Market impact of Abe assassination, thoughts from GS, MS, and ME. My view: Liberal Democratic Party gains support in 10 Jul elections and moves ahead with Abenomics/hawkish foreign policy. Upside potential for nuclear power industry and Japanese defense contractors.
Market impact of Abe assassination is risk off, think it's likely the Liberal Democratic Party gains support in 10 Jul elections and moves to implement Abenomics-themed economic policies/hawkish foreign policy. Looking at upside potential for nuclear power industry and Japanese defense contractors.
Market impact of Abe assassination is risk off, think it's likely the LDP gains support in 10 July elections and moves to implement Abenomics-themed economic policies/hawkish foreign policy. Looking at upside potential for nuclear power industry and Japanese defense contractors.
> Core CPI minus energy is the lowest in 11 months. You don't really know how to talk about data. The July 2022 CPI minus food/energy is the **highest it's ever been** at 295.275 and it did go up 0.3% month over month. You might say it was one of the lowest month-over-month prints in the last 11 months. That doesn't really mean much, considering it was largely the same as the March print, and is still way above the average month over month change over the last decade of about 0.2% (which itself is influenced by the strikingly high inflation over the last year plus). |**Month**|**CPI**|**MoM Chg**|**% MoM**| :--|:--|:--|:--| |Jul-22|295.275|0.921|0.3%| |Jun-22|294.354|2.065|0.7%| |May-22|292.289|1.834|0.6%| |Apr-22|290.455|1.644|0.6%| |Mar-22|288.811|0.933|0.3%| |Feb-22|287.878|1.447|0.5%| |Jan-22|286.431|1.661|0.6%| |Dec-21|284.770|1.591|0.6%| |Nov-21|283.179|1.474|0.5%| |Oct-21|281.705|1.688|0.6%| |Sep-21|280.017|0.711|0.3%| |Aug-21|279.306|0.512|0.2%| |Jul-21|278.794||| https://fred.stlouisfed.org/graph/?g=SQ47 It's still increasing every month by quite a bit and that's a major issue.
Thanks for the response/notes. I agree CCs are not ideal in a bull trend. It helps to some extent in a bear trend, and works really well if the stock is moving sideways. My goal with CCs is to generate a moderate income but more importantly to manage volatility. To give some background -- I have a Portfolio Margin account (can borrow significantly more than a Reg T margin but very high risk in a downtrend/volatile periods if not properly hedged), and my current portfolio is a little over 5 Mil. Have just around 5 stocks -- all mega/large cap with a lot of option action AAPL, AMZN, AMD, DIS, SQ. I have been using options -- CCs, and spreads for a few years now. Previously, in my CC approach once the stock reaches around the strike + premium, I would roll to ATM for the following monthly. Then, I figured selling Puts at ATM (for same exp.) works better due to premium + higher theta + avoiding a potentially high bid-ask spread on the CC that would need to be bought, and works well if the stock continues to rise. If it drops, then the CCs are in a better state. Using this approach, in this particular case, I have been able to generate a profit of $6/contract so far (from the Puts I sold and rolled over). So, in all I have collected \~$7 (from the CC) and \~$6 (from the Puts sold) which would have been better than rolling the CC to 9/16\_95c. Now, the 8/19\_100p have an extrinsic value of $1.96 left. If AMD remains where it is or rises, I will be able to collect that too. Re. am I able to roll -- yes, I can and that is not the issue. And, what you are proposing works too as I have been doing it for years. Its just that the bid-ask spread widens for the **deep** ITM leg (which means the dealer makes a killing) and when you consider 50 contracts, my cost to roll that leg increases. Also, I do need to hold the CC position till expiry due to the Puts sold (significant theta left). So, a thought I have been mulling over -- why not buy 5000 shares on the day of exp. (bid-ask spread in the stock is a few cents), wouldn't it reduce the cost by a significant amount. Let's say, AMD remains over $100 on 8/19, the bid-ask spread on the 8/19\_85c could be over $1 (or even $1.5) with delta \~1; the cost to roll is reduced by \~ $5-7.5K. Re. the p/l: I did not fully understand your point there. Assume AMD is at $101 on 8/19, I will assign the cost basis for the 85 CC assigned to the 5000 shares bought on 8/19. So p/l for CCs will be 5000\*(85+7.11-101) = -44.5K, and p/l for Puts sold \~ +40K, thereby net p/l of -4.5K. Open a 9/16\_100 CC so that original lots of 5K still remain as is.
Yea, unfortunately my mind changed recently. I am still holding the other two stocks that I mentioned which is ABNB and SE. Maybe I am wrong, who knows, but after the recent earnings I am much more confident in ABNB to SQ. As for SE, will need to access once earnings are out next Tuesday.
