(INTERVIEW) Tom’s Incredible Trading Journey - 8 Months in…

The folks in our Web 3.0 NFT program just saw a 12X+ gain. Indeed, such a return in such a short amount of time is remarkable. 

Do we see it in other markets? 

Here's a current example of the 140 put / 162 call ZB June option, with a 2x bias on the put side upon entry:

Thus far, the call is worthless, but the puts have grown 10X. 

There are still 31 days on the options. How do I start realizing these unrealized profits?

My preference is to sell OTM options in the shortest-dated series. For example, this week I used the options expiring this Friday. Once the 2x 140 June puts went ITM, I started “covering” by selling 139 strike put options. When I do this, I normally look to get around 1k for 1 option. In this case, I only want to start covering risk for 1 of the 140 puts, thus I only sell 1 of these short-dated 139 or 138 strike put options. Getting this kind of premium for an OTM option with 3 days left is only possible with a high IV.

If the position expires ITM, I keep the 1k of premium and get a long future assigned at the strike of the option (long futures @ 139). Plus the premium collected. This trade would start to make money regardless of direction – a sweet setup to be in. 2x ITM puts, with 1 covered by a long future 1 strike under from the sold option. 

Another outcome that would be desirable is if the sold option expires OTM. I'd get to do it all over again the following week and still have the full 2x put delta exposure. 

Volatility Visualizer Tool comes in quite handy during these times for getting creative while managing such a position. It has both intrinsic and extrinsic profits, and time is ticking…30 days left. 

Bonds continue to outperform their weekly and monthly implied volatility.

This trade was shared with members of the Masters in Trading Futures program.  Every Friday we hold a Friday Breakdown session where we review active trades for the week and is available to answer any community questions.