The Final List (of the dated Monday's week)

Lessons from the Iran drawdown

I don't think there is much of a way I could have sidestepped the Iran war drawdown. In retrospect basically every ticker moved down or sideways for about a month following the first bombings. Energy did trend upward first and I piled heavy into energy stocks after/during the correction since those were the only tickers passing my technical performance filters, however my losses for the post war period were about 15–20% from the portfolio high. So that wasn't an insurance/counterbalance strategy as much as it may have been just a method of treading water.

For this reason I think my protection strategy going forward — in addition to small position sizes — is to carry SPY puts of staggered long term expiration and strike prices to act as insurance when a drawdown comes. I had previously carried SPY puts at catastrophe insurance strikes, which amounted to only about a 1% portfolio profit during their highest value. That's nice, but not the protection payout desired on what still amounted to a 15–20% loss. I think tighter strikes are the answer here. I have also previously carried GDX puts when my gold sector allocation was heavy, and I do still hold these since GDX has been slipping, but I think I will only buy sector specific puts if my portfolio is disproportionally heavy in that sector. Managing puts is an extra thing to do, and SPY should protect against most down draws — carrying the sector specific insurance is the play when the portfolio is lopsided.

Things seem to be back to normal now. My main lesson from recent events is to not pay attention to the news, view Reddit as only entertainment, and overall not take in outside opinions. Just trade signals in a vacuum.

The case for LEAPS over shares

The core idea is time insurance. The strategy here targets the longest-dated LEAPS available, at least roughly two years out — nothing with fewer than 600 days to expiration. That's not arbitrary. It buys a genuine runway, not just a few months of wiggle room. The theta decay that kills most options traders doesn't get loud until inside 60 days. At 600+ DTE that clock is mostly irrelevant.

Position sizing is simple: roughly 2% of total account value per ticker, built around one contract per name. In practice some cheaper tickers come in under that and some run a bit over, but the anchor is one contract and ~2%. That tends to produce a portfolio of anywhere from 20 to 70 tickers depending on where setups appear. Broad enough to not get wrecked by any one name, concentrated enough to actually move the needle when something works.

The tradeoff is that you can be right about a stock and still lose if your timing is off by a year. That's the game — picking the direction and the timeframe. The long duration is what makes it survivable.

Separating "thesis broken" from "market noise"

One of the harder parts of options is knowing when to exit. A stop-loss based purely on price percentage is a bad fit for LEAPS — the premium can swing 30% on a down day that has nothing to do with the company. The better question is: has the reason for the trade changed? If not and the market is just having a rough week, sit tight. If the answer is yes — management changed, the sector is structurally impaired, the macro regime has shifted against the thesis — close it regardless of where the price is.

First post — what this site is

This replaces the Monday-morning group text. The watchlist file gets posted here weekly, along with occasional notes when there's something worth writing up. None of this is advice — just one person's options account in the open. Trade your own book.