Trust me, I believe you. At the time I was so young and enthusiastic. Over the past three months I've matured like you wouldn't believe.
I confess there's a gambling streak running through my bones. I'm working on it. Your posts are of great help.
It was easy to make money in the market in 2013, and it was easy to make money in solar using options, since solar stocks kept going up.
I warned against using options back then, but a lot of people were making money on options so it is easy to get caught up in options instead of stock.
I gave all those warnings, because even though it is easy to make money using options in an up market, you will lose that money 5 times faster in a down market. I (and everyone) knew that a prolong period of weakness would come eventually, hence warned against options. But it is impossible to know when to cash out, so you will eventually end up a big loser using options; unless you are a seasoned pro with a bulletproof strategy that you stick to no matter what.
I really do not recommend playing solar with options. I probably spend more time researching solar than anyone here, have investment banking training and experience, and still cannot even come close to timing options purchases correctly for solar. So I can only imagine what others are going through with a lot less research.
The reasons to stay away from solar options are the same as I mentioned several times:
1. Extremely wide bid/ask spreads.
2. Very low liquidity
3. Exceptionally high IV
That is a recipe for disaster, and that is why I warned many times before not to play options in solar. LEAPS are not safe either.
If you are really hell bent on playing options then do so at your own risk.
I really recommend using stock only when you invest in solar. Choose your stocks wisely and buy and hold. Cash out only when you hit your PT and think that further upside is limited. Do not cash out on weakness, and be ready to hold for 5+ if we hit a recession, because you might lose 70% of your investment. But if you choose the right stock then it will bounce back to previous highs just as fast as any other "safe" stock like Procter & Gamble, who only lost 20% in said hypothetical recession.
Buy and hold...
...or better yet, buy and forget!
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In my 401k last year, I made a 400% return investing almost exclusively in solar; using stock only and no margin. That same portfolio is up 20% YTD, even after the huge beating that solar stocks took recently (I selected the right stocks at the right time and stayed 100% fully invested at virtually all times).
Options are really not necessary to make money in solar. You basically need triple digit returns to make money in solar using options, but 2013 will not happen again. So if we "only" see double digit gains this year, then your options will be big losers. God forbid we see negative returns in solar stocks; as far as option players are concerned.
