- Company is a strong, recent IPO - Sector is hot, IPOs are hotter, ER whisper vs. consensus is very positive - Chart is rare because it is a very bullish 2019 IPO with a perfect Fib-fitting in place already - Usually recent IPOs can be difficult to play, but this one had the Corona-luck of drawing out key areas
-Instructions are in chart for how I''m playing it.***
**Will not be entering until broader market correction lightens in volatility. ***Alternative Entry if it does not retrace all the way to $66 week before earnings: Downward Approach + Hold $70
Piggish Rating: 92/100 because it is an unproven IPO, after all.
Entry today would have been great for $80 Calls and $63 Puts. I think any pullback tomorrow and that's the launching pad for call entry.
Updated Plan: Strangle Entry on 5/28/2020:
If GAP UP to 80, buy PUTS before the inevitable pullback ($75 contracts should be very cheap for 6/19). Then launch the call position (4x put position at least) on the FIRST pullback from the open/initial high.
For those new to options, or want to read about my view on short-term strangles, read below. Otherwise, stick to the Pig Plan and you should triple up within a week.
*It is actually much better to buy into opposing momentum than it is to buy at the bottom of a pullback. Thus, the best Call entry for shorter-term contracts tomorrow will be the strongest move down, which should be the first pullback of the day (assuming gap up/green day).
The only reason longing options CAN be more profitable than writing options is because traders can skillfully snatch offsetting contracts at very discounted prices. If timed correctly, (not easy, takes years to get good and even then it is difficult), I have found that it is the most profitable and least risky way to trade securities.
Piggish Revisions: Upgrade to 94/100 due to improving technical conditions.
Trade active
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Still have not entered, this setting up perfectly for an early entry into next week. Half the long position should be entered today, at a strike that is 2 bucks above the open. 3/4s should be in place for next week by close, along with 1/2 put position (buy on any bull bounce).
Looking tasty.
-Pig
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Dont know about you guys, but if everyone had timed this within a day of the post, sincere congratulations. It's a ten-bagger if you strangled it even slightly OTM.
Best part: Earnings report is on June 6th...
Sold 1/20 contracts so that it's now a position of house money.
Kept the puts because it is a sensible thing to do in a market that is so unsensible.
-Notorious P.I.G.
Trade closed: target reached
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Target reached like a week ago. Not going to get greedy and 100 is a big number. Please take at least some profits by tomorrow, if you haven't already.
This is my first Options Trade. Called at $85 strike a few days ago, for 6/19. Was more confident back then...
Should I do a spread somehow? -- still learning, soaking up all I can. Thanks for the insight!
UnknownUnicorn5511258
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@c0nley, my advice is to keep those contracts aside, and not look at them.
Start a new position buying calls and puts simultaneously when the stock seems to bottom. Ex: Buy 40 Calls @ 78 strike for 6/19 and 10 Puts @ 63 strike for 6/19 (called a vertical strangle)
Would look for key areas like 65, 66, 70, 73 for entries, decreased levels of volume and flattening base.
Hope this helps, and good luck!
c0nley
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@Perma_Pig, Hell ya it does. Thank you!
UnknownUnicorn5511258
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@c0nley, you got it brudduh, thank me when you book a profit
Should I do a spread somehow? -- still learning, soaking up all I can. Thanks for the insight!