To The Moon

1. Last week, my four options trading review (January 12-16, 2026)

Hello tigers, last week I executed a total of 4 options trades, 3 transactions are locked in profits, and 1 transaction continues to be observed.

Overall to short Chinese concept stocks are the main line, the core is still Short cycle, vertical spread, high winning rate structure, but due to Alibaba's violent fluctuations, higher requirements have been put forward for trading experience and risk control cognition.

1. Short $Alibaba(BABA)$

• Strategy: Sell $165-170 Call Spread

• Due Date: 20260116

• Breakeven point: approximately $166-167

• Result: Intraday earnings hit Friday

• Features: Low margin, but extreme fluctuations in the middle, causing strong psychological impact

2. Short Baidu (BIDU)

• Strategy: Short Sell 155-165 CALL spread on rebound

• Due Date: 20260123

• Result: As of Monday's pre-market, the target fell back to $149.Profit basically locked in

• Nature: Standard, smoothly cashed short-selling transactions in China

3. Short $Direxion Daily FTSE China Bull 3X Shares(YINN)$

• Strategy: SELL YINN 50 CALL

• Due Date: 20260123

• Results: YINN closed at $45.33 on Friday,Currently profitable

• Strategic nature: Zhonggai short-selling structure similar to Ali and Baidu

• Features: Fluctuations are relatively controllable, and emotional attention is much lower than that of Ali

4. Long $Apple(AAPL)$

• Strategy: Bullish Sell250-260 PUT spread after pulling back to key support levels

• Due Date: 20260123

• Logic: Technology stocks have sufficient correction, and there is technical support in the short term

• Result: AAPL closed at $255 on Friday, and the strategy continues to be observed

2. Trading Review--the core cognition and processing principles of Alibaba transactions

Original strategy: Short Alibaba (BABA)----Sell 1 lot $165-170 Call Spread

(1) This is an "unexpected market", but it is not the first time I have encountered it

• After opening the position this time, it encountered a single-day increase of more than 10% in $BABA on Monday;

• Similar situations in2025/9/30Had happened;

• Last time:

  • Expectations: earn 100 or lose 200;

  • Actual: After taking over, the profit is enlarged toMore than $10,000；

• Conclusion:The tail risk of options may not only destroy accounts, but also amplify opportunities.

(2) What to do when losing money? No standard answer

• The key is not "how others do it", but:Why did you make this deal?

• Different treatments depend on:

  • Whether to be bearish on Ali for a long time;

  • Whether it has the ability to take over 100 shares of Alibaba (N lots * 100 shares)

  • In terms of risk control, consider whether the position is small enough, does not affect the overall account;

• The author's own practice:

• If the option is exercised, the direct acquisition will be converted into a short position;

• Suggestions for tiger friends: The position is extremely small, accounting for < 20% of the total account.

(3) Risk of unliquidated positions at maturity

• Due unprocessed:

  • May be exercised directly, and the account appears100 shares of Alibaba；

• Whether you can hold it depends on:

  • Can the account withstand approximately$17,000Occupancy;

• Principle: Unable to take orders → must close positions in advance。

(4) The trade-off between moving positions vs. taking orders

1. Transverse warehouse shift

• Maintain the exercise price and postpone the expiration date;

• The maximum profit is usually compressed;

2. Short-term takeover

• Suitable for those with large accounts, small positions, and clear long-term logic;

• Can be exchanged for more room for reversal;

• Premise:Option position ≤ 20% of the total account.

(5) Unified liquidation discipline recommended by traders (very important)

• Spread strategy:Profit ≥ 70% → Close the position directly

• Not recommendedDelay the last 20% premium until expiration;

• Reason:Low return for high risk is a typical long-term negative expectation behavior.

(6) The life and death line of position management

• Take Ali spread as an example:

  • Surface Margin: Approximately $500;

  • Actual worst-case scenario: 100 shares ≈ 17,000 US dollars;

• Core principle: If there are no corresponding funds for 100 shares in the account, do not make the underlying price difference；

• The difference lies in:

  • People with insufficient funds → liquidation;

  • Well-funded people → turn risks into opportunities.

(7) When doing options, what does it mean to "don't lose money"

• Not every stroke is precise; Instead:No permanent losses will occur；

• Practice:

  • Make the entry judgment as reasonable as possible;

  • Positions always reserve room for errors;

• Alibaba's extreme situation:For those who are well prepared are opportunities; To the ill-prepared is destruction.

Disclaimer, the above content is only for my personal trading of review, and the contract strategy is not used as direct investment advice.