I'd even debate that even a long term investor has to be careful, a stock might end up higher after 5 years, but depending on entry, significantly add or limit gains. I know obviously no one knows future, but idea is that there has to be some logic and foresight in making moves. Anyone that bought MSFT right before dot com crash, it moved sideways throughout 2000s, they would've come out on top, if they held to this day, but whether bought right before or after crash will make a significant difference. For instance right now, SQ is around $80, it's low this year was $60, but it's high was $280. Say couple years from now it became $600. Someone who purchased at $60 has now 10x their investment, someone who purchased at $280 would just little over 2x. This is really different. While no one could've timed bottom would be $60, it's very reasonable someone could've foresighted at $280, it's PE Ratio was off charts absurd, so might've made more sense to wait a bit, say till $160, then start DCA to $60. I also believe in DCA, but again think idea is that it's not always a straightforward move to just constantly buy, knowledge of upcoming events, and knowing valuations, has to be considered.
# Tickers of Interest **Gamma Max Cross** * [CLF](https://options.hardyrekshin.com/#CLF) 09/16 19P for $0.85 or less * [RCL](https://options.hardyrekshin.com/#RCL) 09/16 40P for $2.35 or less * [LAZR](https://options.hardyrekshin.com/#LAZR) 09/16 9.5P for $0.55 or less * [SABR](https://options.hardyrekshin.com/#SABR) 09/16 7P for $0.10 or less * [TECK](https://options.hardyrekshin.com/#TECK) 09/16 32P for $1.65 or less **Delta Neutral Cross** * [IWM](https://options.hardyrekshin.com/#IWM) 09/16 195P for $4.40 or less * [FCX](https://options.hardyrekshin.com/#FCX) 09/16 32C for $1.60 or less * [SQ](https://options.hardyrekshin.com/#SQ) 09/16 90C for $6.60 or less * [KRE](https://options.hardyrekshin.com/#KRE) 09/16 65/66 Strangle for $3.70 or less combined * [SMH](https://options.hardyrekshin.com/#SMH) 09/16 240C for $8.95 or less # Trading Thesis Technical analysis and indicator based trading tend to use past price performance in order to predict important price levels today. This analysis is based on the option open interest. With that option open interest, it calculates portfolio-level greeks--notably Delta and Gamma. More importantly, once the portfolio level greeks are established, I can now simulate the change in greeks at different price points. From there, I can find the price levels where portfolio-level gamma is the highest, and the portfolio-level delta is close to 0. For some tickers, the underlying price reacts strongly off of delta neutral, gamma max, and sometimes both. It's the reaction off of these price levels in the past that is being used to drive trading signals. The plays and target entry prices given are calculated using a binomial option pricing model that reflect the expected size and duration of the reaction from gamma max or delta neutral. A lot of these plays are profitable by underlying moves in stock. The best plays benefit from the directional move as well as the increase in IV. # Notes * If the price has moved past the entry price, exercise caution. Someone knows something that I don't know. * Look to sell half your position on a double, and freeroll the rest. * I tend to risk up to 1% of my total capital on any trades I take. If my conviction is lower, I'll only allocate 0.5% or even 0.25% of my capital to the trade, and dollar cost average in. # FAQ * These plays are mostly puts. Are you a gay bear? * No. It so happens that the companies have had some recent run-up which implies they are overextended. These trades are primarily some form of mean-reversion either toward or away from an important price level. * Are you entering all these plays? * No. There have been a dearth of plays in the WSB morning talks, and so I opened up my bag of tools slightly wider to point out more plays with a probable edge to help lead apes to more gain porn. Go through this curated list of plays, pick the ones you like based on whatever additional analysis you use, and get that gain porn.
Some interesting companies reporting this afternoon: * Coupang - Can the margin expansion they showed in Q1 that triggered the share price to rally maintain? * Bumble - Do they follow Match's lead and show a major slowing in revenue and paying users or do they prove Match is Match's problem rather than it being an industry problem? * Dutch Bros - They're going to be begin lapping some really tough quarters as of Q2'22. Really curious to see they have maintained their expansion rate of new stores (guided for 30 in Q2 and 130 for the full year). * Marqeta - They continue to announce new partnerships. where does their concentration risk fall? Sutton Bank was 86% of TPV in Q1'22, down from 94% in Q1'21. Revenue from Block (SQ) was 66% in Q1'22, down from 73% in Q1'21.
Schulman said by end of year. I don’t think it’s as big if it was Paypal instead of Venmo (Venmo only U.S.). I own PYPL and like them long term though I think SQ’s Cash App will be the biggest (super app) digital wallet overall winner. If you want to play the “alternative” Amazon checkout game, I would choose Affirm (AFRM) since they have deals with Amazon, Shopify, Walmart, etc.
Correct, stock based compensation. 6/30/21 to 6/30/22 saw a huge increase in SBC. Meanwhile a lot of other companies have decreased it due to the macro economic tailwinds and not to dilute shareholders while these stocks lose value. But either way, Jack is making money regardless, but holders of companies like SQ and TDOC are getting bamboozled by senior executives.
