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So a while back, I mentioned that I was watching $AMC to buy calls under $14.50. For those of you who don't know, I did a total of two option plays and blew up my Webull account to under $30. I've been doing very small trades to the point that I was able to afford an OTM $AMC call, so that's what I did. Given my history and unfamiliarity with options, I was bound to make mistakes, but I wanted to show you what I did anyway. I drew out the P&L here of what I did vs what I should've done, with the red section being my risk, and the green being the actualized profit. You'll see that right above where I sold, there was a giant red candle. That scared the crap out of me. I saw my profit go from over 25% to under 10% almost instantly. In the middle of the next green candle, I sold. My option value went from 0.34 to 0.38, 12% in 12 minutes, pushing my full account up 8%. This is very good, but it could've been a lot better. I was scared to lose it all and I wanted to lock down what I had. What I should've done was notice that the red candle and the green candle both stopped at the 55 SMA, meaning a bounce was likely. It ended up riding the 10 SMA up and through the 100 SMA. What I should've sold at the first candle to open below that moving average at 3:47. There, the option was valued at 0.47. The profit would've been 38% in 22 minutes... insane. Am I upset? Not really. I didn't lose money, and what I lost out on amounted to maybe ten dollars. What's important is that I learn to manage my positions and play the charts, not my emotions. In case you're curious why I'm messing with something this risky in the first place, the stock only moved 1.32%. Within less than 2% of movement, options allowed for a 38% profit. They're high risk but extremely high reward if you play your cards right. #options #otm #call #AmateurInvesting
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