I was hoping for the stock split and it is finally here .. so here's the chart i will be watching (and trading) for the next 2 weeks - thought to share with other traders who like splits (like me ;) ) ..
I love stock splits because _ with big names like AAPL, TSLA, NVDA..etc, they generate so much hype and excitement that a split announcement presents a wonderful trading event ..
i see so many "gurus" say that a split changes nothing for the stock, and that's true from a valuation standpoint, but the mechanics (option pricing / broker hedging) and trader psychology around a split introduces major catalysts that are known only to few traders.. anyways, that's a whole different topic.
there's 2 trading plays here.. one stage is short-term (a 2-week swing), we trade the split between the announcement to the actual record date for a big move up - then there's the longer term Buy/hold of the stocks for few months after the split - for a possible run generated by the demand of new investors coming in to the (now cheaper) stock.
Big caveat here, the scenario i have on the chart is only a "possible" scenario - and it may not materialize - no one can predict the market - there are major economic news coming next week - so closely managing this trade is super critical. This is a high-risk/high-reward but i like the probabilities .. the wind is (mostly) favorable now but can turn at any moment.. risk management is the key.
i will trade this split with both stocks and long call options (June month expiry) .. i won't keep the options for long, and for the stocks, may unload a part right after the split. i Have my price targets (including the expected call option prices already calculated
If you'd like to read more about why I love splits and how i trade them, pls find my old published idea on the AAPL split back in 2020
Note the record date of this split is Thursday June 6th
This is not a trade recommendation - just sharing what I'm doing.. Good luck.
I love stock splits because _ with big names like AAPL, TSLA, NVDA..etc, they generate so much hype and excitement that a split announcement presents a wonderful trading event ..
i see so many "gurus" say that a split changes nothing for the stock, and that's true from a valuation standpoint, but the mechanics (option pricing / broker hedging) and trader psychology around a split introduces major catalysts that are known only to few traders.. anyways, that's a whole different topic.
there's 2 trading plays here.. one stage is short-term (a 2-week swing), we trade the split between the announcement to the actual record date for a big move up - then there's the longer term Buy/hold of the stocks for few months after the split - for a possible run generated by the demand of new investors coming in to the (now cheaper) stock.
Big caveat here, the scenario i have on the chart is only a "possible" scenario - and it may not materialize - no one can predict the market - there are major economic news coming next week - so closely managing this trade is super critical. This is a high-risk/high-reward but i like the probabilities .. the wind is (mostly) favorable now but can turn at any moment.. risk management is the key.
i will trade this split with both stocks and long call options (June month expiry) .. i won't keep the options for long, and for the stocks, may unload a part right after the split. i Have my price targets (including the expected call option prices already calculated
If you'd like to read more about why I love splits and how i trade them, pls find my old published idea on the AAPL split back in 2020
Note the record date of this split is Thursday June 6th
This is not a trade recommendation - just sharing what I'm doing.. Good luck.
Trade active:
First Target already hit on first day trading on gap up. There will be some profit taking before the split date.. so maybe a good chance to add then. We'll watch closely!
Trade closed manually:
2nd target achieved .. closing half position and most of the long calls .. leaving some in case there's still some upside after the split.
Trade closed: target reached: