To The Moon

Let's explore an Options Strategy known as a Bullish Synthetic spread, which allows an options trader to control 100 shares for less capital compared to buying 100 shares of a stock. Options chain for AAPL expiring on Apr 19 Suppose one is bullish on Apple, and Apple is currently trading at $181 (as of the time of this writing). If you want to buy 100 shares, the capital required (not including commissions) is $181 x 100 = $18,100. For every $1 rise in the stock of Apple, the gain on the position is $100, and vice versa. Let's explore a strategy that allows you to control 100 shares of Apple for less capital, and that is done by a Bullish Synthetic spread, by entering a Call option on a buy leg, and a Put option on a sell leg. First select an options expiration, in which I have selected Ap

Magnificent Seven-ex Tesla has driven the S&P 500 to close at 1.47% year-to-date after the first three weeks of 2024. Expecting the group to push higher this year due to strong balance sheets and their revenue growth (except Tesla) will be less immune to the effects in the event the Fed does not hike the 6 rate cuts the market is pricing in. As Tesla is primarily selling cars, if interest rates remain higher for longer, revenues will remain pressured this year, coupled with intense competition from Chinese EV makers. Year-to-Date Magnificent Seven gain (loss) Nvidia +20.13% Meta +6.26% Alphabet +4.79% Microsoft +4.74% Amazon +2.24% Apple -0.50% Tesla -14.6% S&P 500 +1.47% Nasdaq Composite +2.0% Dow Jones +0.46% $Microsoft(MSFT)$ &nbs

A recent article on SCMP revealed that pessimism in Chinese stocks has been the highest amongst foreign investors.  The recent fund managers survey by Bank of America Global Research found that fund managers are now more net short on Chinese equities compared to the previous three months, and also are more bullish on the Japanese market.  BofA Global Research FMS survey Indeed the Chinese CSI 300 index, which comprises of 300 top companies listed on Shanghai & Shenzhen Exchanges is now down 4.5% in 2024. Over the past 6 months, it is down 14.3%, and past one year down 20.7% Stocks like Alibaba, perhaps a hot favourite among investors here have suffered greatly. Year-to-date Baba is down 12.2%, after paring back some losses on Friday afternoon due to monthly options expiratio

Last Friday's sudden draft rules on gaming hit Tencent & NetEase hard, and in the Friday's trading session on the US market TCEHY fell 9.8%, while NTES fell 16%. Bilibili fell around 4.9%. According to a Bloomberg report, that had wiped out $80 billion in Tencent, NetEase and Bilibili combine market value on the Hong Kong and China exchanges. The draft rules are designed to protect users from spending too much time and money on online gaming. Rewards cannot be given for daily logins, first-time recharge, and continuous recharge. All online games must set user recharge limits and announce them in service rules. In addition to that, pop up warnings should be issued for irrational consumption behaviour. Also also include caps on the amount each player can spend within a game. Online game

Alibaba trades at a low multiple of 10 times forward earnings, compared to Amazon that trades at 57 times for PE. BABA valuations (source Seeking Alpha) AMZN valuations  If we were to compare the price alone, Alibaba is trading around $75, which is around the price back in June 2016. Looking at their financials, for FY ending March 2016, basic EPS was $4.50 per share, compared to today’s Trailing Twelve Month EPS of $7.05. At the end of FY 2016, total revenues was $15.67 billion, gross profit of $10.34 billion and operating income of $$4.5 billion. Comparing to today’s (trailing twelve month) revenue of $125.31 billion, gross profit of $47.28 billion and operating income of $18.37 billion. So that creates this huge doubt that many Baba bagholders have in their minds, why isn’t the sh

I hope everyone here has been having an amazing year this year. Heading into the year, the economists were all expecting a recession, that the market was going to crash further beyond the closing low 3,577.04 made on October 12, 2022. As the year continued, especially towards the end of March when the MA 200 started sloping upwards which signifies a long term uptrend, most bears were still bearish and they insisted that it was a bear market rally. The AI theme started to play out around late May after Nvidia reported earnings and the stock jumped 24% after revenue surprise of 10% and earnings surprise of 18%. Again the bears were calling that AI is a bubble, and the gains driven by the Magnificent Seven of Apple, Microsoft, Nvidia, Meta, Alphabet, Amazon & Tesla was what was mainly dr

Definitely richer than before Covid in 2019! Being able to capitalise on stocks like $Meta Platforms, Inc.(META)$ and $Microsoft(MSFT)$ in 2022 and early 2023 when they were unloved helped me to start realising the importance of investor psychology, which is to be greedy when others are fearful.

Let me share some basic indicators which I use to look at my charts on a daily basis. The first is using SMA 50, 100, 150, 200 and together with EMA 20 & 40. When the EMA 20 is above EMA 40, the price action is on short term uptrend. When SMA 50 above 150, implies medium term uptrend. Lastly when price is above SMA 200, and sloping upwards implies long term uptrend. One easy way to look for resistance and support is to check how the price rebound previously. In Apple's daily chart, it rebounded or tested the 200 SMA, and usually a rebound off the 200 SMA is very bullish price action reversal. This is because the market maker hunt for stop losses below the 200 SMA and make those traders who set their stop loss there to close and exit their trades, and subsequently the stock price actio

A hypothetical portfolio Suppose if I had only US$10,000 to invest, what stocks would I pick? Well we could just easily say that we choose only the Magnificent Seven (M7), made up of Apple, Microsoft, Meta, Nvidia, Alphabet, Amazon & Tesla. However that would mean that our stocks are heavily concentrated in technology, communication services and consumer discretionary and would result in a highly unbalanced portfolio that might leave us to quite some downside risk should the market crash, as most of these stocks have similar correlations in price movements. Let’s say we are only allowed to pick 2 of the M7, so I would choose Alphabet & Amazon. Alphabet is the parent company of Google, YouTube and are used by millions, if not billions worldwide. Alphabet’s EPS is expected to grow at

Especially delta as its the probability that the trade will end up in the money by expiration. Buying options out of the money is like going to a casino. Selling options is a higher win rate provided you can manage your risk