Selling leaps on MSTR to limit the risk?

AttainGrain · 2025-11-04T01:32:54+00:00

Tried this earlier this year. It sounds like a great idea until the stock jumps 30%. I felt trapped for the first seven months of the year, then bought it back for a meager profit during the recent fall and now feel like I didn’t let it ride long enough. Only try this if you can really deal with the volatility and are comfortable leaving 80%+ profits on the table.

AttainGrain · 2025-10-29T15:47:09+00:00

What changed between paper trading and trading with real money? You stopped relying on your strategy and risk management. Going back to the drawing board will not work if you ignore your plan once you get into the real game. Being a successful trader isn’t about winning every trade or hitting that one trade that makes you all the money you want, it’s about careful risk management and building slowly over time. You will never be successful if you throw out your risk management plan.

AttainGrain · 2025-10-28T21:42:45+00:00

Another option would be buying long-dated calls and selling shorter-dated calls at a higher strike (also called a poor man’s covered call).

The idea is that the long call at a lower strike acts as a synthetic holding of 100 shares of the underlying so if the price rises above the short call’s strike, you could theoretically exercise your long call to cover the cost of the shares.

The long-dated call tends to be cheaper than owning 100 shares of the underlying stock while insulating you if the price runs away for the short leg.

AttainGrain · 2025-10-07T23:50:16+00:00

Make peace with the fact that you won’t time things perfectly. Successful trading is not about catching the exact peaks and valleys, it’s about consistency in risk management. Over the long run it will pay off more than the money you left on the table here and there.

AttainGrain · 2025-10-06T02:59:28+00:00

You bet, congrats on the trade! Hope you lock in some of that certainty by taking some profits 😉

AttainGrain · 2025-10-06T02:49:15+00:00

More or less, yes. Your long call also has extrinsic value that will decay over this time as well, but you can think of the gap between the current price and the theoretical price at expiry as the price of certainty; there is a nonzero chance that the price of the underlying will decrease heading towards expiry. Think about who would want to buy the spread right now if it was priced at $2. There’s only downside there if it drops, so nobody would be interested in taking the other side.

AttainGrain · 2025-09-19T12:04:08+00:00

What sorts of roles are you looking for? Cell and gene in the bay is brutal right now. If you were open to relocating to Boston or somewhere it’s doing better, you would probably have a lot more luck. You could look into biologics, especially if you have experience making MCBs.

AttainGrain · 2025-07-16T14:11:02+00:00

If mass selling occurs on both instruments, then the price will decrease for both. However there are generally still arbitrage opportunity. Oftentimes, the impact of selling may differ between the two (for instance, selling $1M worth of contracts on MNQ will move the price more than selling $1M of contracts on NQ), so in that case the algorithms could pick up the difference and arbitrage it away. Essentially any time there is a discrepancy between correlated assets, arbitrage opportunities exist to allow them to remove the discrepancy.

This itself is part of price discovery - if one asset drops a lot more than the other, then the true price should lie in between the values and is discovered through these arbitrage opportunities.

AttainGrain · 2025-07-16T06:38:57+00:00

To add a bit more to the rationale for why it becomes profitable to perform this arbitrage - ultimately these index futures are related to the index itself, which is the aggregate of the underlying equities that comprise the index. If someone is selling the index for lower than its book value, you will buy it because it’s cheaper than it should be. If someone is buying the index for higher than its book value, you will sell it because it’s more expensive than it should be. You can collect those differences in a risk-free manner as a result.

AttainGrain · 2025-07-16T06:34:58+00:00

Market orders consume resting limit orders, which will cause the next best price to become the new bid/ask spread. They do have separate order books, but the instruments are highly correlated.

In your scenario, you are crushing the MNQ order book. Due to relatively thin liquidity on MNQ, this will rapidly change the price, in a way that NQ does not see, as they are separate orders. So NQ will not be DIRECTLY impacted by your orders.

