Trade Alert: Top Names + Crypto
Imagine MicroStrategy, but with a profitable core business.
Wednesday Night’s Top Names
In Wednesday night’s top names post, I mentioned that I hadn’t gotten stopped out of any positions up to that point this week, so I wasn’t planning to buy one of this week’s top names. I added that I would look into them and see if any looked promising for an options trade for Friday.
After looking into them, there’s one I want to buy, despite not being stopped out of any stocks in our core strategy this week. I also want to place an options trade on it.
This is a company that appears to have adopted a version of MicroStrategy’s (MSTR 0.00%↑). Here’ is MicroStrategy CEO Michael Saylor pitching his bitcoin balance sheet strategy to MicroSoft (MSFT 0.00%↑) recently.
Unlike MicroStrategy, though, today’s top names company actually has a profitable core business, having beat on both top and bottom lines last quarter.
My plan today is to buy shares of the company and also place an options trade on it expiring after its next earnings release. If we’re right on the options trade, our maximum profit will be about 230%. If we’re wrong, we’ll lose as much as 100%.
Details below.
Today’s Top Names Trades
The company is Semler Scientific (SMLR 0.00%↑) and our trades are:
Buying the stock at about $51 per share. This trade filled at $51.37.
A vertical spread expiring on April 17th, 2025, buying the $55 strike calls and selling the $60 strike calls, for a net debit of $1.50. The max gain on 3 contracts is $1,080, the max loss is $450, and the break even is with SMLR at $56.50. This trade filled at $1.50.
Today’s Bonus Trade
In a post earlier this week, I said I would buy more of Sana Biotechnology (SANA -12.27%↓) if it pulled back in the near future. It pulled back today, so I bought more at $3.84. When it spiked to about $7.50 after hours earlier this week, I was hoping to buy it at $4 or $4.50 the next day, so now my average price is below $4.50.
Exiting These Trades
For the SMLR shares, I’ll set a trailing stop of about 20%; for the vertical spread, I’ll open a GTC order to exit at about $4.75, and lower that price, if necessary, as we approach expiration.
For the SANA shares, I’m not going to set a trailing stop. I’m just going to follow that stock and hold it until it gets bought out or it looks like the thesis is invalidated. You can set a trailing stop on it if you like, but it looks pretty volatile