Hi all,
For investing, I tend to be one who happily buys dips which has worked out well and is probably a strength. Conversely, I think I'm too quick to sell once things start going well which probably hurts me more than helps.
I bought a bunch of HOOD calls recently after the last earnings report was bad because it seemed obvious to me that Jan-Mar was going to be bad but the market picked up in Apr so the May 13 report would likely spike prices. My prediction was that the combined May 13 and then similar June reporting would push HOOD into the low-mid 90s (or higher) before the June monthly so I bought a lot of calls at 80 for the June monthly. This was my first time buying a good amount of short calls, previously I had always either sold short term calls or bought LEAPs.
However, when the market spiked today to 81.5ish, the calls were up nearly 100% so I caved and sold them all to lock in the profit. That much profit is normally great, but if I had been completely wrong and HOOD tanked my loss would have been 100% so not actually that impressive.
What is normal strategy when buying short term calls? I'm more familiar with selling puts where if I'm 75% profit pretty quickly I'll cash out. However, if I limit my upside on short term calls by checking out too quickly I might be hurting my ability to properly enjoy the large gains if right.
Anyway, just pondering. This was my first foray into buying non LEAP calls so still very unsure about my strategy here. Comments/thoughts/wisdom appreciated 🙂
Posted by Vilgan