Forum Topics SOL SOL Bear Case

Pinned straw:

Added 5 months ago

chart Update Fri 26th July

I would love to own this stock, however I must wait quiet some time. I believe we are already in a large C wave down with w(ii) up completing nowish. This then allows me to plot 28.93 ish as the next major pause in its journey for a large w(iii) down. Im not placing waves (iv) or (v) yet until I see how the stochastics looks when it reachs the bottom of w(iii), although it should then bounce for a w(iv) and then back down to 25.05ish for w(v). So now I wait.

Ignore the time frames as plotting Fibonacci numbers doesnt take into account how fast or slow this could happen.

3ea5a4cf30a182c360ac9d778cf4b13955fe29.png

RhinoInvestor
Added 5 months ago

@Saiton I hope you are somewhat right.

I’ve got some September 19 $34 covered calls (currently in the money) coming up soon and I’m hoping not to get exercised or have to roll my position. I do think that the SOL price has become pretty fully valued right now. I note there is a 51c per share dividend scheduled for November and an earnings call scheduled for 26 September as well (but neither of those events come in time as a catalyst to help my options expire nicely out of the money allowing me to keep the 63c premium when I originally sold them).

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wishkey
Added 5 months ago

Curious what the thesis is here that would warrant covered calls...

A lot of people think that covering a call is a sensible way to reduce risk. Actually, it just converts your short call (infinite potential loss) to a short put (significant, but not infinite potential loss). It's a net long delta / short vega position, which will result in a profit if the either a) the stock price goes up (your long stocks will go up more than your short call goes down) or if volatility remains low. You could be looking at significant losses if the stock prices drops or volatility is high...

Anyway, my two cents: unless your thesis is specifically about volatility being mispriced, you're better off steering clear of options (particularly short options) altogether. They are a very complex product and the options market-makers hold a significant informational advantage, plus you have to cross the spread to get in, making it very hard to win in the long run.

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