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HUT Call Diagonal Option Trade Management

I've posted a few times about a trade I have on in HUT, details below. To update from the last:

  • I've completed scaling in to my max allocation ($15K total, 35 lot at an agg basis of $4.27)

  • I maintain my longer-term bullish disposition and continue to structure the trade to maintain upside potential

  • This trade falls into my speculative allocation and I'm okay losing the entire investment (although I'd prefer to make money). This is an important note, because I'd handle this trade far different if it were in my core allocation (although this product won't be in my core allocation any time soon).

Current trade R:R Profile, notice how there is no upside risk in the trade.

Today (26Jan) I added (20) 18Mar 9C @ 0.33 for a total of $660 or 4.4% ROIC. I'm using these premiums to continue realizing gain (thus reducing my unrealized net loss) while ensuring the trade has plenty of room to run if it catches a bid.

Again, this is one of the neat part of options. We have flexibility to improve our position even when things don't go our way - in my case, I've enjoyed a -48% decline (See chart below, I entered on 2Dec - the highlighted candle when HUT was ~$11). Even in this trade, despite being completely wrong directionally, I've been able to realize a profit while the LEAPS are at an unrealized loss. Additionally, even if the trade doesn't go my way, I'll be able to reduce the impact to the invested principal.

Again, this is a highly speculative trade (closely tied to bitcoin). Throwing good money after bad is generally a losing prospect. I'm playing with fire however, again, this is a speculative trade - I'm okay with the risk.

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