[Options] Managing Our Long CTVA June Calls

Sean McLaughlin
June 2, 2022

Mea Culpa --- I'm letting this post stand because it offers two good lessons for traders:

1. The risk management laid out below is how I manage long calls heading into expiration. So anyone holding a similar position will benefit from this or a similar risk management plan.

2. It offers a lesson on keeping good records. I messed up. For ASO subscribers, we're actually in the September calls, NOT JUNE CALLS. We have plenty of time until our position expires and therefore we actually don't need to do anything here yet but enjoy our #FreeRide. The confusion for me is that I also have June calls on in my personal portfolio and I did not take careful notes in my personal spreadsheet. And when reviewing, I accidentally confused these June calls as part of the position we put on for ASO. So, yes, I personally will be exiting my June calls soon (as laid out below). But for those of you who followed me into our September calls trade, we've got time. 

Sorry about the confusion.

 

 

Hello everyone! It's the beginning of the month and during this time, I always review any open positions that have options expiring in this new month.

I reviewed our open positions with June options (LNG and MAIN) in this week's Options Jam Session video for ASO subscribers (bookmark that link!), but I failed to mention our long June 60-strike calls in $CTVA! Somehow, it slipped my radar when I was putting this week's presentation together.

So let me catch you up on what's happening with this winning trade here.

We entered these June 60 calls back on February 9 and we were able to sell half of our position at a double on March 15:

Selling half of our calls at a double removed all of our original risk capital from the trade, enabling us to weather some volatility that came our way shortly after!

Fast forward to today, CTVA has recovered and whatever we can sell these remaining calls for this month will represent pure profit!

Our calls are currently in-the-money and this will remain so as long as CTVA stays above $60 per share. For now, we'll keep holding as long as CTVA holds here or moves higher. However, if CTVA breaks below a 3-5 day low (currently at $61 per share), then I’ll be closing the position. If CTVA moves higher, I’ll continue moving my trailing-stop level up based on a 3-5 day low.

This was another win for the good guys! Congrats to any of you who stuck with this trade.

If you have any questions on this trade, please send them here.

~ @chicagosean

P.S. We do trades like this regularly. If you'd like to leverage Best-in-Class technical analysis into smarter directional options trades, try out All Star Options Risk Free! Or give us a call to learn more: 323-421-7991.

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