Posted on February 1, 2021
Because if you are, Facebook and Twitter gonna gitcha!
We at A Jew and His Money, on the other hand, will aid and abet any and all efforts to stuff oneself silly at the expense of haughty hedge fund managers and corporate banking loudmouths with whom we share (almost) nothing in common.
But first, we’ve got one to close for a full plate of profits.
It’s our EXPE initiative, originally launched on November 23rd, the details of which can be found here.
In short, we’re holding the EXPE March 19th 130 synthetic short, along with a debit of $1.56 on the side.
And today, the long 130 PUT goes for $14.35 and the short 130 CALL trades at $8.35.
Sell the former and buy back the latter and you walk with a net $4.44 on $1.56 spent.
And that’s a very hefty 284%.
We’d call that a brilliant day at bat.
Today’s action is like this –
We’re directing beanballs at WIX (NASDAQ:WIX) and looking for a knockout.
WIX is the free website company that’s never earned a nickel, but whose stock has done nothing but rise since her IPO in 2013.
Consider the fundamentals –
Which brings us to the charts.
Have a look here –
Technically, we’re looking at –
Now have a peek at the weekly –
The weekly technicals show…
WIX will have to come clean with Q4 earnings on Wednesday, February 17, at which point we expect the ground to open and a wailing of sirens to herald the swallowing of WIX like a TWIX.
Our trade goes like this –
A Jew and His Money recommends you buy the WIX March 19th 230 PUT for $14.90 and sell the WIX March 19th 200 PUT for $3.40. Total debit on the trade is $11.50.
Rationale: Our trade is geared for the short term and is therefore more speculative in nature.
We’ve chosen the shorter time horizon because the triangle pattern is already six months old and doesn’t have a great deal of space remaining to tighten. We therefore believe a break is imminent, and seven weeks (before expiry) should suffice.
Separately, we note that options on WIX are priced for a tumble. That is, all short CALL spreads, regardless of expiry, offer a negative premium – meaning the market will not allow investors to sell premium safely, only via naked CALLs – a sure enough sign there’s little to no upside remaining.
Maximum gain on the trade is $18.50 (difference between strikes less initial premium).
Maximum loss is $11.50 (initial premium).
Breakeven arrives at WIX $218.50.
With kind regards,
Hugh L. O’Haynew