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SUMMARY
TJ 'The Wheel Deal' provides a comprehensive update on his options-selling portfolio, highlighting the turnaround in Micron's year-to-date performance and detailing his transparent approach to trading. The discussion covers position management, risk mitigation strategies, and the importance of conviction and emotional discipline in options trading.
MAIN POINTS
- Micron's year-to-date performance flips from a $2 million loss to a $57,000 gain, significantly boosting the overall portfolio.
- A covered call and naked call ladder strategy is explained for SpaceX, emphasizing roll optionality and managing drawdowns.
- A new long position in Riot is established, with a plan to scale up to 100,000 shares using staged buy orders at lower prices.
- Enphase and Micron positions are reviewed, with covered calls and goalpost trades used to manage risk and generate premium.
- MSTR and BMNR remain the largest portfolio drawdowns, but call ladders and backstop trades are used to hedge and potentially recover losses.
- A new position in CleanSpark is initiated, making it a core holding and demonstrating the preference for owning shares over selling puts.
- The rationale for starting with share ownership instead of selling puts is discussed, focusing on reducing assignment anxiety and emotional volatility.
- A live walkthrough of the portfolio's AI-generated performance deck is provided, highlighting the importance of accurate share counts and premium tracking.
- Call ladder strategies are credited with providing essential downside protection as the portfolio scales up in size and complexity.
- The psychological benefits of share ownership and long-term conviction are contrasted with the risks of lacking an investment thesis.
- The session concludes with a 'One Minute with God' reflection, connecting faith and personal responsibility to investment and life decisions.
DETAILED ANALYSIS
TJ 'The Wheel Deal' begins by emphasizing his commitment to transparency in options trading, noting that he has no products to sell and relies solely on his trading results for credibility. He critiques the lack of transparency in the broader financial community, arguing that true conviction is demonstrated through actual positions rather than commentary. The portfolio review starts with a focus on Micron, which recently turned positive for the year after previously being down nearly $2 million.
This recovery, alongside significant gains in Palantir, has helped propel the portfolio from $7 million to $12 million, with an ambitious target of reaching $20 million by year-end.
The discussion moves to the mechanics of managing large positions, particularly through the use of covered calls and naked call ladders. For SpaceX, TJ explains how he structures covered calls at staggered strike prices and expiration dates, collecting premium while maintaining flexibility to deliver shares or repurchase them as needed. He highlights the importance of being 'roll optional,' meaning that rolling options is now a last resort rather than a default action.
This approach is designed to maximize upside while minimizing downside, creating what he describes as a 'double-sided coin' where the odds are tilted in his favor.
TJ details his recent trades, including a new long position in Riot, where he acquired 20,000 shares at an average price of $19.59. He outlines a plan to scale up to 100,000 shares by placing additional buy orders at lower price points ($18, $12, and $10), treating shares as inventory and seeking to improve margins by lowering the average cost. He also discusses the use of call ladders on Enphase and Micron, where he sells calls at progressively higher strikes to generate premium and manage risk.
For Micron, a goalpost trade is established with puts at $600 and calls at $1,800, aiming to collect $2.5 million if the stock remains within that range.
The portfolio's largest drawdowns are attributed to BMNR and MSTR, with combined unrealized losses of $5–6 million. To mitigate these, TJ employs call ladders and backstop trades, collecting significant premiums that offset some of the losses on the underlying shares. He stresses the importance of having built-in downside protection, especially as the portfolio grows in size and complexity.
The strategy is to manufacture a win over time, even when facing substantial drawdowns, by persistently selling premium and adjusting positions as needed.
A notable shift in the portfolio is the initiation of a core position in CleanSpark, where TJ purchases 10,000 shares outright rather than relying solely on selling puts. He explains that owning shares from the outset reduces the anxiety associated with assignment and aligns with his preference for having direct exposure to companies he believes in. This approach is contrasted with pure premium selling, which he argues can lead to missed upside if the stock appreciates significantly.
Throughout the session, TJ underscores the psychological aspects of trading, advocating for strategies that match one's temperament and conviction. He acknowledges that not everyone is suited to handle large drawdowns or the emotional swings of the market, and encourages viewers to develop their own investment theses and risk management frameworks. The use of AI tools, such as the live performance deck generated by 'Claude,' is highlighted as a means of maintaining accurate records and facilitating detailed analysis of positions, premiums, and risk exposures.
The session concludes with a personal reflection, connecting faith and personal responsibility to both investing and broader life decisions. TJ reads from a devotional, drawing parallels between the unpredictability of life and the need for trust in a higher plan, while also emphasizing the role of individual choice and discipline. This holistic perspective ties together the technical and emotional dimensions of trading, reinforcing the importance of conviction, adaptability, and self-awareness in achieving long-term success.
LINKS
- Referral link to sign up for Tastytrade, the trading platform used by TJ.
- YouTube membership link for TJ The Wheel Deal's channel.
- TJ The Wheel Deal's Twitter (X) profile.
- StreamYard referral link for streaming software with a $10 discount.