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Stock Thread (38 Viewers)

Gawain said:
Just insane market. Fidelity says I’m up 41.58% over one year. Could literally move retirement up a few years.

Thanks for all the tips. Even my International Paper adventure is in the green.
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Just a smidge north of that here. Maybe gained a year as I’m much heavier in real estate 

 
FreeBaGeL said:
Can someone explain to me why NKLA warrants would not basically be free money right now?

There is a $63 gap between the price of NKLA warrants and NKLA shares, yet the warrants convert to shares at a cost of $11.50 each.  You can't convert the warrants until early July so the share price could come down in between but it would have to drop by $51 per share to not make money.

NKLA warrant current price = $27

NKLA share current price = $90

Example:

Buy 100 NKLA warrants at $27 per warrant = $2700

Exercise cost to convert each warrant to a share is $11.50 per warrant = $1150

That's $3850 to get 100 shares of NKLA with the caveat being that you don't get them until early July.  100 shares of NKLA is currently worth $9000.

What am I missing here?
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I don't know man, reading up on it now.  think I'll be buying more. 

reddit thread https://www.reddit.com/r/NikolaCorporation/comments/gte4be/thoughts_on_how_vectoiqnikola_corp_nasdaq/?utm_source=amp&utm_medium=&utm_content=post_body

 Cashless Basis Exercise

If Nikola doesn’t enable cash exercise, you’ll only be able to exercise cashless. You won’t get 1:1 NKLAW to NKLA. Rather, you’ll get a fraction based on a fair value 10-day moving average of NKLA stock. Extracted from the S-4, the following formula for my situation would be (assuming Fair Market Value 10-day moving average is $30):

500 NKLAW x (FMV$30 - Exercise price $11.50) / FMV$30 = 308.3333 NKLA

if it's based on the 10-day, and you have 5 years, seems like a win at some point.

 
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FreeBaGeL said:
Can someone explain to me why NKLA warrants would not basically be free money right now?

There is a $63 gap between the price of NKLA warrants and NKLA shares, yet the warrants convert to shares at a cost of $11.50 each.  You can't convert the warrants until early July so the share price could come down in between but it would have to drop by $51 per share to not make money.

NKLA warrant current price = $27

NKLA share current price = $90

Example:

Buy 100 NKLA warrants at $27 per warrant = $2700

Exercise cost to convert each warrant to a share is $11.50 per warrant = $1150

That's $3850 to get 100 shares of NKLA with the caveat being that you don't get them until early July.  100 shares of NKLA is currently worth $9000.

What am I missing here?
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How does one buy warrants for NKLA?

eta - on etrade.

 
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Todem said:
Because I have been able to trade it to a tee.....just happens to be my pick to do that with. 

No other reason than comfortability. 

I am not a day trader. Not in the least bit. Except with this stock. I just have a good pulse on how it is trading. 
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I hear what you are saying. I played FCX like this for a good couple months back a few years ago. Since then, I've wondered how much more I would have made had I traded options on it rather than buying and selling stock, but I did not know how to trade options then. Premiums are super high right now so it may not be a good time, but in general, if you develop this sort of comfort with a name, wouldn't your ROI be astronomically higher if you played it with calls and puts?

 
FreeBaGeL said:
Can someone explain to me why NKLA warrants would not basically be free money right now?

There is a $63 gap between the price of NKLA warrants and NKLA shares, yet the warrants convert to shares at a cost of $11.50 each.  You can't convert the warrants until early July so the share price could come down in between but it would have to drop by $51 per share to not make money.

NKLA warrant current price = $27

NKLA share current price = $90

Example:

Buy 100 NKLA warrants at $27 per warrant = $2700

Exercise cost to convert each warrant to a share is $11.50 per warrant = $1150

That's $3850 to get 100 shares of NKLA with the caveat being that you don't get them until early July.  100 shares of NKLA is currently worth $9000.

What am I missing here?
Click to expand...
So I bought 100 at 23.26.. wish me luck.  How do I know the date I can convert?

eta - I dont even know wtf I am doing, but eff it.

 
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beef said:
I don't know man, reading up on it now.  think I'll be buying more.  reddit thread on NKLAW 

 Cashless Basis Exercise

If Nikola doesn’t enable cash exercise, you’ll only be able to exercise cashless. You won’t get 1:1 NKLAW to NKLA. Rather, you’ll get a fraction based on a fair value 10-day moving average of NKLA stock. Extracted from the S-4, the following formula for my situation would be (assuming Fair Market Value 10-day moving average is $30):

500 NKLAW x (FMV$30 - Exercise price $11.50) / FMV$30 = 308.3333 NKLA
Click to expand...
So thinking about this.. won't the market know when these are about to mature and the price come down to reflect it?

 
matuski said:
:lol:   haha alright I fully expect to kiss that $3500 goodbye.
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pretty sure you can exercise these up to expiration and not have to wait.  I'm not sure if there is a minimal hold until date though, but very unlikely you just lost $3500.  not with the way RH just attacked NKLA today.

 
beef said:
pretty sure you can exercise these up to expiration and not have to wait.  I'm not sure if there is a minimal hold until date though, but very unlikely you just lost $3500.  not with the way RH just attacked NKLA today.
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Reading it I have to hold ~30 days.  But I dont have to exercise for 3 years.

