It was another wild week in the market. Let's wrap it up with some portfolio maintenance and general thoughts about how we made out.
First, congrats to everyone who hit big with SoundHound.
These outlier trades are actually common with our system. And we need them because they pay for all the zeros.
If you let it ride, and you are up 25x today, fantastic.
If you didn’t. Pay attention and learn from this. It is so important to let our winners run. This is why we sell the double so religiously. It puts our minds at ease, and with the comfort of knowing we can’t lose, we are more likely to let positions go.
In the case of SOUN, the calls were cheap, so we could own more than just 2 contracts. Larger position sizes like this make our job easier. Use it to your advantage and scale out on strength in situations like this.
If we can consistently sell doubles, we should be able to hit big trades like this often. Especially in rally phases like the one we are in now.
With a roughly 50% double rate this year, we’re accomplishing this.
Another thing to keep in mind with SOUN is that the first calls we bought did not work. When they were nearing expiry, we still loved the setup, so we simply bought more calls further out. Thank god we did. We’re going to do more of this in the future.
I’m more concerned with what our next big winner will be. And I think Sea Limited is a good candidate.
With our $SE 12/20 $120 calls slightly out-of-the-money with expiration two weeks away, I’m rolling this position. The stock is coiling in a high and tight flag following a massive base breakout and breakaway gap on last month's earnings report.
I think a big leg up is coming. I’m selling my calls for about $2 today and buying the 2/21 $135 calls for about $2.55.
Some situations we are watching for next week are adding to our silver exposure, buying the South Korea selloff with CPNG calls, and buying this potential hook in Sphere Entertainment.
I’m also a big fan of the coil in HIMS, looking pretty at new ATHs. I tried to get into the 1/17 $40 calls for $2 today, but didn’t get the fill.
I’m also thinking about adding puts to the mix for the first time and fading these epic, yet parabolic rallies in the major airlines. I put some starter shorts on DAL & UAL today. We’ll follow up on these on Monday and maybe put on some Breakout Multiplier style trades.
I also doubled down on our ASTS calls today. I bought more of the 1/17 $35 calls for $1.
As for Square it definitely ran away. We’re not chasing speculative growth here. We’re going to continue to let the setups come to us. If this area of the market keeps pumping higher next week, we are positioned well for some big wins from Unity, Lovesac, and ASTS.
The positions we recently put on in China are roughly unchanged. We think we’ll get some doubles from these soon. TME looks the best for now.
