Business Education, Options Trading, Personal Finance

Back in Action!

In May this year, fearing that Putin may go crazy with weapons of mass destruction in Ukraine, I decided to stay away from investing. I was right, but for wrong reasons. I would file it under ‘got lucky’ column. So on October 27th, when Facebook (called META nowadays!) fell by more than 25% and lost about 80 Billion$ in market cap, I thought I would sell some puts. I sold Oct 28th $95 puts. Thankfully, META stayed above $95 and I got to keep the premium. But by Nov 3rd, it fell to $88. I’m watching it carefully even as it reaches $113 on Nov 11th. I’ll make a decision about buying some this week. Facebook fell from $350 to $88! AMZN fell to $85 from $188 and GOOGL to $83 from $151.

Business Education, Options Trading

My trades for November 2021

First, I closed all my October trades on Nov 4th and booked my profits though the options were expiring in Jan. Why? I don’t trade on margin. I don’t want to go long either. So, back to selling naked puts! Here are my trades for Nov.

Transactions

Sold 10, Jan 22, SPXL 70 puts for $0.90

Sold 10, Jan 22, RIVN 70 puts for $3.30

Sold 10, Jan 22, RIVN 55 puts for $1.45

Sold 10, Jan 22, PTON 35 puts for $1.40

 

Business Education, Fintech, Options Trading

My trades for October 2021

Per popular request, I’ll be posting my monthly trades hereafter. Though the request was for weekly posts, I’ll start with monthly for now. I traded only naked puts last month and here they are. Guess how much capital I need if all the puts are exercised? Guess how much profit I would make if none is exercised?

Transactions

Sold 10, Jan 22, FAS 65 puts for $2.22

Sold 10, Jan 22, TQQQ 60 puts for $1.70

Sold 5, Jan 22 TQQQ 65 puts for $2.05

Sold 5, Jan 22 TQQQ 70 puts for $1.65

Sold 5, Jan 22 TQQQ 70 puts for $1.34

Any idea why Jan 22 TQQQ 70 puts were sold at different prices?

Business Education, Fintech, Options Trading

Investing in SPAC is not for everybody. Tread carefully!

I said in the class I will explain how options differ from SPAC. Here it is.

SPAC (Special Purpose Acquisition Company) is a shell corporation with no current business operation but has identified/is identifying potential targets for acquisition/merger. Upon completing the M/A, the SPAC goes public and those who invested in the SPAC get IPO shares allotted by the company. Whereas options are contracts between two parties (the company is not involved) either to buy or sell shares at a particular price within a specific period. The shared are moved from one investor to another if the options are exercised. SPAC issue warrants to the investors to begin with. To read more about SPAC click on the image below.


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CEO, Fintech, Options Trading, Private Equity

Can options trading influence valuation? Looks so, just as we discussed in PE class

Remember our discussion on how call and put volumes are used by some investors to measure sentiments? Investors who buy ‘out-of-the-money’ call options anticipate the underlying stock price to spike. Recenly Softbank bought $4B worth call options on its holdings AMZN and MSFT. Many investor interpret this move as a buy signal on these equities and this may have led to spike in prices. This ends up escalating the valuation of these companies even though the underlying business models don’t justify these levels of valuation. Click on the image below to read an interesting article on this topic.


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