To The Moon

August has been a month of mixed fortunes for the market, and my trading strategies have reflected this volatility. Recently, I shared my views on $PDD Holdings Inc(PDD)$ and $Dell Technologies Inc.(DELL)$. I also took options trades for these 2 companies. Let's delve into the performance of my trades on PDD and DELL, along with insights for future opportunities.

PDD Daily Chart

My stance of a short term bounce on PDD was validated by a short-term price increase following the huge drop after earnings report. However, I chose to take profits as the implied volatility (IV) began to decline, indicating a potential loss of momentum. The decision to exit at a profit was a calculated move to secure gains and avoid potential downside risks.

While I'm cautiously bearish about PDD's long-term prospects, the near-term outlook remains uncertain. A break above the psychological level of 100 could signal further upside potential towards 105. However, if the price falls below 88, I'll be looking for another potential bounce opportunity at the 74-84 support levels.

DELL Daily Chart

My options trade on DELL proved to be profitable, thanks to the implied volatility crush that occurred after the earnings report. Selling puts at a strike price of 97 allowed me to capture the premium with a high probability. For instance, the price rised after earnings and caused the options price to fall rapidly. Even if the stock price falls after earnings, there is a low chance that the stock price will fall below 97, so I would capture the premium as well if the price stays above 97. This strategy effectively mitigated downside risk while offering potential upside. Of course, there is still a chance the price falls below 97 and I have to exercise the options at a loss, so this is the risk I was taking. Always know the risk involved before making a trade.

The market remains volatile, and September is often a month of uncertainty. It's essential to stay informed about macroeconomic factors, corporate news, and technical indicators to make informed trading decisions.

I'll continue to monitor the market closely and identify potential opportunities for both PDD and DELL. However, I'll maintain a disciplined approach, focusing on risk management and maximizing returns.

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Disclaimer: This is a personal trading recap and does not constitute financial advice. Always conduct your own research and consider your risk tolerance before making any investment decisions.