r/options • u/thetacollector • 2d ago

Bagholding SPY..

Bagholding some SPY with a $563 cost basis.. can't really sell calls unless I go below my cost basis or extremely far out time wise..

Pretty sure that it's not gonna rebound to my cost basis any time soon..

Wondering if any of you are in similar spot and what your plan is?

23 Upvotes

90% Upvoted

52 comments sorted by

42

u/Constant-Dot5760 2d ago

Welcome, new investor!

You can't lose unless you sell below your basis.

23

u/Electricengineer 2d ago

Market always rebounds just how long until it does.

14

u/OppressorOppressed 2d ago

only because the US was #1 benefactor of international trade for many decades. With these tariffs, this may no longer be the case. This time might actually be different.

2

u/[deleted] 1d ago

[deleted]

-1

u/AustinFlosstin 1d ago

Karma will come to u 🇺🇸

8

u/Christopher_Ramirez_ 2d ago

Don’t be afraid to get called away, especially on a taxable account. Losses can be used to offset capital gains on your taxes, and you can even deduct up to $3k a year of capital losses from your taxable income. Excess losses carry over as well. Just wait 31 days to buy again, to steer clear of the wash sale rule.

15

u/santropy 2d ago

Just wait for a few more sell offs, a recession and a new president. It will eventually come back.

5

u/No-Anteater5184 2d ago

I just spat my coffee hahahaha

4

u/Minimum_Passing_Slut 2d ago

$575 gang.

My hedge spreads and short calls brought my basis down to $540. Still ouch time.

4

u/thetacollector 2d ago

You sold calls? Did you need to go far out time wise for a premium and strike you were happy with?

4

u/Minimum_Passing_Slut 2d ago

I first sold at $580 to finance my downside hedge of 2 deep OTM butterflies. Then after it started heading down I BTC them and sold a few more at $565. Then liberation day came…

3

u/Saltlife_Junkie 2d ago

Dude just don’t panic. These are actual buys. No time limit. I would actually average down. In 15 years you will thank me.

2

u/ApolloMac 2d ago

Sell calls when it gets near the daily moving averages. 9 or 21 periods. They will act as resistance. Or find other strong resistance levels. Chances are it doesn't pop above the moving averages or other levels for a while.

Not entirely risk free but add some TA into your theta strategy and you can make some extra money to offset the losses.

1

u/Hot-You-7366 2d ago

tasty trade stomped me out of 700 put contracts at 3;46, i put the trade on at 3:36 same day. I lost $5k, The puts ended the day worth $93k. I email them 5 times to reverse the sell 10 minutes before market close and way before AH close.

What is my recourse!

3

u/papakong88 2d ago

If your put has the possibility of expiring in the money on expiration day, your broker can liquidate your options under these conditions:

If you are short, your account can not meet the assignment of the puts.

If you are long, you do not have a “Do not Exercise” instruction attached to your position.

1

u/Hot-You-7366 2d ago

I was long 0dte put. so they have a "I am monitoring" contract they want you to email them by 3pm. I didnt do the trade until 3:36pm, they stomped me out at 3:46pm, i was emailing them to reverse the sell at 3:48pm multiple times.

I had two trades i put on at the same time one for 505s and one for 510s. They let the 510s ride even though it was ITM, i sold that one before close. They stomped me out of the 505s because i had more contracts. Both were $5M+ notional

edit to 3:48

1

u/papakong88 2d ago

May be you can argue that they did not give you a reasonable amount of time to send a "I am monitoring" email because the puts were opened after 3 pm.

1

u/Hot-You-7366 1d ago

thanks, thats my guess to. Ive been looking through FINRA and brokers cannot sell or exercise puts against your will. In essence they sold them not because I didnt have 70,000 shares of SPY but because they are a crappy broker and didnt want to be on the hook to find a buyer themselves

3

u/SpaceballsTheCritic 2d ago

Don’t use trash stock apps.

1

u/J82nd 2d ago

$608.23 average cost and I bought a shit ton near the peak.

Came in too late trying to get the 20% year after year returns from the last two years.

Will just bag hold, maybe sell some call Options way out of the money.

1

u/hide_in-plain_sight 2d ago

Put debit spreads. I feel a little safer this way.

1

u/MyCupO 2d ago

No margins and just wait … it will be $1000 someday just not sure we live long enough to see

1

u/thetacollector 1d ago

?

2

u/MyCupO 1d ago

I mean if you wait long enough it will come back. I guarantee it will exceed your cost by Jan 2027.

1

u/meteoraln 1d ago

It'll all be better in 4 years.

