Transcription
We saw a huge spike in fear in the markets last Friday, and today that fear collapsed. In fact, the market is reaching new all-time highs, and I'm going to go over exactly where it may be headed and how I'm playing three particular stocks heading into earnings the week of November 7th. So, 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.
As we take a look at the account, we just hit new all-time highs in the portfolio and realize gain and loss today. We did close out the Robin Hood leaps that we bought on Friday, uh, for a nice $3,325 profit. Results vary day-to-day, month-to-month, and year-to-year, but these are the results that I got today.
Now, I'm not the only one doing it. As you can see right here in my private mastermind, Options Trading University, we now have 448 clients sharing their inspiration here in the Discord channel. As you can see right here, this client right here, Trading Tesla, had a, um, nice inspiration there. Another client closed out some, uh, Hood leaps. More inspiration there. And it's great to see everyone's inspirational posts in here and seeing what is potentially possible here in the markets.
Now, if you do want access to my Ryan's trades and my leaps, entries, and exits, that'll be at the top of the description down below. I also do give out free trade ideas here on my Instagram. Also, on my brand new X account, if you haven't subscribed to that, that'll also be down in the description, as well as my free newsletter. These are all free resources that you could be subscribed to. So, make sure to do that.
Now, let's go ahead and jump into the markets. If you get any value out of this, please hit the thumbs up button for me. I would greatly appreciate that.
But as you can see right here, QQQ is basically pressing up to previous all-time highs right here at 612.23. The market closes in about 7 minutes, and it looks like it wants to break out to new all-time highs. Okay, so as you can see, bullish crossover on the RSI. A bullish crossover is commencing on the MACD, which are both momentum indicators. So, right now is a great setup for us to kind of push up towards that 620 area that I was talking about that I think we're going to hit very soon here, potentially even this week going into earnings.
Now, another thing we saw is the VIX collapsing. Okay, the VIX collapsed about 12% today. And when we see this, okay, uh, right here, we're taking advantage of volatility. We're selling, uh, put options. We're selling premium. And now that that volatility has collapsed, okay, that is when the market tends to move higher. And I think that VIX will kind of head down here until the next bout of, you know, news comes out. Maybe it's the Fed, maybe it's something along the lines of the government shutdown. We'll have to see, but earnings week could spike this volatility a tad bit here, but, um, for the next few days, I think that the market will kind of grind higher.
Um, so there's three particular stocks that I think are in really, really good zones right now going into earnings. So I want to dive into those, but let's take a look at the VIX cash allocation levels. As you can see right here, we are trading between VIX 15 and 20. So there's still slight fear in the market. So right now, ideally, I could have 20 to 25% cash sitting on the sidelines ready to go just in case we do get another VIX spike and a nice market crash or market dip. Okay, so right now I'm roughly around 13% in cash. So I'm very, very low on cash, but I do plan on upping those numbers this week as time goes by and as positions start closing out. So this is what I want to be more aligned with. And this has kept me safe in the markets and allowed me to take advantage of opportunities. So I just wanted to kind of point out these levels.
But let's go ahead and jump into the very first stock, which is Palantir. Okay, Palantir is sitting in this nice range between 170 and 187, and it's kind of been chilling in this range for about, uh, almost a month now, and I think based off good earnings. Okay, this stock has the potential to really run here. Um, I think that it may go up to $200. Uh, that is kind of my target price point. And if we go into the options chain, I'll show you exactly where the market makers are predicting that this stock is going to be headed during earnings week. So, we'll jump into that.
One recent catalyst is, uh, you know, the, there's $1 trillion of US defense spending, and the US defense sector is transitioning and moving towards cheaper and flexible sources that are grounded in software and unmanned systems, which Palantir is a direct beneficiary of all of those government and military contracts. So, um, not only are they really exposed to the government and the military, but they are expanding their commercial sectors and they had really good net-free cash flows last quarter. And that's kind of what I'm expecting this quarter.
So, if we dive into the account, remember this is not financial advice. I'm just sharing what I'm personally doing for educational purposes only. Results may vary, but if we dive into the account, you could see that I currently have a $115,000 position here with cash secured puts. Now, I'm at the 165s and the 162s to collect about, uh, $3,400. But if I were to play earnings, which I'm going to, okay, once these expire, um, actually, I am playing earnings. Yeah, November 7th. So, once these expire in 11 days, I'll go ahead and put on an earnings trade for November 7th.
