The holidays are crazy for most people, and some might say the market is crazy right now as well. Whether or not you think the latter is true, the one thing that is for sure is you sometimes need to take a break from trading. The holidays are a perfect time.
I have written several posts at various times of year on the importance of taking time off as a trader or investor. Trading can be very stressful, and anything we do in life that is stressful cannot be sustained in a proper way without time away. In addition, time off gives traders and investors a chance to review previous trades and work on or adjust their trading plans.
Not only can the holiday season be stressful, but it can also be hectic and filled with lots of social plans and events. As a trader or investor, your mind must be in the game so to speak. If you are keeping a crazy and hectic schedule, how likely is it that you are going to be profitable? The answer is not very.
We all need to take some time off from trading here and there, and that’s not dependent on whether we are doing well. When there is the added volatility the holidays can bring, it is smart to take a break and concentrate on what is really important in life…family.
Happy Holidays!
John Kmiecik
Senior Options Instructor
Market Taker Mentoring
2 Responses
I know that the downside of writing covered calls is that you give up any capital gains on the stock beyond strike, but after trading in calls for over 40 years, I just had the biggest “give up capital gains” event ever this past week. I own 300 shares of MAXR (Maxar Technologies), with an average cost basis of $15.07. It’s been in the $20-28 range for some time and was $22.85 as of 12/15. I sold Jan 30’s on it on 11/15, netting $298. On the early morning of 12/16 Advent Intl. made an offer of $53/share in cash for MAXR, and it closed at $51.93 on 12/16/COB. If the deal goes through, expected about mid-’23, I’ll be giving up $6900 in CG I could’ve made if I hadn’t sold the calls. However, (1) I’ll still come away with a nice profit of $4800 (maybe more if I can roll the calls just before expiry), and (2) I managed to make over $10K selling calls in ’22. I can kick myself, but there’s a couple of Wall Street sayings: “Bulls make money, bears make money, but pigs get slaughtered”. And: “Nobody went broke taking a profit”.
Hey Pete, So you made $10,000 and missed out on $6,900? Sounds like covered calls worked out. right? That’s the thing. You’re playing the probability curve. You grind out extra income over and over. And once or twice over 40 years, you miss out on a lottery ticket. Guys like me and you are not in it for lottery tickets, right?! I know it sucks when you focus on that one thing. But when you look big picture, it’s nice.