I recently opened a position on $BULL and wanted to get some feedback on my thesis and potential exit strategy. I’m relatively new to options and trying to move away from "feeling-based" trades toward more data-driven DD. I’m sticking to buying only for now, so my only risk is the premium I pay. Figured this would be a good way to enter into options trading without blowing up my account.
The Position:
• Contract: $7.50 Call, 5/15 Expiration
• Cost Basis: $26.66 (Current unrealized gain: ~20%)
• Underlying Thesis: Following recent news regarding retail brokerages and the proposed day trader margin reduction (from $25k to $2k), I anticipated a strong sector rally.
Valuation & Exit Plan:
Based on my current analysis, I’ve calculated an intrinsic value for the underlying between $11.00 and $13.00, which represents significant upside from current levels. However, I’m conscious of Monday’s open and the impact of time decay as we move closer to May.
I’m looking for feedback on a few points:
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Given the 5/15 expiration, how much should I be prioritizing the "time is on my side" outlook versus locking in a 20% gain early to avoid volatility?
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Does the $11-$13 intrinsic value range seem realistic given the recent news cycle, or am I overlooking a potential "priced-in" factor?
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For those who trade momentum on regulatory news: would you look to sell into the Monday open strength or hold for a larger delta move?
Appreciate any insights from the more experienced traders here.
Posted by theisiscrisis