1

u/Mobile-Gas-8871 1d ago

same boat, 100 shares with 521 cost basis

1

u/thetacollector 1d ago

I wish mine was 521

1

u/Mobile-Gas-8871 1d ago

i am still 2k in the hole already

1

u/thetacollector 1d ago

Better then 6k

1

u/Mobile-Gas-8871 1d ago

well i am also 436 cost on qqq 100 shares so we about even

1

u/thetacollector 1d ago

That's not bad either

1

u/Mobile-Gas-8871 1d ago

decided to go with prices i would feel better about owning. I knew we would drop, no idea it would be this bad. But i am 90$ off ath so just gotta hold

1

u/GMEtheloot 1d ago

It was 572 right before close on Wednesday.

Sometimes the Hulk dick pattern forms.

1

u/Wizzopmayne 1d ago

Don’t worry it will eventually just expand your time horizon , literally, mentally , whatverr, it is what it is

1

u/alchemist615 2d ago

It'll come back

1

u/thetacollector 2d ago

I do know this.. the question is just when and how bad does it get before hand haha

1

u/alchemist615 2d ago

That's fair. If you can get it right though.... 🤑🤑🤑🤑

0

u/papakong88 2d ago

Your cost basis has no relevance in selling covered calls.

The only relevant factor is the rate of return.

5

u/thetacollector 2d ago

But if you sell calls where the (strike + premium = less then your cost basis) and you get assigned.. then your rate of return is a loss..

2

u/Bruce_Wayne_Wannabe 2d ago

Also, just roll the calls up and out, you can do that forever. Won't go up forever, and at some point, if it gets assigned, you should be very happy if you've kept rolling up and out for some time.

1

u/Aprice40 2d ago

I just rolled a call twice in March and each time it ate some of my profit. Doesn't that mean eventually rolling will result in a loss?

3

u/dip-the-buy 1d ago

That's because you rolled it wrong.

1

u/thetacollector 2d ago

Doesn't rolling coverd call upwards just also result in immediate loss also

2

u/dip-the-buy 1d ago

Ah, so you wanted to play options and never lose? You can't do that even with stocks, and with options, you must lose regularly.

0

u/papakong88 2d ago

The rate of return should be based on the stock price at the time of sale of the call.

-3

u/Christopher_Ramirez_ 2d ago

Realizing losses would be a good move for OP if holding in a taxable account. They can simply repurchase in 31 days to avoid wash sale rules, and in the meantime get deductible capital losses that can be carried over if not used up.

1

u/nevergonnastawp 2d ago

....no its definitely a factor

-2

u/papakong88 2d ago

Show me that it is a factor.

0

u/Proterd 2d ago

Or you could continue to sell covered calls and let your shares be called away, then transitioning to selling cash-secured puts

1

u/thetacollector 2d ago

Very true, I may do this and just accept the incurred loss if they get called away..

I've done this in the past and got assigned under cost basis and I thought about it.. it was a cut and dry loss

0

u/DennyDalton 1d ago

You have several choices:

'Buy and Hope' for a recovery. Might be a long or a short wait.

Sell OTM covered calls, whittling down your break-even price. This could take a bit of time because OTM premiums near your break even price are low.

Sell a far dated put - not ideal

Sell a lower strike, locking in a loss, hoping that the stock doesn't gap past your short strike.

If you're not terribly down and you're willing to play for break-even or better, a Repair Strategy will get you out at a lower price. It involves buying a 1x2 ratio spread (buy one call at a lower strike and sell 2 calls at a higher strike). The end result is a bull call spread and a covered call per 100 shares owned. A June $510/$535 repair would get net you about $562 if SPY is above $535 at expiration.

-2

u/AlwaysTrading1 1d ago

I never bag hold anymore. My greatest losses in the market were from holding.

But dont be hard on yourself. We live and we learn. It is hard to be right every time. Ive joined 100s of trading groups, only one person i follow is right every day. I eventually stopped following everyone else. But finding someone who's trades are green every day, is super rare. It's like finding a needle in a haystack.

But this group actually cares about people. They tell all their members to start with only $100 in their account, then they teach them how to grind their way up. They give one trade every morning, then they help you on that specific trade. It's nothing like I've ever seen before. It's free too. Crazy.

Who would have known that there was even good people out there anymore?

But yeah, I started 60 days ago with my $100 bucks, and now I am at $2,000 just taking their one trade a day. They don't push for the big trades, they don't bag hold anything, just small but consistent, wins.

Just remember, if you lose big on this one, keep your head up.

My stock market FOMO was draining my life and my marriage... now i only follow this one person, and i try to close my computer down after that trade.

It is hard, but now i am finally starting to see the light in my trading journey.

So just keep pushing forward, and let me know if you have any questions, I can always try to help answer them. It helps to talk to other like minded traders. Take care.