Updated: Jan 24, 2021
I do live trading on my Twitter and would like to post the real option trades that I am doing, and what my current watchlist is. Follow along on my journey to $1 million.
A lot happened last week. Speaker of the House, Nancy Pelosi, bought like a true Wall Street Better and Game Stop, $GME, went through a unique gamma squeeze. It is hard not to get caught up in the FOMO of both of those things, so let us develop a strategy where we can partake without losing our 401ks.
YouTube Video Link: HERE
Hon. Nancy Pelosi's Options Plays
Over on congresstrading.com we can see that Nancy Pelosi, CA12, on the 22nd of December, 2020, made some purchases that totaled up to a whopping $1,750,000- $3,500,000. (Where does she get that kind of money?) The two most interesting of which are $TSLA and $AAPL. What does she know that we don't? Let us take a look one by one.
$TSLA - Speaker Pelosi purchased 25 call options with a strike price of $500 and an expiration date of 3/18/22. This is a very expensive, deep in the money (ITM), LEAPS. Currently on WeBull , this would cost $1,068,500. Nancy is already in the green; what great foresight.
$AAPL - She then purchased 100 call options with a strike of $100 and an expiration date of 1/21/22. Another ITM LEAPS, but not as deep. This one is currently going for $446,000 on WeBull , and I suspect since Apple is up $8 since she bought it, that she is also in the green here too. Great job Nancy!
$DIS - Hon. Nancy went on to buy 100 calls with a strike of $100 with an expiration date of 1/21/22. She sure does love LEAPS - I DO TOO!! Currently on Webull, you would need $759,000 to purchase it. Since she purchased this, $DIS is down $1. She has probably lost a chunk of her principle due mostly to time decay.
Keep in mind these three so far have incredibly high Deltas; in the 90s. She is essentially buying boat loads of shares, but utilizing LEAPS options contracts in order to use less capital. Use the $DIS paly for an example. 100 contracts X 100 shares in a contract = 10,000 shares. Currently 10k shares of $DIS costs $1.7 million, but she has bought this for only around $7-800k (I suspect) - saving herself $1 million dollars.
$AB - Alliance Bernstein (nothing to do with the bears) is a banking and investment service company. I'm not sure whether or not this is Speaker Nancy's financial advisory company. On the 22nd of December, she bought 20,000 shares for around $668,000 - $33.4/share. As of Friday's close, $AB is trading for $36.03. Nice one Nance, although you should have bought this at the covid low of $13. Now it is all the way back to pre-covid levels. I wonder if they cut her a deal on their when giving her the advice to YOLO into TSLA call options?
Adding to Watchlist
$AAPL - This week Apple is approaching earnings. The data should come out on the 27th, and we expect it to be positive. With Apple continuing to be a leader in mini computers and phones, and partnered with Hyundai to produce an electric vehicle, this is a safe play. Buy the rumor, or hold though earnings, I expect this will be positive mid to long term. Not to mention Nancy Pelosi is long Apple. I like riding commons up to $160 and reevaluating or some LEAPS.
Target Price: $160
Entry: <$134 is a strong buy
Timeframe: 2-4 months
$TSLA - This won't come as a surprise to anyone. With Tesla up 1000% this year and still chugging along, who is a bear anymore? Earnings this week, and it should see a big jump. China sales still high. All of this coupled with the Biden administration's stance on zero emissions and clean energy. The future of vehicles and batteries literally goes though Tesla. I like commons, or high delta LEAPS. With earning week here, I'm not sure if it will dip on the lead up to the announcement.
Target Price: $1200
Timeframe: 2-4 months
$DIS - Disney earnings is coming up Feb 11 and for the past two quarter has beat expectations by a lot. With people staying indoors for covid and a shift to subscription with Disney+, this is an easy buy. I will not jump in to early but will wait for a clear pull back (try to get a better deal than Nancy). LEAPS it is for me.
Target Price: $205
Timeframe: 3-5 months
$F - Last week Ford has come across some long needed attention. Momentum is currently building up from the new electric 300 mile range Mustang. Ford has seen the writing on the wall and is ramping up their EV R&D. The future is electric and any company innovating and under going a complete change in the industry is on my watchlist. Currently $F is cheap, and if you can pick up a few hundred shares, the premiums for selling covered calls is interesting. I should also mention that Webull is giving away some shares of $F. Sign up for 4 free, random shares.
Target Price: $13
Timeframe: 3-5 months
$BB - Lately Blackberry has garnered a lot of attention on the popular subreddit, WSB (Wall Street Bets). It is reaching levels not seen since 2018 and seems to have the momentum to continue. I am not a gambling man, but any stock that is trending on WSB, I'll be watching closely. There is nothing wrong with playing the hype. I believe that putting a couple hundred dollars, or thousand, on some OTM short term calls. Don't put more than you can lose. Risk Warning.
Target Price: $15.50
Timeframe: 1-2 Weeks
$GME - GameStop won't need much introduction. Everyone that is paying attention has heard of this very unique run up it has had. Let me clarify what is going on. There are more shares of $GME being shorted than actually exist. If a short-seller wants to close his position, they would have to buy shares first. That would inadvertently drive up the price. Therefore it would be a domino effect to buy shares in order to close your short, when the price is rising faster than you can buy to close your short. That is a short squeeze, which is not what happened on Friday. In fact, it was a gamma squeeze, which is when call options are being bought very fast and market makers are needing to buy huge amounts of shares to hedge, in turn pushing the price even higher. My opinion is that a short squeeze is extremely likely to happen. Risk Warning. Like $BB, put a couple hundred, or thousand, something you don't mind losing. I'm interested in a short term call option OTM. No TA is needed for this one, as anything can happen. Tread super carefully.
Target Price: ?
Timeframe: 1-2 Weeks
Note: Risk (1 out of 5) is my opinion of how risky the stock and these plays are; 1 being the lowest and 5 is the highest.
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