On the daily chart, the MACD momentum bars finally turned green after a huge sell-off over the last month or so. $SOAC price action has been trading under NAV, so I want to feed some ideas for you to consider when recovery happens and how we might be able to get us a great payoff in just a few weeks.
The market reminds me a lot of what we were experiencing a year ago. How many times have we look at any given chart this year and think "Darn, too bad I didn't buy March 2020, it was so discounted..."? $SOAC hit a high of $12.72 on Feb 22 21, keep this in mind as we make a play below. Generally, the SPAC sector saw lots of money leave its ranks in the past month or so, but this won't trend forever. If you believe the SPAC industry will recover (even modestly), Now is the time to get into some option plays with time for them to perform. $SOAC provided their DA at possibly the worst time with Deepgreen Metals (url is "deep.green"). If you haven't already, go to their website, and look under the tab "NODULES", it's a pretty freaking awesome concept!
Super discounted play idea:
BULL CALL DEBIT SPREAD
BUY 21 MAY 21 CALL 10 STRIKE
SELL 21 MAY 21 CALL 12.5 STRIKE
COST AS OF 3/26/21: $0.15 DEBIT
BREAKEVEN AT EXPIRATION: $10.15
MAX REWARD AT EXPIRATION: $2.35!
That's right. $15->$235 for each of these. $SOAC doesn't even have to reach beyond $12.50 underlying to make a profit (even though it has shown that it CAN hit $12.50+ recently), anything over $10.15 at expiration is profitable. Heck, breakeven as of close today (3/26/21) is already around $9.98 underlying. Here are some examples of how this vertical might payout if it works out:
APX:
$10.15 @ EXPIRATION: +$0
$10.50 @ EXPIRATION: +$35.00
$11.00 @ EXPIRATION: +$85.00
$11.50 @ EXPIRATION: +$135.00
$12.00 @ EXPIRATION: +$185.00
$12.50+ @ EXPIRATION: +$235.00
My personal down to Earth sentiment: I 100% believe that by May 21, $SOAC will show some signs of recovery, probably in the $11.25-$12.00 range. Given that, our Vertical play above is cheaper than just playing the 21 MAY 21 $10 Strike alone and also our payout table is higher than the standalone option as well. Verify with your own DD ;)
Hope you love the idea! Let me know what you think and how many of these vehicles you plan to play. Good luck with your trading!
The market reminds me a lot of what we were experiencing a year ago. How many times have we look at any given chart this year and think "Darn, too bad I didn't buy March 2020, it was so discounted..."? $SOAC hit a high of $12.72 on Feb 22 21, keep this in mind as we make a play below. Generally, the SPAC sector saw lots of money leave its ranks in the past month or so, but this won't trend forever. If you believe the SPAC industry will recover (even modestly), Now is the time to get into some option plays with time for them to perform. $SOAC provided their DA at possibly the worst time with Deepgreen Metals (url is "deep.green"). If you haven't already, go to their website, and look under the tab "NODULES", it's a pretty freaking awesome concept!
Super discounted play idea:
BULL CALL DEBIT SPREAD
BUY 21 MAY 21 CALL 10 STRIKE
SELL 21 MAY 21 CALL 12.5 STRIKE
COST AS OF 3/26/21: $0.15 DEBIT
BREAKEVEN AT EXPIRATION: $10.15
MAX REWARD AT EXPIRATION: $2.35!
That's right. $15->$235 for each of these. $SOAC doesn't even have to reach beyond $12.50 underlying to make a profit (even though it has shown that it CAN hit $12.50+ recently), anything over $10.15 at expiration is profitable. Heck, breakeven as of close today (3/26/21) is already around $9.98 underlying. Here are some examples of how this vertical might payout if it works out:
APX:
$10.15 @ EXPIRATION: +$0
$10.50 @ EXPIRATION: +$35.00
$11.00 @ EXPIRATION: +$85.00
$11.50 @ EXPIRATION: +$135.00
$12.00 @ EXPIRATION: +$185.00
$12.50+ @ EXPIRATION: +$235.00
My personal down to Earth sentiment: I 100% believe that by May 21, $SOAC will show some signs of recovery, probably in the $11.25-$12.00 range. Given that, our Vertical play above is cheaper than just playing the 21 MAY 21 $10 Strike alone and also our payout table is higher than the standalone option as well. Verify with your own DD ;)
Hope you love the idea! Let me know what you think and how many of these vehicles you plan to play. Good luck with your trading!