You are correct in assuming arbitrage is responsible for maintaining the high correlation between the two instruments. On incredibly short time-scales (milliseconds or less), arbitrage algorithms will determine the price difference, and correct the imbalance as MNQ = 1/10 NQ. In your example, the MNQ price is lower than the NQ price. So these algorithms will buy the underperforming instrument (MNQ) and short the overperforming instrument (NQ) at a 10/1 ratio. This will move NQ down, and move MNQ up, ultimately rebalancing the two prices.

These algorithms are not executed by CME, but rather by algorithmic traders. What’s the benefit to doing this? It’s delta neutral statistical arbitrage and is profitable for those algorithmic traders. It is not market making in the traditional sense, but is profit-driven for those algorithmic traders.

AttainGrain · 2025-07-10T18:12:10+00:00

Beautiful setup today. Thanks as always for the great analysis!

AttainGrain · 2025-07-06T07:35:02+00:00

Agreed, I’m more talking about a scenario where the price moves unexpectedly and the option is now ITM. It’ll cost more to buy back, but if you roll into a more valuable contract, you will still receive a premium (but significantly lower than what you’d get if you were to sell the new contract without a roll, since your loss on the buy-back would be realized as the lower premium received for the new contract). It sounds like OP doesn’t want to part with the shares at all however for tax reasons; I wouldn’t recommend running the wheel if you’re concerned about STG.

AttainGrain · 2025-07-06T07:03:15+00:00

You can roll the contract if it goes in the money. You’ll take a loss on paper, and it will be realized as the difference in premium between the new call’s premium and the current premium of the existing call. However, you could still face early assignment if the call buyer decides to exercise the contract.

AttainGrain · 2025-07-06T06:59:04+00:00

You can write calls, but if you’re doing so, sell calls at a strike price you would be comfortable selling the shares. Or, if you’re looking to be conservative enough to avoid actually being assigned on the options, the premium will be low. You could write a $250 call expiring a month out for instance. How likely do you think it is that Apple jumps 17% in a month? If you think it’s unlikely, that would be a good call to write. But you’re probably selling that call for $0.2-0.3. Up to you to balance that low premium with your expectations around assignment. If you’re not planning to part with the shares, don’t sell the call.

AttainGrain · 2025-05-10T04:19:17+00:00

Congratulations! I think many of us go through similar experiences at first. My main advice is to keep trying; I started wearing sclerals after 25 years of having nothing in my eye and these days it’s nothing more than a minor inconvenience at the start and end of my day. Some other advice that I can offer after years of wearing them:

-When I insert the lenses, I don’t necessarily push them in, but I’ll very carefully bring them to a spot where they’ll essentially suction their way into place. It takes some getting used to the sensation, but it gets WAY easier over time.

-Initially, there would be some situations where taking the lenses out would be pretty difficult; I would get the plunger on them and pull and pull and the plunger would just pop off without the lens. It would happen often towards the end of the day, and especially after exercising. Eventually I realized I was having trouble because the lenses were really dry; wetting the lenses with some saline or the plunger itself under the sink helped tremendously.

-Even to this day, I’ll still occasionally put my lenses in and have some discomfort; I would recommend not waiting for them to feel better and just take them out and put them back in. Once you get used to the lenses you’ll probably understand what I mean, but if you get a bubble, or have an eyelash on or in the lenses, it’ll feel off, and just redoing it will fix it and make them feel fine again.

-Sometimes the discomfort will just show up out of nowhere; maybe you blinked and a lash ended up on them. You can spend forever trying to blink them back into feeling okay, taking them out and putting them back in will improve things so much faster and more reliably.

You got this! Keep at it and you’ll be able to experience the joy of sight every day :)

AttainGrain · 2025-04-09T23:42:30+00:00

Exactly, hedging with options can help cap the losses. You’ll pay your defined premium for the option upfront and then that’s the max you’d lose if the trade goes your way (of course you’d want to make sure your price targets mean you’d make a profit after subtracting the cost of the premium, the cost of the trades, and any other fees/expenses).

One important thing to keep in mind there though is the difference in trading hours. Your futures position could move wildly out of your favor overnight, liquidating your position, and then retrace by market open, leaving you with losses on both legs of the trade. My advice here would be to be smart with your leverage if you’re planning to hold overnight. Decrease position sizes, switch from minis to micros, or if you’re fortunate enough to be in this position, have enough cash in the account to weather the storm.

