Transcription
SoFi earnings are tomorrow morning. Robin Hood earnings are on Wednesday. I'm going to talk about exactly what I did with my positions in the portfolio. And I'm even going to show you exactly why I actually reduced my Robin Hood position going into earnings. I'm definitely a little bit more cautious and I'm going to talk about exactly why that is. But let's go ahead and jump into it. Remember, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary.
Now, if we take a look at the portfolio, we hit another new all-time high in the portfolio. Um, obviously the markets are trending upwards right now and the portfolio does benefit from that. But if you want to see me hit my 8 figure goal in the portfolio and you're not subscribed yet, please subscribe down below and please hit the thumbs up button as I would really appreciate that if you got any value out of this video. But let's go ahead and dive into it. Also, if you do want my free trade idea of the week, I'm giving those away on my Instagram and my free newsletter down below. So, make sure to be subscribed to both. Also, if you want to work directly with me and 270 other high-level investors and traders, go ahead and see the top of the description. When you click that, you're going to go over to my website, which is Options Trading University, and you could watch the free training and even watch some of our client testimonials here that I upload on a weekly basis. And you could book a call with me or one of my team members. So, let's go ahead and jump into it.
Now, big news obviously over the weekend, Trump strikes a deal with the EU as far as tariffs go. So, that caused the markets to definitely, um, you know, have a little bit less fear going into this week into the FOMC interest rate Fed decision as well as the earnings. Okay, so it says even with high tariffs, Trump's trade war suddenly is starting to look not so scary on Wall Street. And we already kind of knew that the market was already pricing that in with this rally. Um, if we look at the interest rates, nothing really has changed there on the CME Fed Watch tool. Interest rate cuts, it's looking like we're going to get one in October and potentially even December of this year and then a few more next year. So that is looking good as far as the markets go, as far as businesses and consumers being able to borrow at cheaper rates and also when businesses and consumers borrow at cheaper rates and the government borrows as well, right? More money is printed and that helps the crypto industry and the two stocks we're going to talk about today, Robin Hood and SoFi. So this is a great benefit going into earnings and thinking about these stocks long-term.
But first, we're going to take a look at the markets. I want to talk about why I'm adjusting my position sizing, why I'm, you know, why I made the adjustments that I'm going to show you today, the exact adjustments in the portfolio. Um, but again, today market hit another new all-time high. It hit a new all-time high on Friday and it just seems to be melting upwards at a very steady rate here. As I said, 580 is definitely not out of the cards, right? If we look from here, okay, that would be about a, you know, 2% gain from here. All right, so it's not far-fetched to see QQQ hit somewhere between the 580 and 590 area off of good earnings, Meta, Microsoft, Robin Hood, Apple, Amazon this week, right? And then the FOMC Fed rate decision on Wednesday and GDP numbers on Wednesday, right? Those could all be catalysts for kind of a gap up situation and potentially, um, some profit taking from there. Okay, so you just have to be aware of that where we are at on the RSI. We're officially overbought on the RSI. Um, you know, volume is a little bit low and it could be higher after the Fed decision. But if we look at VIX, we hit 15.04. Okay, this is where I start getting cautious like I talked about last Friday. All right, last Friday we were in the 14s and that's when I was extremely cautious, but we're pretty much right there as well. I have a lot of people asking me on my Instagram, hey, when should I get into LEAPS options? What are good LEAPS options plays? And I don't believe LEAPS options are a good idea right now because the VIX can spike at any moment, right? Sure, the VIX could go down to 14, could go down to 13, could go down to 12, right? But we never know at this point when what little piece of news is going to cause the market to flush and we get a nice VIX spike. Maybe QQQ heads down to this area that we talked about, maybe down to the 550 area, which would be a, you know, a pretty decent pullback, it would be about a 3%. But I believe that, you know, if we gap up if on good news, good earnings and then we see profit taking, I think we will have that profit taking will be get kind of momentum on the downside potentially for you know, a 5% pullback. Okay, so if we kind of move this up here from here, right, that would kind of fall in line with this 550 area. All right, so that's kind of the target on QQQ as far as a pullback goes. It's probably not going to be that deep. Worst case scenario might be, you know, 7% right below the lower Bollinger band, uh, maybe in the 540 area and I think that'll probably get bought up quick. Okay, so that's kind of the downside scenario. Upside scenario is we gap up on good earnings and all around good news. Okay. Um, but eventually the market has to take a breather. Okay, it takes a breather, people get a little fearful up at the tops and, um, people start to deleverage.
