Options #4 De-risking my options
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I sold my $550 Jun 2026 calls and went back to shares.
I also sold my MSTY position and went back to MSTR shares.
Last update , I said that I sold my MSTR shares and bought this $550 Jun 2026 MSTR calls. Now I did the opposite and went back into shares
Emotions(impatience) got the best on me on why I switch to calls in the first place. Because of that, my porfolio was dominated by call options.
I did not think of the risk. I thought more of the profits without thinking or dismissing what could go wrong. Remember call options are bound by time, meaning if your call options/leaps don’t hit your target by expiration, you lose your money.
If MSTR hit $1000, $2000 or $3000, yes I will made more money by having more call options. But If I do that, my position size of call options will be very big.
It can turn out great, but I need to account for things that could go wrong.
It is just like you are on a game show and you already won $100,000 but you can continue and try to win $250,000 but you could lose the $100,000.
Would you go home with $100,000 or go for the $250,000 but with the possibility of going home with nothing?
Just like people who sold at $50,000 bitcoin last cycle but bitcoin top at $69,000. Yes, they miss that another $19,000 move but it is not bad if for example they bought bitcoin at $10,000
This is what I am trying to do now, to de-risk again my portfolio by going into more shares. I am not saying that MSTR shares doesn’t have risk. I am just stating that there is time risk with call options. Because you have to be right on a specified amount of time because call options have expiration date.
Emotions got the best of me and switch from shares into call options. Now I am going back to shares because I realized that I need to be more careful with risk and consider the positon size of my call options.
Yes I could be missing profits if MSTR did well but I have to be fine with that.
I also bought another 2 $55 call options on IBIT expiring on Jan 2026
I am betting that bitcoin will at least 2x from now up to Jan 2026.
If I am right bitcoin doubling will be IBIT at $110.
Of course this could go wrong. Bitcoin may just stay at these levels. Or bitcoin could also go down more.
But If bitcoin 2x, the estimated profit for that call option will be $4,150
WARNINGS
Only bet what you can afford to lose. Don’t bet all your portfolio into options just because you wanted to magnify or leverage your gains. Options is like leverage. It is a risky play because you need to be right on a limited time.
That’s why the first thing you should ask when buying call options is that am I willing to lose what I am going to bet?
Read a lot or watch a lot of YouTube videos about options. Also practice if you can before buying. I did practice buying some cheap calls on bitcoin miner before I bought BITO calls. I am also practicing selling covered calls and cash secured puts in preparation for the strategy I will be using for my IBKR portfolio.
Cold Storage, no leverage bitcoin is still the Gold (bitcoin) standard. Having a lot of cold storage bitcoin is still the best. Options has lot of risks. Cold Storage bitcoin should be the majority of your stack
📚Where to learn options?
Here is a tweet from X showing resources on where to learn options: https://x.com/btc_overflow/status/1880010930269880585
I agree with almost all the resources included in that post, so if you are interesting on learning about options. I suggest looking into those resources.
That’s it for this post. Hope you find this valuable.
Thank you for reading!