Rizwan Memon - Have Enough Liquidity When Shorting Naked Calls

BIO: Rizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands worldwide maximize their financial success through trading.STORY: Rizwan shorted GameStop’s stock, believing the price wouldn’t exceed $300. However, when Elon Musk tweeted about GameStop, the price increased to $500. Rizwan suffered a $160,000 loss on a single trade.LEARNING: When shorting naked calls, make sure you have enough liquidity. Control the amount of money you bet on any particular position. Don’t trade on emotions. “Sometimes the math, the probabilities—everything—can make sense, and you still end up being wrong.”Rizwan Memon Guest profileRizwan Memon is the Founder and President of Riz International, a Canada-based financial education firm that helps thousands of people worldwide maximize their financial success through trading.Having 17 years of experience behind him, Rizwan is a seasoned expert in 8-figure stocks and options trading. Starting at 16 with just $5,000, he has made $10.5M+ in trading profits.With 123,000 followers on Instagram and a vast global audience tuned into his trading advice, Rizwan has established himself as a voice of authority in the financial market. In 2023, he secured solid returns of 70% on his 7-figure trading account.Worst investment everRizwan’s personal investment journey took a hit in 2021 when he decided to buy GameStop stocks. He adopted a strategic approach, betting against the stock going above a certain ceiling. He believed that the stock would remain below $300 per share despite its already significant rise of 300%.Gamestop was a disgruntled business that was not in great shape. It was on the verge of bankruptcy due to massive cash flow issues. Rizwan knew that this was unsustainable. So, he decided to put a ceiling on his investment, believing the stock would stay below $300. From a probability standpoint, the numbers were 99.5% in his favor. Rizwan shorted naked call options and loaded up a bit, but nothing substantive. After that, the stock went from $300 to $500 in about two days. This was after Elon Musk tweeted about GameStop. Rizwan knew he was in trouble. He remembers going to get groceries and sitting in the parking lot feeling miserable. Rizwan suffered a $160,000 loss on a single trade.Lessons learnedWhen shorting naked calls, make sure you have enough liquidity.Trading patterns are always rapidly evolving.Sometimes, the math, the probabilities, and everything can make sense, and you still end up being wrong.Don’t trade on emotions.Andrew’s takeawaysBlack Swans can happen. To handle such events from an investing perspective, ensure you’re diversified.Control the amount of money you bet on any particular position.Actionable adviceAvoid engaging in trades that may be complex or outside of your purview. Regardless of what influencers say, be skeptical and do your due diligence.Rizwan’s recommendationsIf you have questions or want to learn more about investing in stock markets, Rizwan is readily available on LinkedIn and Instagram. He is committed to sharing his knowledge and experiences to help you navigate the complex world of stock market investing.No.1 goal for the next 12 monthsRizwan’s number one goal for the next 12 months is consistently beating the markets again.Parting words “Manage risk and enjoy the process.”Rizwan Memon [spp-transcript] Connect with Rizwan MemonLinkedInInstagramWebsiteAndrew’s booksHow to Start Building Your Wealth Investing in the Stock MarketMy Worst Investment Ever9 Valuation Mistakes and How to Avoid ThemTransform Your Business with Dr.Deming’s 14 PointsAndrew’s online programsValuation Master ClassThe Become a Better Investor CommunityHow to Start Building Your Wealth Investing in the Stock MarketFinance Made Ridiculously SimpleFVMR Investing: Quantamental Investing Across the WorldBecome a Great Presenter and Increase Your InfluenceTransform Your Business with Dr. Deming’s 14 PointsAchieve Your GoalsConnect with Andrew Stotz:astotz.comLinkedInFacebookInstagramThreadsTwitterYouTubeMy Worst Investment Ever Podcast