So with that being said, if we take a look at the VIX levels, you could see technically right now we are still between VIX 15 and 20. Uh, which is 60 to 80% of my cash can be allocated and I could have 20 to 40% on the sidelines. Right now I have 15%. After tomorrow's SoFi earnings, I'm going to have 20%. Okay, just to keep it on the safer side because the only thing that could protect you from a downturn and being able to have the opportunity to participate is really having cash. Okay? And I truly believe in that and that's what has been able to grow my account pretty consistently even during the fifth fastest stock market crash in history, which was last April. Okay, so with that being said, let's jump into the two stocks.
All right, we're first going to talk about Robin Hood. Robin Hood earnings on Wednesday and then we're going to talk about SoFi, which is tomorrow morning. Okay, so it's a little late to adjust there, but I could kind of tell you what my thoughts are on this. Okay, so Robin Hood trading at 106 after hours. Um, again, PE ratio obviously a little bit higher for Robin Hood at these levels, 58, but it's still not bad and just coming off last quarter profit margins of 36%. The quarter before that was 90% profit margins. This is actually when I decided to get into Robin Hood as a long-term position in the portfolio. Okay. Um, also when we look at their last quarter and then kind of what to look at for this quarter on Wednesday is we want to make sure that they're hitting their targets, right? And so far they have, they've overdelivered, right? Robin Hood Gold subscribers, 3.19 million subscribers as of last quarter and I expect this number to be probably much higher going into this next earnings. Okay. Um, also if you scroll down, you can see that, you know, they were planning to release, you know, Robin Hood Strategies 2025, Robin Hood Cortex and Robin Hood Baking, which they have done. In fact, there's some new things on this list that aren't even listed on here, like their own blockchain, right? Tokenized securities, right? Stuff like that. So, there's a lot of things on the forefront for Robin Hood, and I'm actually excited to see what their new earnings presentation will show for the future. Okay. So, as long as they're, you know, upping, advancing their platform and getting more people to subscribe to Gold, which is, I think, such a valuable tool that they have, they have recurring revenue, right, which is not very common with brokerages. Uh, you know, they're going to continue getting those subscribers up. And I think that once they roll out the full-blown Robin Hood Cortex, which is their AI assistant trading platform, that will be a game changer, right? I'll probably subscribe to Robin Hood Gold at that point. Okay, so, um, you know, everything's looking good on that front. As far as the chart goes, all right, we're not super super overextended here. We're not even, you know, we touched above the upper Bollinger band on July 18th and obviously quickly had a pullback. This would have been a great entry. I didn't get in as far as LEAPS go. I should have, should have, would have, could have, but we'll wait until the next pullback. Okay.
