Today we held our Breakout Multiplier Weekly Strategy Session. If you’re not a member, click here to join us.
We do this every Thursday at 11 a.m. ET for Breakout Multiplier members, where we discuss new trades ideas, open positions and answer questions from the chat.
One of the key benefits of buying cheap call options on low-priced stocks is the flexibility they provide when managing and scaling out of positions. This becomes especially valuable when we hit a big winner.
Trades like this highlight the importance of having a clear, disciplined profit-management strategy.
With a low initial cost per contract — such as $30 — we can comfortably purchase 20, 50, or even hundreds of contracts.
*The amount of contracts you buy should be based on your targeted standard position size. For example, if you are position sizing around $1,000 per position, you would buy about 33 contracts at $30 for an initial cost basis of $990.
Owning so many contracts allows us to systematically take profits as the trade develops, striking a balance between letting winners run and locking in gains.
Gradually "feeding the ducks" on winners is a great regret minimization habit, too. If we are selling the double, selling a little more at 5x, again at 10x, etc., we aren’t anchored to a single sales price.
I’m still holding about 1/6th of my initial position in SOUN after selling more today. I think we could be making new all-time highs by the time our calls expire in mid-January.
And if it doesn’t work out that way, oh well… This will still be one of my best trades of the year. I’m happy no matter what happens next. I like that.
