USA Stocks discussion - Part 3

[elvintay07]

Current Stock God Tom Lee said IWM will outperform S&P by 100% for next few years

He is like the next Peter Lynch. Most Wall Street clowns got it wrong. Heng I follow Tom

 

[westtraveller]

Saw it jump but on work travel. Might sell tonight - now it’s like a couple nice dinners. Thanks again for gai xiao

Sold, for a quick $1000 gain. Thanks again haha

 

[stanlawj]

BLS may be forced to report massive job losses starting in Feb 2025.

 

[Evil_Boss]

hey guys, i have a question.

I have bought a number of calls with a strike of 15,17,18 and expiry 7 months away.

$15 calls are ITM
$17 and $18 are OTM but around 10% away from ITM and should reach it soon

the calls are in the green.

i got good faith in the security, but will not have the capital to exercise the options, but i think the stock will rise for sure in the long run

should i

A) sell away and buy shares and hold long term
B) hold it to March Q4 earnings; it will be left with around 3-4 months and my concern is that theta will really start to kick in, or will i still be safe?
C) sell it away and with the profits but LEAPS that are expiring in 2027, but since the price has gone up i will have to buy less contracts (eg, less exposure for more time)

 

[aurvandil]

hey guys, i have a question.

I have bought a number of calls with a strike of 15,17,18 and expiry 7 months away.

$15 calls are ITM
$17 and $18 are OTM but around 10% away from ITM and should reach it soon

the calls are in the green.

i got good faith in the security, but will not have the capital to exercise the options, but i think the stock will rise for sure in the long run

should i

A) sell away and buy shares and hold long term
B) hold it to March Q4 earnings; it will be left with around 3-4 months and my concern is that theta will really start to kick in, or will i still be safe?
C) sell it away and with the profits but LEAPS that are expiring in 2027, but since the price has gone up i will have to buy less contracts (eg, less exposure for more time)

You can consider selling some calls at a higher strike to convert to a call spread.

For example suppose you bought the $15 call for $1,000. Because the shares have risen, the $20 call is now trading at $1,000. You can sell the $20 call and recover your capital. You then have a risk free chance of earning $5 if the shares do go up and close above $20 at expiry.

 

[Evil_Boss]

You can consider selling some calls at a higher strike to convert to a call spread.

For example suppose you bought the $15 call for $1,000. Because the shares have risen, the $20 call is now trading at $1,000. You can sell the $20 call and recover your capital. You then have a risk free chance of earning $5 if the shares do go up and close above $20 at expiry.

bro dont confuse me further ba.i seldom buy options, that day was drunk then sold all my ETF's and yolo all my cash into the stock...

now i dunno what to do lol... is either one of the 3.

 

[aurvandil]

bro dont confuse me further ba.i seldom buy options, that day was drunk then sold all my ETF's and yolo all my cash into the stock...

now i dunno what to do lol... is either one of the 3.

If not familiar with options, safest is option 1.

 

[Evil_Boss]

If not familiar with options, safest is option 1.

okok thanks. i going to delete the app from my phone liao

 

[d5dude]

Dollar went from 52wk low to 52wk high in just a few weeks, this is some crazy ****.

 

[aurvandil]

Dollar went from 52wk low to 52wk high in just a few weeks, this is some crazy ****.

So far, everything that is coming out looks very market friendly.
I won't be surprised if we end the Trump term with the S&P knocking on 10k.

 

[stanlawj]

Dollar went from 52wk low to 52wk high in just a few weeks, this is some crazy ****.

Euro currency crashing. Eurozone is the biggest loser from Trump's policies. Makes sense to me, because their energy cost is too high, especially Germany, because of their policies.

 

[d5dude]

So far, everything that is coming out looks very market friendly.
I won't be surprised if we end the Trump term with the S&P knocking on 10k.

I'm actually getting more pessimistic about the short term, I hope Trump doesnt follow thru with his stupid tariffs on all imported goods, a trade war isnt good for anyone.

 

[d5dude]

Euro currency crashing. Eurozone is the biggest loser from Trump's policies. Makes sense to me, because their energy cost is too high, especially Germany, because of their policies.

Every currency is tanking vs the dollar, emerging market currencies got hit even harder than the euro.

 

[aurvandil]

I'm actually getting more pessimistic about the short term, I hope Trump doesnt follow thru with his stupid tariffs on all imported goods, a trade war isnt good for anyone.

I believe the tariffs will be very nuanced so as not to spark inflation. Low hanging fruit will be strategic industries China is going all in for. A 200% tariff on China EVs for example will be popular politically without sparking inflation.

The key change I believe is that they are going to close the loopholes the Chinese have been using to evade tariffs. My speculation is that instead of goods origin, the tariffs will shift to company ownership. This is to address the pervasive practice of China using geo-laundering to get around the tariffs. Using EVs as an example, the 200% tariff will apply regardless of where BYD makes the vehicle. This is because BYD is a Chinese owned company. If they along this route, they likely target selected high profile China companies which they see as not in their national interest to allow to grow to become a dominant global player.

 

[d5dude]

I believe the tariffs will be very nuanced so as not to spark inflation. Low hanging fruit will be strategic industries China is going all in for. A 200% tariff on China EVs for example will be popular politically without sparking inflation.

The key change I believe is that they are going to close the loopholes the Chinese have been using to evade tariffs. My speculation is that instead of goods origin, the tariffs will shift to company ownership. This is to address the pervasive practice of the China using geo-laundering to get around the tariffs. Using EVs as an example, the 200% tariff will apply regardless of where BYD makes the vehicle. This is because BYD is a Chinese owned company. If they along this route, they likely target selected high profile China companies which they see as not in their national interest to allow to grow to become a dominant global player.

Its not just China they are targeting, it also includes Europe.

China was already not really exporting its EVs to the US before Trump was elected due to the 100% tariff imposed by Biden so its not really relevant. What I worry about is the other goods trade with the rest of the world.

Larry Summers thinks this will not be good and I have to agree with him.

 

[aurvandil]

Its not just China they are targeting, it also includes Europe.

China was already not really exporting its EVs to the US before Trump was elected due to the 100% tariff imposed by Biden so its not really relevant. What I worry about is the other goods trade with the rest of the world.

Larry Summers thinks this will not be good and I have to agree with him.

I am not sure they will go through with Europe tariffs. Top priority appears to be China. I think they want to address the various loopholes China is using to evade the tariffs.

 

[d5dude]

I am not sure they will go through with Europe tariffs. Top priority appears to be China.

Nobody knows whats going to happen and this is why its worrying. The only certainty we have now are tax cuts so thats a positive for corporate profits, but that will definitely weigh on the deficit and interest rates are likely to be higher (negative for many sectors like housing).

 

[aurvandil]

Nobody knows whats going to happen and this is why its worrying. The only certainty we have now are tax cuts so thats a positive for corporate profits, but that will definitely weigh on the deficit and interest rates are likely to be higher (negative for many sectors like housing).

We are guided by the fact that the stock market is his KPI. Unlike Biden, he will not do anything which causes a prolonged stock market down move. If the market moves negatively in response to anything his administration rolls out, he will jump on whoever did it and get them to reverse direction. This includes Powell and the FED.

This more than anything is why I am so bullish on where market is headed.

 

[d5dude]

We are guided by the fact that the stock market is his KPI. Unlike Biden, he will not do anything which causes a prolonged stock market down move. If the market moves negatively in response to anything his administration rolls out, he will jump on whoever did it and get them to reverse direction. This includes Powell and the FED.

Thats a good point.

 

[d5dude]

Either way I'm long term bullish on US equities and will not change my allocation unless something huge like a civil war happens.