Trade Alert: Japanic Edition

There goes Tokyo. Buying when there's more blood in the streets.

Japanic Monday

We’ve got another market crash, this time sparked by the chaos in Japan, as the yen carry trade unwinds. Our general game plan here remains the same:

1. If you’re concerned about downside risk for positions you already own, consider hedging the next time we have a market bounce. As a reminder, you can download our iPhone hedging app here, or by aiming your iPhone camera at the QR code below.

1. We’ll use up days to add short positions, and down days to add long positions, when we surface compelling ideas.

I have three long trades I’ve placed so far today, on names we’ve had bullish positions on before. As I note below, I may add to this list later in the day.

Bullish Trade #1

The stock is Super Micro Computer (SMCI 0.00%↑), and the trade is a vertical spread expiring on August 9th, buying the $590 strike calls and selling the $595 strike calls for a net debit of $1.65. The max gain on 2 contracts is $670, the max loss is $330, and the break even is with SMCI at $591.65. This trade filled at $1.65.

Bullish Trade #2

The stock is Robinhood Markets (HOOD 0.00%↑), and the trade is buying the $18 strike calls expiring on December 20th for $1.8. The max gain is uncapped, the max loss is $360, and the break even is with HOOD at $19.80. This trade hasn’t filled yet. This trade never filled.

Bullish Trade #3

The stock is Robinhood Markets (HOOD 0.00%↑), and the trade is a vertical spread expiring on August 9th, buying the $17 strike calls and selling the $18 strike calls for a net debit of $0.33. The max gain on 2 contracts is $670, the max loss is $330, and the break even is with HOOD at $17.33. This trade hasn’t filled yet. This trade filled at $0.33.

Bullish Trade #4

The stock is Tesla ( TSLA 0.00%↑ ) and the trade is a vertical spread expiring on March 21st, buying the $245 strike calls and selling the $250 strike calls, for a net debit of $1.20. The max gain on 2 contracts is $1,140, the max loss is $360, and the break even is with TSLA at $246.20. This trade hasn’t filled yet. This trade never filled.

I may add more bullish trades to this post later today; if I do, I’ll send out a chat + email to notify you.

Exiting These Trades

For the SMCI and TSLA trades, I’m opening GTC orders to exit at 90% to 95% of the spreads, and I’ll lower those prices as necessary, as we approach expiration. For the HOOD trade, if we get a big enough move after earnings this week, I may sell half of the calls. Otherwise, we’ll see how these look in December.