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PhilippeDelpCFA
Oct 11, 2023 7:20 PM

100 % more return potential with half the risk  

ChargePoint Holdings, Inc.NYSE

Description

First of all if they raise the cash and reduce the convertible price it is very good for the balance sheet and debt situation, I agree it is dilutive but we talk already at 12 so we talk 300 % above current price before you worry about dilution for the convertible note !!!!

selling shares at markets for so much is a good sign to me and give the company more flexibility , it also shows existing shareholders that institutional investors are taking huge risk in this company, why would they do if they did not think it has good upside ?

Sure it is highly dilutive but hey I am entering now and the dilution effect is priced in at around 15-20 %

reduce financial risk for a while

Bought a 20 deep ITM long option strike 2 may 24 for 1,95 each so total 3900 dollar after fees and delta close two 1 so basically it is like owning 8000 dollar of chPT but half the downside risk

I intend to sell OTM call at 80 delta so

today I sold 20 contract call 5 @ 0,20 so 400 dollars in for 44 days

Return of +- 10% each month if you keep repeating until exercise

if you get exercise no worries bingo for you if you don't your return on the 3900 will be roughly 60-70% til May 24 PLUS THE CAPITAL APPRECIATION OVER 3,95 DOLLAR PER SHARE ON 2000 SHARES

Comment

forget to mention , do what you want and trade at your own risk

take care

Comment

keep selling calls and roll over , don't worry about the price movement except something fundamentally changed

I Know the volatility is huge but that's also the reason you got huge premium selling calls

keep until next earnings and reassess then

this is not for low risk investor and you need to manage your position size properly especially these risky names

Comment

I mean keep rolling is you got already the full value of 400 dollar in you pocket so you sell an other call in 30 days at 80 delta at roughly 15 so about 300 dollar

so you already got 700 dollar on 3900 in less than 1 months

if the price goes up sharply you can roll out and up the calls and pocket the profit on the share

anyway you need to learn to manage postions like this and not b a siting duck

not financial advice !!!!
Comments
Hitman47code
That was exactly my thought :) tnx
I would like to add that imo - The ‘issue’ with the current stock price is mainly that they only have earnings 2 times a year.
Most retail investors do not want to wait that ‘long’. So there is/was little interest in CHPT.

I also think many forget that these ‘other auto companies competing with Tesla’ who ‘start their own charging network’ are doing this THROUGH CHARGEPOINT. Only with their own logo on the machines ;) (* plus maybe with their own phone-app, we don't know that part in detail yet)

Chargepoint is far from over, they are now finally getting started!

* I’ve bought 900 shares today, but also trade to your own knowledge. It might be wise to buy at 3,50.. but for 3,92 (my price) to me that is worth it enough (and I do not have to miss out on the action)

Happy trading!
PhilippeDelpCFA
@Hitman47code, hence the strategy to use LEAPS and sell calls OTM to de tease the average cost drastically while waiting or generating good income with a very high IV so you don’t have a dead dollar in your account
mdwcreative
Any updates on this trade?
MyCryptoParadise_Nathan
I've learned so much from your analysis. It's evident you put thought and expertise into your posts. Looking forward to more!
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