Now, if I were to put these on today, we could see that the market makers are predicting a $26 move. So this stock could essentially go all the way down to somewhere around 154 and as high as 203, okay, or 205. So the stock could go quite high or quite low. And that's why I'm kind of predicting the 200 range. I think it'll land somewhere within that market maker move.
But if we go back here, okay, if I were to sell a cash secured put today and I wanted to play earnings, I would go semi-aggressive. I feel comfortable getting assigned at 165. Those are the current puts that I have now. So, I'll probably sell those ones. That's a 29 delta, right, with a potential 3.5% ROI. Results vary based off where the stock's at, but I really like that risk-to-reward profile there. Um, you know, for 18 days. So, I would sell the 165s. I feel comfortable there.
If I wanted to stay outside of that expected move, I would go all the way down to the 150s, okay? Because the, the market maker is expecting the stock to go down to 153 potentially for earnings week, and I would probably stay right outside of that if I didn't want to get assigned and still pick up a potential 1.7% on my money in 18 days. Results vary based off where the stock's at, but those are two options for me. Okay. Uh, I like the 165 play and I'm most likely going to play that because I'm very bullish on Palantir and I think that Palantir has been loading up quite a while here. We had a little sell-off in the markets, you know, not too long ago, and Palantir handled it quite well. In fact, this was a good opportunity for people just to kind of get out of Palantir. Kind of like Robin Hood really tanking here. Okay. Um, that was a good opportunity for people to do the same on Palantir, but they didn't. So, that is why I'm really liking Palantir. It is loading up an RSI crossover here. And on the MACD, it looks like it wants to head bullish as well. So I think Palantir is really loading up and I think market makers are pretty accurate with their predictions of it going to 203 in that 203 area on good earnings. So that's going to be the first play. All right, that's the first earnings play.
The second earnings play is going to be SoFi. SoFi has been trading within this range as well between 24 and 30. It's been quite a wide range, but I do think this stock could head all the way up to by end of year somewhere between 34 and 36. That's my end-of-year prediction. Okay. Um, obviously it may happen, it may not, but that is kind of my end-of-year prediction and based off good, good earnings, I think this thing could head much higher. So, there's lots of premium in the options and it's a wonderful, um, opportunity to take advantage of.
So, we're going to dive into the portfolio. This is actually probably my largest position in the portfolio. Yeah, second largest position under Robin Hood with 186,000 in cash secured puts. Okay, so for October 31st, which is that's earnings week. Okay, I'm set out to collect about $8,200. Um, I'm playing this pretty heavy. I have the 26 and a half. So, I'm kind of pretty much stuck there. If I get assigned, great. You know, I'm fine owning the stock at that price. To me, that's a discount from all-time highs. Um, but if I were to play it again, okay, the market makers are expecting a plus or minus $4.45 move. So, this stock could go anywhere from, you know, as low as $24 upwards of $32 to $33. Okay, so that's quite a wide range. And because it already hit that $24, um, spot not too long ago, I believe there's a lot of support there. So, I don't see it going down much lower than that, even if earnings do come in softer than expected. Okay.
So, what I would do is I would go out here and I would play it, you know, semi-aggressive. I'd probably go anywhere from 20 to 30 delta. I'm at the 30 delta, as you could see. If I sold the 26 and a halfs today, I'd pick up 108, which is a 4.29 ROI. Okay? So, and that's results vary based off where the stock's at, but that's a really, really good return. Okay. Um, if I wanted to play a little safer, I'd probably go down to the 25 delta and in 11 days, I would pick up, pick up a potential ROI of 2.69%. Results vary there as well. So, anywhere in between the 25 and 26 and a half strikes I really like. 25 would be, hey, I'm playing it pretty conservatively, but I don't mind getting assigned kind of at the bottom of the range. And then 26 and a half would be, um, way more aggressive. And that's kind of getting assigned, uh, you know, at the higher end of the range if it does go down all the way to 24. But it doesn't matter to me because if I get assigned there, right, most likely I'll be able to pick up, uh, somewhere around a dollar on the covered calls or 100 bucks. Okay. So I really like that price point and I think SoFi is really undervalued long-term, especially with the administration selling off $1.66 trillion in student loan debt. And SoFi saying, "Hey, we'll pick up that debt and service all of those customers, right? And they're going to refinance that debt, help people get hopefully a lower rate on their student loans." And then SoFi now has, you know, a trillion dollars, um, you know, in, in, uh, fees that they could collect on based off interest rates. So I think SoFi is in a prime position, um, for that, as well as an alternate brokerage platform now that they offer options trading. So SoFi I think is really, um, you know, pretty undervalued. And if we look at the price range, okay, from all-time highs, if I were to get assigned at 26.5, right, that's that's about a 13% discount. But from, if I were to do the 25s, right, that would be about a 17% discount. So, I really like that range there and getting assigned for the long term. Worst case scenario, I just ride it up and sell covered calls to collect premiums on my shares.
