Ok, it’s pretty obvious we’re in the “winner’s curse” phase of this stock market cycle.

This is the phase where stocks tend to rise for no other reason than stocks rise!

Meaning that people see a stock rise, experience FOMO and pile in.

Thus, pushing the stock even higher.

In my past life, I’d recognise that the stock price is higher than what its fundamentals may dictate and simply sit on the sidelines, only to see the stock continue its bizarre ascent and for me to miss out on some gains.

But the new, damaged and improved Pete has learnt! 🤓

This time I’ve made the decision to participate in the ride.

But I haven’t chosen just any old stock.

I want one where volatility is high to allow me the chance of some reasonable gains.

But I still want to limit my risk as I believe next year at some stage a recession will hit.

So I’ve entered an options trade in ETHA, the Blackrock Ethereum ETF, given my previously-discussed interest in options.

I’ve done my numbers and if it hits my price target, that should give me a nice 3-to-1 reward/risk ratio.

Not too shabby!

I’ve also allowed myself some time for the trade to play out with the expiry of the option in December.

I was fortunate enough to enter this trade a few weeks ago, before ETH went bonkers and experienced a 30% increase in price.

So my ETHA trade is currently sitting in a healthy profit position, with time to capture any more upside.

But I’m also very cognisant about hedging my already-earned profits on this trade, so I’ve offset this trade with a short on IWM, the Ishares Russell 2000 ETF.

This ETF tracks small companies and if the economy starts going pear-shaped then any loss of profits from my ETHA trade may be offset by gains on the IWM trade.

I’m my own one-man, long-short hedge-fund!! 😬

In all seriousness, I need to start taking more financial risks and for a long time I’ve thought 2026 is the year where things might start turning south, from an economic viewpoint.

And if that’s the case, I’m going to be on the lookout for opportunities as I’m very much a believer that opportunities arise when everyone’s selling assets.

A bit cold, perhaps, but I have to start being very focussed now … more easily said than done at times!

And as long as this market is being somewhat irrational, I want to be there to benefit from it.

I’d like to say it will calm down to more rational levels, but I’m constantly reminded of the old saying …

“Markets can stay irrational longer than you can stay solvent”.

Here’s hoping for more wins!