Um, so, how I position myself, I actually changed my whole portfolio as far as Robin Hood goes. Okay. PE ratio is at 60 and I said to myself, if this thing goes down to 94, 95, somewhere around this area, okay, the PE ratio is going to be somewhere in the low 50s. That's a pretty good PE for me. Okay. Back here, um, before they actually were profitable or actually they were profitable, but, you know, the stock was kind of trading sideways, you know, their PE ratio was up in the 70s, high 70s, even the 80s way back here, right? If you scroll back, not too long ago, just like a year ago, okay, this thing was trading at 163 PE, right? And those investors that got in there have been rewarded handsomely, right? But how do we play this in a way that's smart and allowing us to get, you know, allowing me to get the stock at a discount? Well, I'm not going to buy up here, right? I'm not buying anything up here. But what I did was I'm going to go into the portfolio. Again, this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. But if you see, we are in the portfolio right now. I actually reduced my position. We had 140K in cash secured puts or somewhere near that. I think it was 138K. Now we have 112. So, I actually reduced the position size by a good almost 30K. Okay? Because I want to be a little bit less exposed here. Um, not because of Robin Hood in particular, but because of the overall markets. I believe that the markets could pull back and I would love to increase my position size back to 13, you know, 12, 13% of the portfolio, maybe even 14%. But I want to wait for that pullback. Okay? And we're not quite there yet. So, what I did was I rolled all of my 94, my 88 puts. I closed them out. I was at 80% of premium, took my profits, and I said, I'm going to go out to the end of August to the 94s. Okay? The reason why I did that is because if you look at the August 1st expiration, earnings week, market makers are expecting a plus or minus $10 move. So, we could go down to 96 or up to 116. I want to be somewhere slightly outside of that range on the downside just in case it does overshoot it and maybe I could catch those shares. Maybe I could catch that falling knife as they would say, right? Um, so I went here to the end of August, locked in my July premiums and I went to the 94 puts, okay, to collect 288, which is a 3.26% ROI. Obviously, these numbers aren't guaranteed, they fluctuate as the stock fluctuates, but I locked that in. And for me, that's hitting my return goals. That's hitting my 3 to 5% return goals for July. Okay. Uh, for August actually, and that is where I went. Okay, I felt safe going there because if we look at the stock, okay, 94 is down here. If for some reason, bad earnings, maybe lackluster earnings, for some reason it comes down 11%, I'll pick up the shares at a discount and get paid a premium to do so. From all-time highs, that would be a 17% discount. So, for me, I love Robin Hood long-term. I think it's a great stock. PE under 100 for a highly growth stock in the AI crypto brokerage space, you know? I mean, like they're in so many different avenues here. Um, so, you know, that's that's a safe play for me there. All right. And if we follow this upward trend line, I mean, this thing could definitely, you know, by, let's just say September, it could get up to 120. Okay. Could get up to 120 by September. Um, maybe even sooner, but we'll see, right? So with Hood, that's the play there. Size down a little bit just because the overall market and if this market does tank it down there, not only will I pick up the shares on the cash secured puts if it stays down there by expiration, but I'll probably grab some LEAPS call options. Okay, that would be the time to grab the LEAPS call options. So, I'm going to do that on Robin Hood. All right, long-term position, still significant portion of the portfolio. Um, loving the stock and, you know, loving the premiums there on the cash secured puts.
