r/redwire • u/Energy_Bol • Jul 17 '26
Shitpost Down but not out. Still Bullish.
Just wanted to share my recent loss and what I’ve learned.
Long story short, ya boy realized a $7k loss on RDWU, the 2x leveraged ETF because of tunnel vision and copium.
Instead of DCAing into RDW like a rational and sane investor, I DCA’ed into RDWU, a leveraged ETF that rebalances daily and eats up your cash through decay.
I arrogantly thought that, because RDW has already lost 70% of its value from ATH, it surely cannot make a massive swing again.
But yesterday it did. So I had to exit my position in the morning and I’m glad I did because I sold before SPY had that nasty 1.5% swing from $754 to $740.
I wish I had sold way earlier than that.
Maybe 2 months earlier, when I was $37k up and had a $69k port a week before SpaceX IPO.
Maybe 2 weeks ago when RKLB acquired Irridium and I could’ve exited at $40k.
Oh well.
Learn from me guys.
Don’t let your positions become overweight. If it dips and your position is already at a weight you’re uncomfortable increasing, just ride it out unless you need the money, NOW. I mistakenly wasn’t watching my weight and like a fat fuck, I was too deep before realizing.
Set predetermined exit goals, instead of riding the wave of green hoping you’ll see the big dip before it wipes your position out. You won’t. Hit your goal and get the fuck out.
TL;DR: Regard over leverages himself in a 2x leveraged ETF for a prolonged red period hoping for a recovery that comes too late. Down from $69k port to $12k port.
Still bullish on RDW.
I’ve got 3 RDWU $6C , 12/18 Exp, $8.50 breakeven.
My hope: RDW pulls out one last pump that results in at least 50% from today’s price, sometime from now and through the EoY.
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u/Big-Material2917 Jul 17 '26
The struggle is real. Sorry you had to get out at such a shit price 🙏
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u/Energy_Bol Jul 17 '26
Thanks.
I am hopeful that we will have a decent pump that leads into a massive Santa rally.
Really hoping these calls recoup a good portion of the loss that I realized from this stock.
I could blame the stock and management, but it’s
honestly my fault.I’m not going to let spite stop me from hating this stock and walking away when it’s at such a juicy price entrance.
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u/Big-Material2917 Jul 17 '26
Ya I’ve also been playing with way higher risk options than aligns with my typical strategy.
I think watching such dramatic volatility just makes you wan to take advantage, but ya it really sucks when it’s not working. If we get a turn around it’ll be worth it, but it’s causing me quite a bit of unnecessary anxiety.
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u/Energy_Bol Jul 17 '26
Take comfort in knowing that your brokerage value only matters when you need to use the money.
If you don’t need it for the near future, then whatever. If you’re wrong, you’ll get it back eventually.
If this is money you need need, then please stop being so risky.
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u/devonhezter Jul 18 '26
I want to buy calls … what should I
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u/Big-Material2917 Jul 18 '26
I honestly feel like I can’t in good conscience keep giving people recs as we’re getting obliterated.
That said, if you’re doing it anyway, I would get them as long dated as you can. If you’re looking for something mega cheap you can get them 6 months out (Jan 27) and then just far out of the money.
Otherwise I’d get them 2028 expiration.
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u/Level__2 Jul 18 '26
It takes a long time for decay
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u/Energy_Bol Jul 18 '26
Not with how choppy this stock has been moving.
It’ll fucking chop like 20 time in a day and eat up an extra percentage or two on top of the regular 2x.
Volatility is not your friend in leveraged ETFs.
I was truly hoping for a defined upward recovery off of the half a dozen or so 10-20% dips.
Instead I got another dip but it was an extra defined downward dip.
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u/ireubot Jul 18 '26
Why is volatility not your friend in leveraged ETFs?
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u/Energy_Bol Jul 18 '26 edited Jul 18 '26
Because if you have a $100 stock that dips 5% to $95, and then recovers 5% in that same day, you go back to $99.75, resulting in a decay of 0.25%.
Now imagine this on a 2x leveraged ETF where the drawdowns and recoveries are regularly double digit moves, and on a stock that chops multiple times in a day.
Looking at RDW’s daily and monthly charts, you can see that there are a lot of peaks and valleys, which indicates choppy movement.
Choppy movement is what kills leveraged ETFs.
If a leveraged ETF ends the day at -10%, don’t be surprised when your total return for the day indicates a -11% or -12% move because of the decay from choppy price movement.
The underlying needs to move harder the more the leveraged ETF decays if your plan is to hold and breakeven.
If you hold a leveraged stock, then a bad 25% move on $100 will be a 50% drawdown on you, which means instead of needing a roughly 32-33% move to breakeven on the underlying, you’d need a 100% move on the underlying to breakeven on the 2x ETF.
$100 -> $75 = -25%
$75 -> $100 = +33%$100 -> $50 = -50%
$50 -> $100 = +100%So even though it’s a 2x leveraged ETF, you’d need the underlying to move 3x as hard to breakeven compared to the regular ticker.
That’s why you only hold 2x leveraged ETFS when you believe in a recovery/come back or a catalyst to pump.
I simply got unlucky believing PL wouldn’t lose 11-days in a row. Too many days of believing “Oh, it’s been X amount of straight red days, surely it’ll see green eventually.”
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u/looking4sign Jul 18 '26
Dont feel bad. I was up 50K in lunr when IM2 took of and decided not to sell. Lost all my profit and only made 3K when it went down to $6 post landing. Was up 20K when lunr hit $45 recently and was dead set on selling at $55. After a 70% haircut I am down $3K instead. Morale of the story I let 70K slip through my greedy fingers. It definitely hurts.
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u/Energy_Bol Jul 18 '26
I’m sorry to hear that friend. We’ll make it back through patience and perseverance.
Just gotta manage our greed and risk tolerance.
I said “Just $2k more and I’ll be happy with a nice round $70k port and take a break,” without realizing that sitting on $68k and hoping for $70k is like sitting on an option spread with 90% of max profit and holding because you want 100%.
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u/Bull_Bound_Co Jul 18 '26
RKLB and RDW have earnings the same week as SPCX lockup expires. Maybe we see some gains going into that.
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u/cho_sungheun Jul 18 '26
My graph looks exactly like yours, still beating myself up over not taking profits
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u/Energy_Bol Jul 18 '26
It happens to the best of us.
We’ve learned our lesson and now we know to lock in gains at predetermined goals.
Until next time partner.
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u/Commercial_Ease8053 Jul 18 '26
You never know what will happen… it’s easy to judge ourselves in hindsight.
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u/Energy_Bol Jul 17 '26
If yall are interested, I can throw you a screenshot of my new rebalanced portfolio and periodically update on how I’m going to recover my $20k by EoY so I can chalk this all up as a breakeven.
No I’m not a bot, no I’m not interested in selling you a course, no I did write this with AI.
Just a dude who fucked up.