AVGO Closing my hedge for a roughly $12k Profit!

Intro hello Traders Steve Gans here and I want to talk about the avgo long call that I hedged not too long ago so avgo had an earnings announcement and it rocketed up and my expectation was that after it treaded sideways here a little bit that it probably wasn't going to go much higher so I wanted to hedge this trade Hedging AVGO Long Call Options so if we take a look at the trade itself the long call and this started off as a single long call then they had a 10 for one split so it ended up being 10 long calls and I was up at one point about $107,000 in that position now I felt like that was kind of a blowoff top when we got to this point up here and so I wanted to hedge the position against a pullback so I ended up that I sold 40 call spreads against my 10 long calls and what that looked like if I come in and I take a look at this particular position it basically let me give the range a little wider it basically looked like this so if it went up above 165 it was going to start to put some pressure on that position but if it stayed in that 165 area or so I had a lot of theta Decay that I could gain out of this position and if it were to have pulled back back which it did I would lose less money than if I had the strict long call the reason I would lose less money is by selling this 40 call spread I'm taking in $765 per now I'm paying out 420 for this long call in case it blew out the top so let's call it roughly I think that's what roughly $3 time4 that's about $122,000 in Decay that I could have paid picked up in this trade and in fact I did pick that up I mean this trade is now essentially fully uh depreciated if you will these are now down to where they're worth about 13 cents something like that these are going to be worth next to nothing so I actually closed Closing the Trade Strategy this trade out today I closed out this spread and I'm up 95,000 again this thing pulled back significantly from those prior Highs but let's take a look at where I would be if I did not hedge that trade so if I had not hedged that trade I would be back here at about $82,000 so by putting on that hedge when the market was back up here in this high range by adding a hedge to this trade as the underlying sold off those call spreads essentially became worth worthless and again I had sold those for whatever that was $3.50 a piece I'm now buying them back for a few pennies so that added to the p&l of this trade so Future Game Plan for Trades my game plan going forward is I'll watch avgo here my expectation this looks like a fairly firm you know base to potentially Rally from again and if I do start to see that rally coming back into play I may add a long call or two but more than that if we get back up into this 168 range or so I might look to add a new hedge again at that time so I just wanted to kind of let people know how that played out the fact that that did and did add $112,000 or so to that trade another thing I could have done as I pointed out back when we were up here I could have just sold my long call at that point and just ended the trade but I still feel like there's potential in this trade and I don't necessarily want to take that big profit here in 2024 year as well uh for tax purposes and again everybody's different in that depends on the type of account you're trading in ETC so I am not trying to give any tax advice but for me personally it made more sense to hang on to it and hedge it than it did to go ahead and lock in those short-term capital gains so thanks so much everyone Like & Subscribe for More please if you like this content like like subscribe if you have any questions comments make sure to make them down below take care have a great weekend everyone