Now, let's dive into the last stock. This is going to be a new stock in the portfolio, and I'm pretty sure I'm going to play this, uh, for earnings because I really like this stock. It's actually Uber, Uber Technologies. Okay, so last quarter their earnings were pretty good, uh, lots of free cash flow, and I really like picking up stocks right now that are a little bit on the safer side, the safer play. They have kind of, um, protection from potential recessions or anything like that. Uh, and the PE ratios are very low. So on Uber, the PE ratio is about 15 last quarter. Okay, let me kind of go over their earnings report. All right. Net cash provided, um, free cash flow from operating activities less capital expenditures was $2.5 billion. All right. They grew their income from operations grew 82% year-over-year. All right. And revenues grew about 18% year-over-year, which is double digits. This is something that we want to see. They are heavily, you know, um, pushing their subscription platform for Uber One, which also works for Uber Eats that I've seen on their app to compete with DoorDash, which is really, really great as well. And I noticed using Uber Eats and DoorDash, I use both. Uber Eats has a wider range for, you know, locations of restaurants to choose from. I noticed that sometimes DoorDash, they won't go out a certain radius. Maybe it's 15 to 20 miles, but Uber will go a little bit further, which is pretty nice for their users and customers. Okay, so just, you know, from an, from a user perspective, I like that. Also, one thing to notice is that they announced a new $20 billion share repurchase program authorization because that underscores their confidence in the business following yet another quarter of strong top and bottom line performance from their, um, CFO, Prashant Raja. Okay, so that is pretty good there that they're going to be doing a lot of, you know, $20 billion in buybacks.
So, there's a way to play Uber. All right, just looking at the chart, it's at the lower Bollinger band. This is a great entry here. Every time it's hit that lower Bollinger band, it's kind of went back up as you could see, um, multiple times right here, right here, right here, right? And then now right here, and then hopefully, you know, into earnings, it goes back up again. So, nice long upward trending chart. As you can see, PE ratio is very low, com, lower than the S&P 500, and they have really good net free cash flows and a $20 billion share repurchasing program, which will only help the stock in the long run. So, I really like Uber. I think fundamentals are strong and it's kind of one of a safer company to have in the portfolio.
So, if we go to Uber's option chain, all right, I'm going to show you kind of where the expected move is. So, their earnings are the week of November 7th, 18 days out, has a $9 expected move. So, it could head all the way down to 82, right? And that's kind of the expected move. So, if we wanted to stay outside of that expected move, I would go to the 82 strike, right? And pick up about close to 1% in 18 days of potential ROI. Results vary based off where the stock's at.
Now, for me, I already know it's at the lower Bollinger band, okay? And I don't mind getting assigned on the share. So, it's already at the lower Bollinger band. I, I think I would be fine getting assigned somewhere around this 86 to 88 area, somewhere in here. Okay, which is well below the lower Bollinger band and right above the 200-day moving average, which has served as support in the past. So, I think I would be fine getting assigned there. So, let's go ahead and go to a strike. Um, let's go to the 86, right? I'd pick up 138 bucks, which is a potential 1.78% ROI in 18 days. Not bad. So, I really like that strike, and that's probably going to be the one that I'm going to play with a small position here going into earnings in two weeks. So, that's going to be my play for Uber.
Hopefully, you enjoyed this video. Please give it a thumbs up, and I greatly appreciate you being here. I'll see you in the next one and take care.