A quick piece of advice for anyone caring to listen (a 🧵):
ALWAYS have reserves. Seems obvious but I’ve learned the hard way that being undercapitalized is the straw that breaks the camels back… usually right before the relief rally or trend break.
ALWAYS have reserves. Seems obvious but I’ve learned the hard way that being undercapitalized is the straw that breaks the camels back… usually right before the relief rally or trend break.
I’m very bullish on growth, specifically in certain #SPACs. I’m playing commons, options, and warrants. I have been accumulating the dip in several names over the last few days. How? I’ve been almost 100% warrants recently?
It’s simple… margin. I have portfolio margin with @TDAmeritrade which allows 6:1 leverage. USING 6:1 leverage is VERY reckless!! But since warrants are not marginable, I convert from winning warrants to suffering commons as I nibble dips. It’s good psychology, too. Sell⬆️ buy⬇️
My warrant positions have helped me have leverage without using any margin. Now that many names are opening weekly options expirations and de-SPACing, I am starting to diversify away from pure warrants. That brings me to another point…
Diversification is NOT just for the lazy. If done right, it’s for the diligent as well. If you use margin, you MUST diversify. Diversification gives you flexibility and partially insulates you from unexpected events. It’s one way to be committed to your thesis but keep reserves.
He/she who has reserves reaps the benefits when opportunity knocks. Always play through bullish AND bearish scenarios and have a plan. If using margin, this is 10x more crucial. Know what you own. Know your exposure. Look at the big picture outside the market. Best of luck to all
• • •
Missing some Tweet in this thread? You can try to
force a refresh
