How To Get Paid To Protect Your Own Stock

ASTS is my firstborn, you already know this.

It is literally the GOAT.

It's also up enormously, and if you were in it early like I was then it puts us in a weird spot right now.

Because SpaceX is coming.

And I have been telling you for weeks that when SpaceX finally hits the public market, it's going to act like a vampire.

It’s going to suck the money out of the whole space sector for a week or two, and every name I love will take a hit, before they bounce back.

So if you own ASTS into that, you feel like you have two choices.

Sell now and lock in your gain, but then you're out, and you'll be sick watching it run again without you.

Or white-knuckle it, hold through the vampire, and watch your gains bleed away for a couple of weeks.

Both of those feel terrible.

But here’s the part nobody tells regular investors.

There’s a third door, one I learned from Mark.

 

It's called a collar.

Mark, who spent years as a market maker on the floor, built one for me right on my screen during the Trade to Close livestream yesterday.

The second he laid it out, I said it out loud: this is literally what I've already been doing with my own ASTS, he just made it clean.

So let me hand you the whole thing exactly the way he handed it to me.

What a Collar Actually Is

A collar is two moves at once, wrapped around a stock you already own.

You buy a put, which is just insurance.

It gives you the right to sell your ASTS at a set price no matter how far the stock falls. If the vampire bites and ASTS drops, that put goes up in value and cushions you. That's your floor.

Then you sell a call, which is a promise that you'll sell your shares if the stock climbs above a higher price. In exchange for that promise, somebody pays you cash today. That's your ceiling.

Floor below you. Ceiling above you. Your stock sits in the middle, protected on the way down, with room to keep running on the way up.

Now Watch What Mark Actually Built

Here is the exact collar Mark put up on my screen, so you can see how the pieces fit.

He went out to June. In his example he bought the 110 put, which cost about $6.50. Then he sold the 155 call, which paid about $8.

Look at what that does. You spent $6.50 on your insurance and collected $8 for your promise, so you walked away with roughly $1.50 in your pocket. You did not pay for protection. You got paid to put it on.

From there the math is simple. If ASTS goes parabolic, your shares get called away up at about $156.50, so your room to run from here is around $26.50. If it rolls over and tanks, your put has you covered down at about $111.15, so the most you're exposed is around $18.50.

More upside than downside, and they paid you to take the trade. That is the whole reason I smile every time I look at it.

Here's Why It's Special on ASTS Right Now

You can't always collar a stock for a credit. Usually the insurance costs you something. The only reason this works so beautifully on ASTS is the way the options market is pricing the options.

Everybody and their mother wants to bet on this thing going to the moon, so the calls are wildly expensive compared to the puts.

It's all that hopium priced right into the options. Traders greed for the upside is exactly what pays for your downside. You are letting the moon-chasers fund your insurance.

And This Is Where It Gets Fun

Say the vampire shows up exactly like I think it will. ASTS dips into the SpaceX IPO.

Your put just got more valuable. So you sell it, you pocket that money, and now what do you do with it?

You go shopping.

You take that cash and you buy more ASTS at the lower price. You never gave up a single share of your firstborn, you got paid to wait, and you came out the other side holding more of the GOAT than you started with.

That is the whole game. You stop choosing between protecting your money and believing in your stock. You do both at the same time, and you let the options market cover the bill.

Rock On,

Voz

P.S. While this collar marinates, I'm not just sitting on my hands. I'm slinging options every single morning. Today in Game Plan we hit both zones. The put fired right on the open, and the call zone went off as the market ripped to a brand new all-time high.

My gamers were eating. One member grabbed the put at 1.36 and was out at 1.61 in minutes. Another caught the call at .90 and rode it to 2.71. One more turned 1.12 into 4.04 on the day. That's the other half of how I trade: the slow, patient hold on my firstborn, and the fast same-day plays that pay me while I wait. If you want the zones every morning before 10, come get in the game.