November 6, 2024
LYFT Earnings and Positions Update
LYFT will report earnings today after the close. Headed into the event, LYFT stock is trading at 14.25, which is $1.75 above our short strike price (good/totally fine).
I am going to hold my position through earnings, as the market is strong, and LYFT stock has been improving.
LYFT - With the stock trading at 14.25, the options market is pricing in a move of $2 this week, or 12.25 to the downside and 16.25 to the upside.
Open interest is skewed bullish on a ratio of 1.8:1 call vs. put.
Skew is pricing in typical downside risk and upside interest.
Moving on …
The market is flying higher today following the election. This is good for most of our portfolio as PLTR/WMT/ORCL are at new 52-week highs, and even HOOD, which fell on earnings, is now back at its old highs.
What is NOT working is RKT, which has been hurt by rising interest rates the last month, and this trend in the TLT declining is continuing in a big way today (TLT down/RKT down is the playbook).
I want to be patient with this RKT position, but that is becoming increasingly difficult …
November 5, 2024
Palantir (PLTR) Earnings
Palantir (PLTR) reported earnings last night that smashed expectations. In reaction to these numbers, PLTR stock is trading higher by 22.5% and at a new 52-week high at 50.
This strong stock reaction to earnings is a great development for our PLTR position, which is now at a potential profit of approximately 440%.
Of note, into this big move higher option activity remains very bullish, and I am going to continue to hold my position.
Finally, we have two more earnings this week via LYFT (Wednesday) and U(Thursday).
November 4, 2024
Weekly Update
Palantir (PLTR) Earnings and Election Preview
Before I dive into my election preview, I first wanted to address Palantir (PLTR) earnings as the company will report its quarterly results today after the close.
We are holding the last piece of our PLTR position, which is now at a potential profit of approximately 265%. I am going to hold my position through earnings as the stock looks great and option activity has been steadily bullish for months.
PLTR - With the stock trading at 42, the options market is pricing in a move of $5 this week, or 37 to the downside and 47 to the upside.
Open interest is skewed bullish on a ratio of 1.5:1 call vs. put.
Skew is pricing in extreme downside risk and upside interest.
Moving on …
As I’ve written before, historically the stock market does not care which party wins the presidency, and that is illustrated below graphically, and then by the data:
The S&P 500 has achieved a median compound annual growth rate of 9.3% during Democratic presidencies and 10.2% during Republican presidencies.
Essentially, the market does not care who wins the election, it just wants it to come to a conclusion. Here is data that illustrates that the market generally performs well after the election via Bloomberg:
During the last eight elections, the S&P 500 increased an average 6.6% in the six months after Election Day, compared with a gain of 1.5% six months prior.
With that in mind, my general thought is that unless something goes haywire Tuesday/Wednesday, or if for some reason the election results get drawn out much more than a week, big picture, in a couple weeks the market will be more focused on earnings/the Fed/whatever is the next big story.
And in fact, traders are seemingly not too worried about the election as the options market is only pricing in a 2% move between now and Wednesday (the S&P 500 has only moved 2% or more 25% of the time on election days since 1928).
With all that being said, here are some ways to get bullish or bearish exposure to the market moving higher or lower (please note, the prices of these calls/puts will be moving, so don’t get too tied to those prices if you want exposure):
Bullish
Buy the SPY November 572 Calls (exp. 11/8) for $8 (if the SPY goes down, this call will go to zero in the blink of an eye Wednesday)
Buy the QQQ November 489 Calls (exp. 11/8) for $8 (if the QQQ goes down, this call will go to zero in the blink of an eye Wednesday)
Bearish
Buy the SPY November 572 Puts (exp. 11/8) for $8 (if the SPY goes up, this put will go to zero in the blink of an eye Wednesday)
Buy the QQQ November 489 Puts (exp. 11/8) for $8 (if the QQQ goes up, this put will go to zero in the blink of an eye Wednesday)
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