Okay, now let's go ahead and get into SoFi because that is more important going into tomorrow morning, right? Some people may be nervous, some people may be super bullish and thinking this thing's going to 28. I'm going to tell you what I think. All right, PE ratio currently is at 51. So, it's lower than Robin Hood. That's why when I go into the account, okay, the current position size is 138K in cash secured puts. It's much bigger. All right. And I'm fine with that because of a few things. All right. Um, if we go, you know, their net margins last quarter weren't stellar, but they, the expectations were, you know, hey, they were going to grow significantly more within the end of the year. Margins before that were 30, 32%. Um, so we'll see tomorrow, right? We'll see. But just going off of their last earnings presentation. All right. Um, you know, they had a lot of stuff planned. Subscription, paid subscription launches in 2025. They already have, they grew that by 800,000 members. Current member size is 10 million members, okay? Um, that they can introduce to their new services, which is SoFi Crypto. Okay. This was a brand new thing that wasn't even on their last quarter's earnings presentation. So, they're getting into crypto or they're relaunching their crypto services, stable coins, allowing their current users on the app to buy and sell cryptos, to send crypto to, you know, to participate because they know that 30% of US adults own crypto. And SoFi. What I love about their platform, yes, very, they're similar in a sense to Robin Hood now that they offer brokerage services and crypto, but they're much different in a sense that a lot of their customers are, you know, people refinancing student loans, people refinancing mortgages. So, these are people that are responsible. They have, you know, jobs, right? Because they have student loans that they're refinancing, they're trying to pay off and stuff. So, responsible people that love crypto, um, that are, you know, have the funds to pay for a monthly subscription on the SoFi platform and they're already using SoFi and paying the interest, right? So, SoFi is a great company and I like their customer base. All right. Um, and then them adding crypto and blockchain into their technology is just goes to show that they can pivot to take advantage of this multi-trillion dollar industry, right, in the future. So, um, you know, the fees are ridiculous. Like when you're trading, you know, trading crypto, you could see that the fees add up and who benefits from that? Obviously, the platforms, Coinbase, Robin Hood, now SoFi, right? So, I really like the long-term outlook on the company. PE ratio is pretty attractive right here at 49. If you were to compare them to Robin Hood, I know they're different in a sense that their client base, their customer base is very different, but, you know, same industry. So, I'm liking them right here. And I think that we could be a little bit, I could be a little bit more aggressive on the cash secured puts. So, I'm going to show you exactly what I'm doing. Okay.
Um, current port, you know, current cash secured put size 138K. But let's go to how many puts I have. I have about 75 contracts of the 18 and a half puts that expire on Friday. But, you know, we're up 25% of the premium. Tomorrow, once the earnings are announced, they're going to suck probably all the premium out of these things and these will be up 80, 90% depending on where SoFi goes. And I'm going to close the whole position and open up a new position. Okay? And with that being said, I'm going to reduce the position size, clear up more cash. So you see my total cash value 173. I'm going to try to get this up to 200 going into, you know, this run-up in the overall market. Okay? It's not that I'm bearish on these stocks. I'm just cognizant of where the overall market is and I don't want to not have enough cash available. Okay? While everyone's buying the tops, you know, we're going to be in a good cash position. Um, so that I love the 18 and a half strikes. My next, you know, prob I guess we'll see where this stock is going to move because it says, you know, expected move is $2.14. So this thing could go up to 24, potentially 24, maybe 23, or it could go down all the way down to 19. Okay, so we'll kind of see where this thing goes. Um, and at that point, I feel pretty comfortable going out to the end of August and getting into these 19s. Okay, moving up from the 18 and a half, maybe to 19, 19 and a half, depending on where the stock is. If the stock's at 19, I'll probably go to the 19s to be pretty aggressive. Maybe the 18 and a halfs again. Okay, very aggressive. Um, if this stock goes up to 23, I I probably won't go higher than 19. Okay, so that's kind of where I like to stay between the 25 and 30 delta, which is a 3.6 ROI, or a 4.45 ROI. Remember, those numbers aren't guaranteed because the stock prices change, but I feel comfortable at those levels collecting those premiums. So, um, that's going to be that move. Okay.
So, with that being said, you know, just be cognizant of where SoFi trades tomorrow. Uh, we could see a flush down to this 19. A lot of support at this 19.83 level. Okay. And if that happens, um, I think that potentially could be a nice LEAPS option play or an at-the-money put play. Okay. Uh, if I were to grab the LEAPS, you know, I'd probably go, I'd go out at least to January 15, 2027, and I'd probably grab, you know, the 17s or even the 15 strike LEAPS options. There's so much volume in the 15s. So, I'll probably grab the 15s, you know, grab 10, 20, 30k of those. Um, you know, and play it that way because I'm long SoFi. I believe in the company. And, um, you know, overall, it's going to be fun to see their earnings tomorrow. But if you enjoyed this video, this quick update, please give it a thumbs up and I'll see you on Wednesday for the next update with SoFi earnings, post SoFi earnings, and pre-Robin Hood earnings. Take care.