Do you want something with similar risk/reward? If so TWLO is starting to look interesting imo. They provide a communication APIs to businesses and have have been growing rapidly over the last few years. Going forward they're projecting high double digits YoY growth and are aiming to be profitable in 2023. If they can achieve what they're projecting I believe they're quite undervalued right now. If things go well I think the stock could easily 2-3x over the next year or two and further downside is probably limited at this point given it's gone from a multiple of 20x ev/sales to about 3.5x today. The issue is that they're not yet profitable which the market obviously doesn't like right now. I don't own it at the moment, but I'm looking for an entry in the low $70s. I think it could be a good one to swap SQ for, but obviously look into the company yourself and make sure you're comfortable with what they do - it's a high risk/reward stock. Also just FYI, they've been involved in a data breech this week so likely to be some ongoing near-term risks related to that. Personally I think that's probably an opportunity to get in at a good price, but I guess we'll see. If you're looking for something safer, I think GOOG is a pretty good buy right now.
because the SEC report says it never was a SQ or Gamma squeeze rather then pure retail. Also IBKR chair said if we´d had a real shortsqueeze the price would go to sever thousands. ​ Also its impossible according to the volume that shorts have covered. The DD is there, you are just in denial of accepting it. I will dry you tears with my big money when we ride this bitch to new galaxies. ​ !remindme 6 months
Tickers: PYPL - PayPal. It is now *Fully Operational*. Calls! SOFI - Going Sideways. It's going to get hit as it continues to be unable to serve customers in the way they need in this environment unless it gets micro lending and crypto wallets. Moving to Straddle. DAVE - Lending is heating up. This is a full *Trust zme Bro* but Dave. I'm gonna get drunk off calls. HOOD - It's actually a fantastic wallet service but I don't think it'll pivot in time. Puts. Chime - not public yet, no longer looking into IPO. May revise later if their product changes. It's building to be a combination of Cash App and Dave. SQ - Block, Inc, formerly known as Square. Runs Cash App. Sideways. Straddle.
I'm going w SQ over paypal cause I see those lil square things to take credit all over - every vendor at the farmers market and any festivals always using the square thing. What is the reason I should reconsider paypal? am too stupid to follow what sheppardess is sayin.
Warren Buffet just lost 48 billion dollars . It happens to everyone - no one - again no one makes 10% daily gains per day . You got clipped we all do - I could punch Jack Dorsey and SQ right now - we all get duped, and buy in to a concept -
On the bright side, DASH, UBER, RIVN, SNAP, SQ and all those growth names don’t need to worry about a tax increase. Gotta make money first ![img](emote|t5_2th52|4275) And no, non-GAAP accounting doesn’t count ![img](emote|t5_2th52|4271)
Why is there a club that I missed out on where that became an official rule? I've made a ton off SQ, TSLA, and others too. Does it make you uncomfortable that I said that? I've been trading a long time, bud. There's people who post gain porn here everyday. I'm not sure where you're coming from.
My money is on reaching 1B+ market cap at least then I'll be trading volatility after that. I think this a correction back to a more reasonable MC as the current macro climate pushed the price too far down. PYPL SQ and COIN had big upward corrections too but no one is talking them. Bad news pushed them too low for their value.
GS just released a report that a high percentage of winning earnings go down the day before however - last week right before I played MELI 150k profit off 10 2900 910 calls big sell off . SQ right before Dorsey screwed me small time someone bought 300k shares at 3:59 . So not always - but most times yes
That's true, it does look highly correlated. But PAGS has a beta of 1.73 and rallied 33% while SQ - with a beta of 2.45 - and STNE, with a beta of 2.39, rallied 11% and 16% respectively. Hence why I am wondering if there is another factor at play.
This really angered me as well...even if SQ does really well in the future, with the amount of stock based compensation the share price could still be behind where it is now. After seeing how greedy they have been I am looking for an exit. Good business, great porential but I dont want my money in a Jack Dorsey led company anymore.
No one who covers SQ cares about EPS or impairment charges. Or bitcoin revenue for that matter. All that matters is Seller (now re-named 'Square') business gross profit, and Cash App gross profit growth. A single digit % of Cash App gross profit comes from Bitcoin trading. The rest of it all comes from Instant Deposit fees in Cash App and spending on the Cash Card, where they earn unregulated debit interchange (\~150bps as opposed to the banks making single digit basis points). The growth and sustainability of gross profit there is what matters.
I say this as a SQ bag holder. Diving income, diving stock, yet DOUBLING of their stock based comp ($, not even shares) for the last 6 months year over year. As long as Jack and team keep getting paid for this garbage performance then apparently all is good by them. And I don’t want to hear about the stock being up from 4 years ago. I’ve gotten slaughtered in this thing.
Must look at SQ long term, beyond next few quarters, they have the top Super App in fintech and will be THE dominant in digital wallets. Paypal will strive too, but like Block better in the long run. Short term, PYPL should do better. I think 10 years from now when crypto is widely used an accepted, you’re looking at a Visa vs Mastercard.