About options and leverage
Leverage
A widely circulated commandment in the market is not to use leverage or margin financing.
I strongly agree with the stance on margin—never borrow money to invest or speculate. You have no control over margin financing, and to win a great expedition, you absolutely cannot let such people mix into your team. What you need is a team that follows orders and is united in purpose; those who might split and divide the baggage at any moment are unreliable.
What about leverage?
Leverage merely amplifies volatility. You could lose three times as much, but you could also profit three times as much—that’s fair. Like a divine weapon, wielded properly, it can achieve twice the result with half the effort, but overestimating your strength will only harm you. The question is, do you have enough inner strength to wield it now? Look at your win rate and odds—don’t lie to yourself.
Options
I usually only hold options with more than 150 days to expiry, but often I sell them after just a month or two—I don’t need that much time to achieve my goal. So why hold for so long?
I’m a speculator, focusing on opportunities over months. I only trade with the trend. From the moment I enter, the broader cycle direction must align with my trade. I take a week to build my position, only adding on momentum, so by the end of the week, my book should be profitable (if not, I won’t add more) or slightly underwater (due to post-entry fluctuations).
I decide whether to speculate based on various factors (market trends, economic cycles, sentiment cycles, fundamentals, technicals, etc.).
Even after deciding to speculate, the future remains uncertain. The extra hundred-plus days are to give the market enough time to fluctuate until it reaches where I expect it to go.
If the market moves to the expected level quickly, I can plan my exit once the goal is achieved.
Advance and Retreat
I prefer going all out. To me, this market is like a battlefield. Since black swans are inevitable, why not build strength and grow stronger before they arrive? If I let uncertainty bind me, how can I achieve those grand ambitions?
To avoid misleading, I’ll be clear: I dare to floor the accelerator because I have a matching braking system—I can stop instantly (clear positions and halt volatility) under any circumstances.
The market is like a noisy classroom, students chattering nonstop, then suddenly, all sound stops, everyone freezes, silently observing what happened, before the noise resumes. When the market shows such anomalies, stay alert. Maybe nothing happens a few times, but eventually, the teacher will be standing right behind you.
Everything could be an illusion—only the gains and losses in your account are real. When the market doesn’t unfold as I expect, it must all stop.
$Cleveland Cliffs(CLF.US) $Alphabet(GOOGL.US)
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