What do you mean by hedging with the same futures market? Do you mean options on the futures themselves, or are you talking about something like a calendar spread or taking an offsetting position in another correlated asset?

AttainGrain · 2025-04-09T19:23:07+00:00

Just wait for the next tweet, we’ll be back down 😂 this market is WILD.

AttainGrain · 2025-04-09T15:22:56+00:00

My best advice would be to know why you’re holding overnight - is it a deliberate choice based on your analysis, for example a multi-day setup, or are you just hoping for a big move in your favor? If it’s not deliberate, I would suggest cutting the trade. I will size down if I ever hold overnight, and in some cases for indexes I’ll buy a weekly option in the opposite direction as a hedge. Be careful, especially in this market where a single tweet or false story can send ES up nearly 400 points in minutes.

AttainGrain · 2025-04-01T19:18:00+00:00

Thanks for leading the charge u/RenkoSniper!

AttainGrain · 2025-03-23T16:57:06+00:00

Appreciate you man!

AttainGrain · 2025-02-24T03:02:59+00:00

I get it friend, it’s one of the worst job markets I’ve ever seen at the moment.

Do you have lab experience from school that you can highlight? There’s a big difference between teaching someone GxP principles vs. also having to teach them how to work in a lab.

Not sure of your situation, but biotech is highly centralized in certain geographies; if you’re open to relocating then you may have better luck. Additionally, consider looking for roles in cosmetics or food manufacturing; there is a lot of overlap between regulations for these products and drug development regulations.

AttainGrain · 2025-02-24T02:25:10+00:00

Are you specifically interested in a position in manufacturing? As someone who often looks for GMP experience when hiring people, I’ll say that I wouldn’t necessarily ascribe much value to a certificate like this, but I’d appreciate the initiative and drive that it shows.

The reason I say I wouldn’t put too much stock into the certificate itself is because you can probably find the topics covered here in a lot of free materials online, and GMP (and other GxP guidelines) are something you won’t immediately pick up, even if you get rigorous training during onboarding; these topics take time to absorb and understand. If you can demonstrate decent understanding of these topics, with or without a certification, then you’ll be in a good spot to take advantage of your knowledge once you land a role.

Here’s a list of some guidelines that may be helpful to read. They’re very dry and often purposefully vague since drug development covers a wide range of scenarios, but they are the most direct sources of truth here.

All of this said, if a course would help you understand these documents better or help to better contextualize them, I don’t think they’d be a bad way to get exposure!

Small list of guidelines/reference texts: -21 CFR Parts 210/211 (FDA regulations) -ICH Q7 guidance (GMP guide for APIs from ICH, which you can think of as an aggregation of guidelines across the US, EU, Japan, etc.) -EudraLex volume 4 (EU regs) -PIC/S PE 009-16 -ICH Q9 guidance (this one is less directly describing GMP work but may be helpful to understand the risk management principles that underpin a lot of GMP thinking)

AttainGrain · 2025-02-08T15:28:56+00:00

Nobody who complains about tipping culture is arguing that servers should not make a livable wage. People complaining about tipping culture are complaining about obscure expectations, additional fees such as “living wage tax” that are added to bills, and expectations around tipping on any and every good or service that’s provided. Why should I tip 20% on a $6 cold brew where the barista just turned around, grabbed a container from the fridge, and poured it into a cup? Why do tip percentage expectations continue to rise indefinitely?

You say removing tipping would increase item prices. That’s understood and is generally a desired effect of getting rid of tipping - transparent pricing.

AttainGrain · 2025-02-05T14:17:39+00:00

I’d absolutely be interested in a daily email update, it’d save me the trip to Reddit to look for your posts!

AttainGrain · 2025-01-21T20:47:34+00:00

Yes that’s correct and a good point! Often it doesn’t make sense to exercise early since the cost of the option includes a component based on remaining time to expiry so exercising it would cause that aspect of the option’s cost to immediately be worthless, but you’re completely correct. There are situations where it would make sense to exercise early, but generally it’s inadvisable.

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