ALL Access Jun 19 VTIQ $30 calls under $2.20 UPDATE
Dear Subscriber,
First off, a hearty welcome to all the NEW All-Access members over the last week! We opened the All-Access membership to 50 on Monday and by Saturday we hit our limit. We will keep it at this level for a while to see if we can handle the added access and not mess up option trades.
Housekeeping: Your All-Access service includes access to my personal text, email, or our website chatbot with stock/trading questions (or ideas, too!). PRINT this page out TEXT (301) 412-8622 email tsmith@transformityresearch.com
May Newsletters: The TR Ultra Income Buy List and New positions hopefully out tomorrow after market close. TR May Ultra Growth out Wednesday with our update Next Normal 2022 Secular Growth/High Unit Economic favorites with many new names.
My working assumption here is that the VERY limited breadth of stocks breaking out means the consolidation from April 28-May 28 should have some profit-taking in the most overbought stocks. I do NOT feel a FOMO urge to chase our favorite Next Normal secular growth plays--especially since our Ultra Income Stocks have WAY outperformed the Nasdaq 100/S&P 500 by a mile (and average about 20% dividends right now as well, too).
VTIQ Update
With our cost basis on VTIQ's around $13-$14, VTIGU under $22, and VTIQW warrants around $7, we added the $30 June 19 call options under $2.20 on Wednesday and they closed at $2.70 bid by EOD Friday (as a few All-Access members texted "OK--just paid for AA membership for the 5th time!).
IF you do not have a VTIQ position, the VTIQ warrants (VTIQW) under $10 and call options are I think are the highest pay/lowest risk ways to play the price melt-up I expect IF WE CAN CLEAR $27 close on above-average volume Tuesday or Wednesday.
PS on Trading VTIQ: As someone who has traded tens of thousands of VTIQ shares in our managed accounts, it usually opens on the first day of trading UP in the first 5-10 minutes. What that means is some snot nose GenZ/Millenials are day trading the shares on their cellphones with their Robinhood app with MARKET orders buy stop orders that ALL HIT at the open. God the market makers love their ignorance!
My advice is to LET THE first rush up happen and then buy the pullback. We got some of the $30 Call options at $1.90 on the pullback on Wednesday (and based on texts a few of you all did too!)
The S&P 500 Futures are trading strongly higher this evening--fingers crossed!
Our thesis here is trading muscle memory: short term traders REMEMBER missing the $25-$35 melt-up mid-May and most of the bag holders (people who opened positions $30 or higher) are cleaned out.
Action To Take: BUY June 19 CALL Options up to $3.20 with an $8-10 Target and $2 SELL STOP
Next Action to Take: SELL June $25 PUT Options for $5 or better IF WE CLOSE ABOVE $27 tomorrow.
NOTE: IF the sold put option position goes to 25% higher value (meaning it DROPS 25% in value--its a PUT option, remember?) we will install a rolling sell stop to protect those profits.
Here is the VTIQ chart and the support and resistance --in after hours the VTIQ closed at 25.90
To repeat what I said last week, in the options trading world, a "lottery ticket" is usually buying an "out of the money" option with a week or less to go.
With A) the Nikola Motors/VTIQ IPO merger now set for the first week of June (June 3 Vote by VTIQ Board for Merger Approval) and merger complete a day or two after (where VTIQ shares and warrants are automatically converted to NKLA and NKLAW shares and ticker) and B) the extreme volatility in VTIQ/NKLA shares,
It is reasonable speculation to buy the $30 June 19 option and get significantly better odds than a real lottery ticket.
The KEY here in this trade is you are ONLY USING $$$ that you don't care if they go to ZERO.
The bet is the millennial investor (aka the "I buy stocks on my Robinhood app") fervor surrounds VTIQ comes back with the headlines and post-merger hoopla (CNBC FBN CNN Money Yahoo Finance WSJ etc.). I use this kind of call option as what I call my regret avoidance trade aka "DOH--why did I not buy some cheap option knowing what I know about X!"
Good luck!
Here is my link to the business merger deck--You MUST read this amazing deck which is no longer available to the public (but I got one anyway--thanks to our insider).
Here is the video analyst introduction
Here is the first announcement on CNBC of the merger
Here is the Fox Business interview (you gotta let the ad run)
Here is the press release on the merger and company.
Here are just a few of the 413 Articles on Nikola.