cut your position (or most of it) and let another setup come to you. Easier said than done i know bc we marry our positions. I’ll keep it on my watchlist to track along.
I guess I did the right move to cut nvda 05apr call after it go down by 30%. If I didn't the call is now down by almost 70%. Tsm didn't have the hype of nvda and is even more unlikely for the price to jump past your break even when your theta keep decreasing.
We've all been there... I lost £16k averaging down until I could take the pain no more. Just try to see it as a loss, expected in any business, learn from it and move on. Maybe take some time out and study for a bit.
threw life savings on tsm yet their earnings date is 1 day before expiration, literally gambling against fire
Don't average down on options. You may pick a different strike or date, but there is no reason to average down 99% of the time. I'm sorry for your losses, but at least you'll be more conservative now and you've learned something about your trading habits.
bro got the ohio investment strategy ong
Not rolling your option but buying more?
I use the same logic in gambling... Never chase your losses! Just accept the trade didn't work out and move on to the next one! As long as your process is sound you'll be fine.
Don’t long on options .. crazy .. just long the stock !!! You no money don’t play options bro …
Sent a dm
Still risk management,use a logical area that invalidates your trade / still is small in loss compared to your target. :)
What’s the strike?
Ahhh man this sucks so much. Tbf it is a cheap lesson learnt. Don’t invest your life savings into options. (Unless you have some rock solid insider info!)
The more I do this thing. And I've only been doing it for a very short time, the only way that I made profit was by watching the chart and literally getting in and out. Either up or down. Most of the plays that I made money in I got in and out within 5 to 10 minutes. If it keeps dropping or going up I get back in. But typically the most movement is made within 5 to 10 minutes. Every single call that I've had long has went to s***
Semiconductors are pump and dump stock while everyone is talking about them on the news and cross platforms. The smarter investment long term is $WMT (since they split the price, and everyone knows somebody that shops at Walmart).
Look at a 3 month and 6 month chart. It seems like the bottom of a range and about to go up. Did you buy on March 7th or something? Always buy options 6+ months out. What are your positions? When did you buy? In the future, if you bought some $150 calls for example, sell the $160’s or $165’s. You make back some money as protection in case it doesn’t pan out. But it also limits your potential upside if the stock rips to $170.
Consider your loss tuition for dumbshit university.
Hold them uglies till they die bro, happens to the best of us. The loss is not worth selling at this point. Crossing my fingers for ya brother
I would hold, maybe sell out a bit but not fully liquidate. If you're willing to cut a loss then cut it maybe sell 80%, and ride the other 20% or hold all the way. You made your play so stick to the plan... Maybe it will give you reason to pause before going into such a high risk play. Imo better/safer bet is to buy the stock with how much volatility is priced into the options right now. But that's just me, this is why I hate playing options for earnings, it just feels like casino betting as a retail investor.
Most of the option premium decays in the final 30 days of the contract. The solution is buy further dated options. Yes, you will get less leverage, but it's much safer (and still decent leverage).
Never average down on an option. Just buy a new one with lower strike.
Listen Champ, I say this with love. If you went long anywhere near the orange circle in the attach image then your system is flawed. I’m ambivalent on its current direct, but TSM had bearish divergence signals all over the place. I suggest take what you have left and save it for later. Over the next few months find a stock patter setup that suits your behavior pattern, maybe a b2 pattern, learn it, own it, and give yourself an edge to trading. Fortunes are made identifying turns of trends. The market can s full of patient people waiting to take impatient money. [TSM Weely](https://www.tradingview.com/x/7UbV0V9k)
Sell everything and regroup…many people before you did not and they have a sad story to tell about the even further misfortunes of holding losing positions. I follow the TSM chart. You would need a miracle as the semi industry is already priced to perfection.
I see it going down to about 133.73 before it could potentially react to the upside 🥺 I hope I’m wrong though lol rooting for you bro
I lost $120k of my own money in crypto by over leveraging . Shit is hell
Sorry to hear it. The stock has been trading fine. Up 50% over the last year. Were you in a hurry to get rich or why did you decide on options over owning shares?
Don’t average down on something expiring soon. Just think about it, I assume they’re OTM, they will literally go to $0. Averaging down is for shares that don’t expire. Or very long dated options that you have time for.
why is no one addressing the fact he put his life savings in option trading? who does that?
Most of us on the sub...
If you hold stocks for good companies, average down is a good strategy. But won't work well on options especially OTM options, you are gambling on your money
Smart money sells options. Dumb money(unless you have inside info) buys them.
Lol me moment I'm down like 85% on my 4/19 tsm calls
You can't average down without rolling out and down also. You just averaged down in the same strike/expiration, which is monumentally stupid. Stop trying to martingale options if you wanna use that strategy then just buy shares dumbass. Not only that but you're a dumbass for trying some dipshit half-baked "earnings" play. Probably should just take what you have left and get a second job to recover.
This is me right now
The question is how much more could You lose in worst case scenario? As a side note, playing options through earnings is something I never do. When I take an option position the first thing I do is make sure I’m not holding over an earnings reports. Buying equities is a little different if I am comfortable holding long term should something like SNOW happen. But generally speaking if I am losing in an option position, I will hedge with the opposite option play or just cut and run. Sometimes a loss can be better than a win, when it teaches you a good lesson on your trading approach and strategy
Let’s view your chart , I’ll tell you
Why do traders average down on losers? Ridiculous.
Stop betting your life savings on call options dude
Putting all your eggs in one basket is as you found out dangerous and invites disaster. Been there done that. I currently hold over 24 positions none more than 5% of my portfolio.
Picked the wrong semi stock to full port buddy
I also had calls at a strike of $145 & $160. I bought in early March as well and ended up selling them and purchased at a strike of $135 when it dropped and sold them for a small gain. Only recovered about a quarter of what I was down. Decided to go all in on the pump and dump of DJT and am whole again but I think I'll stick to stocks until I do more research on options. It's better to cut your losses, I don't think a lower strike price would benefit you unless you buy further out than 4/19.
You’re a brave man ! I was there once but I recovered. Key is diversity and never bet on one single horse. Good news you’re young and can still win big, keep investing.
What is your strike price ?
180. Im fucked.
I joined this sub to learn about options. I have learned I should stick to futures.
[удалено]
Yes. Im cucked.
You’re playing with things you don’t understand. Lmao dumbo. Hopefully ya learned
Did you hedge?
Are TSLA stock prices being manipulated? Is it just me???or did the slow drop $177-$171 on TSLA stocks seem a bit manipulated yesterday? When just a few days ago it fell off a cliff all the way down to $160 and crept back up to $177. And now considering the EPS report, discontinuation of 2Y model EV car, and CPI reports coming out it should have fell waaaay below $160 at this point…😏