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might be also due to the release of Nancy Pelosi’s dump of 5M-35M stocks (which compounded with Berkshire’s dump and the latest China sales and ratings being lowered) that people got nervous and sold a lot. In that case – should we factor in those things as well?
https://www.quiverquant.com/congresstrading/trade/House-P000197-191
No. Not even a little. I’ve seen that game play out so many times. Apple is already a set machine. It doesn’t grow much. But the massive cash flows and earnings is what drives it. The company is on repeat high levels of income. It’s not a massive value play. These same analysts will upgrade it in a few months when Apple is running.
Order filled at 3.15!
yes the concern is the 200 MA and it seems to have gone down 25% after reaching highs in 2021 Q4 or 2022 Q1 before eventually bouncing back a lot.
So back then, the selling was driven by the start of the bear market. That was market-wide selling. The QQQ fell from $408 down to $300 and then eventually down to $250. That’s a 38.72% decline in the NASDAQ-100 (QQQ). You have to place the past sell-offs within context.
We could see something just like that here. That’s why we’ll hedge on the bounce. It’s probably less likely. But it’s why we hedge on the near-term rebound.
See 12:35 pm update on Nvidia.
With NFLX reporting tonight, do you think we missed that train? We seemed very close to getting on board. Are you hoping for a small dissapointment?
You’re crushing it Sam! The app screenshots look awesome and I really like how it’s organized. Pumped for the API and push notifications. Thanks for working on all this.
Loving all the analysis and education, Sam!
One question I have is how you determine the would-be prices/profits of options? The profit for expired spreads makes obvious sense but how about the other instances?
For example, you wrote
“For the Targaryen trade, the spread we’re targeting in Apple is the April $230 – $240 call-spread at around $3.40 a share. If Apple rebound to $240 at ANY point in time between now and April, that spread rises to $6.60 a contract.”
How is the calculation from $3.40 to $6.60 made here? Is there a formula we can use to determine approximate option prices depending on movement of stock price and days to expiration?
Thank you!
This calculator does it all, including spreads.
https://www.optionsprofitcalculator.com/calculator/long-call.html
See the option calculator that NeverGonnaLetYouDown posted below. That’s a quick and easy way to forecast option prices. Also, you can look the spread is priced in the money by looking at in the money spreads for the same expiration. For example, the Apple $210-$220 call-spread traded at $6.60 yesterday. That spread is just in the money. We probably see the same for the $230-$240 when it goes just in the money. Even higher. As we get closer to expiration, in the money spreads go up in value. So the same spread in the money 1 month from now is worth more than it is today.
NVDA surging this morning—is this the start of the new rally or just a bump fron Trumps AI plan announcement?
Hard to say. Nvidia has to breakout above $153. Once that happens, it drastically increases the probability of a run to $170. For now, it’s getting overbought and it could easily begin another oversold cycle. It’s unclear at the moment.