To The Moon

$Rocket Lab USA, Inc.(RKLB)$ so everyone. If you have followed me for a while you know im in unconditional love with rocket lab. But i have done the unthinkable. I sold half my position but i did two other things.

First though, why did i sell half my position. Well since January its been extremely volatile, highs above $32, lows in the $15 range. Because it represents way over 50% of my portfolio, well im getting emails on a daily basis telling Me a margin call is impending. Got as low as 4% liquidity! Nuts!!!

So i halved my position to remove all margin. I sold out at around $20. Yep it was over $32 at one point so i realized a sad profit, but dont feel sorry just yet. My average buy price was $4.32, so i realized over $12,000. Could have been $24,000 if  i sold at the 2024 high, but 2025 requires cunning. its no longer a year where anything you touch rewards. Its a year of extreme volatility on a daily basis.

So what did i do next? Well I brought some rklb calls. So i can buy back what i sold 2 years from now for less than i sold them. Today i also sold 2 very long puts, strike price of $15, but my premium was $4.95. So someone could excise me and ill have to pay $3000 for 200 shares, but with the $1,000 i got paid today, they will only cost me $10 per share. Happy to pay that     . 

The thing about long puts, well i also have long puts at $22 strike. They have not been called up, because if you are selling a put long, you are the insurance salesman. They buy the long puts to insure long term, so even though rklb was in the $15's, well they paid me a premium to keep the insurance alive. So the incentive to excise in the short term is not there. because they are covering long term. Heck rocket lab is rocket science, a bad day at the office means no office.

If this all sounds confusing, well it is. Its actually a mental mind fak. It also impacts on your funds available to invest, margin, and buying power... very very complex. biggest issue when you sell a put is you are -1 and an increase in the price is a loss for you. It really is very difficult for the human brain to figure it out. and it gets even more complicated I normally don't do puts because while they increase Your "cash" on hand, they also reduce your buying power, because of the potential to be excised. 

Buying a call is way simpler. Its like putting a deposit down on a stock you want to buy now because you believe in two years from now, it will be worth way more . but you don't have the funds to buy it now, so you buy the right but not the obligation to buy it at a future date, at a predetermined price.

Anyways, probably confused more than i have explained. very interested in your thoughts, because this post is only going to people that follow me. Am i confusing you? Or am i oversimplifying things sooo much that im actually unintentionally misleading?