But that is what I have "learned" after 30 minutes on google/reddit.

 
matuski said:
So thinking about this.. won't the market know when these are about to mature and the price come down to reflect it?
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Why would NKLA come down to reflect it instead of NKLAW come up?

The latter makes much more sense I think.  The only reason they are more than the $11.50 apart is because they are traded independently.  There isn't anyone out there controlling it to make NKLAW exactly $11.50 less than NKLA.  NKLAW is only available on a select handful of brokers, most importantly not on Robinhood (and since NKLA is kind of a memeish stock that equates to a lot of the NKLA buyers not being able to buy warrants instead) which is why I think the disparity has grown so large.  The warrants also aren't available in many countries outside the US and a lot of people just don't understand them so they just opt for the simpler NKLA instead.

Regardless, NKLA is an independent thing that is trading very hot right now.  I don't think the warrants are factored into how it trades at all.  There is no over-arching force to move the stock down to the $11.50 spread it should be at.  Either people will notice and start buying more warrants and the warrant price will go up closer to the $11.50 gap or people won't and the disparity will remain.  I suppose it's possible that people selling shares to buy warrants will drop the stock price some but that would increase the price of your warrants which, like an options contract, are tradeable themselves prior to exercising.

Of course the stock was up 180% today and hasn't even begun production and is 2 years away from revenue so there are plenty of reasons for it to drop.  Whether it will drop below the $35 mark you would break even at remains to be seen.

Btw how did you get the warrants for 23 bucks?  Lowest I've seen them in after hours was 27.

 
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FreeBaGeL said:
Why would NKLA come down to reflect it instead of NKLAW come up?

The latter makes much more sense I think.  The only reason they are more than the $11.50 apart is because they are traded independently.  There isn't anyone out there controlling it to make NKLAW exactly $11.50 less than NKLA.  NKLAW is only available on a select handful of brokers, most importantly not on Robinhood (and since NKLA is kind of a memeish stock that equates to a lot of the NKLA buyers not being able to buy warrants instead) which is why I think the disparity has grown so large.  The warrants also aren't available in many countries outside the US and a lot of people just don't understand them so they just opt for the simpler NKLA instead.

Regardless, NKLA is an independent thing that is trading very hot right now.  I don't think the warrants are factored into how it trades at all.  There is no over-arching force to move the stock down to the $11.50 spread it should be at.  Either people will notice and start buying more warrants and the warrant price will go up or people won't and the disparity will remain.

Of course the stock was up 180% today and hasn't even begun production and is 2 years away from revenue so there are plenty of reasons for it to drop.  Whether it will drop below the $35 mark you would break even at remains to be seen.

Btw how did you get the warrants for 23 bucks?  Lowest I've seen them in after hours was 27.
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etrade sold them to me at 23.26 :shrug:

eta - there was a note to wait until morning because it is after hours, but it took the order.

 
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matuski said:
etrade sold them to me at 23.26 :shrug:

eta - there was a note to wait until morning because it is after hours, but it took the order.
Click to expand...
Ah, $23.26 was the price at market close.  I don't think they are going to fill at that price unless they drop a lot overnight.  They finished off after hours at $28 so if you placed a limit order at 23.26 it probably won't fill and if it's a market order then it will probably fill higher.

 
Pretty sure there are some Canadian's in here either posting/lurking.

Our company is an exporter throughout North America, and the world for that matter. Mexico is depressed right now so I know we're going to see less revenue from them.

However, I can't get a good grip on Canada. Any recommendations for solid economic news regarding our, "Good Neighbor's," to the North?

Thanks to anyone who replies  :hifive:

:banned:

 
pecorino said:
I hear what you are saying. I played FCX like this for a good couple months back a few years ago. Since then, I've wondered how much more I would have made had I traded options on it rather than buying and selling stock, but I did not know how to trade options then. Premiums are super high right now so it may not be a good time, but in general, if you develop this sort of comfort with a name, wouldn't your ROI be astronomically higher if you played it with calls and puts?
Click to expand...
I am sure it would. My favorite option stategy though is selling way out of the money cash secured puts on names I would love to own anyway. March was the greatest time to do just that and massively enhance yield on your portfolio and maybe even get put a few amazing names at floor prices. If I had done that with BA I may have caught 80-85 dollar cost basis’s with the premiums I could have taken in on puts as that was dropping like a boulder LOL.

Meantime speaking of BA........yeah like I had been saying back when I pushed it hard in March, it was massively oversold. 

Wait till 2021.....stock may be in the 300’s again a lot sooner than I thought. Simply incredible rally. 

 
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The General said:
I’ll never step foot on their floating bacteria box but holy moly I love CCL. 
Click to expand...
I'll echo the same statement but with RCL.  Bought a good portion at 25 back in early April.  Bought some CCL too but didn't hang on to it.  RCL has been a juggernaut.  I will also never step foot on a cruise ship.   At least I don't plan to.  

 
Todem said:
I am sure it would. My favorite option stategy though is selling way out of the money cash secured puts on names I would love to own anyway. March was the greatest time to do just that and massively enhance yield on your portfolio and maybe even get put a few amazing names at floor prices. If I had done that with BA I may have caught 80-85 dollar cost basis’s with the premiums I could have taken in on puts as that was dropping like a boulder LOL.

Meantime speaking of BA........yeah like I had been saying back when I pushed it hard in March, it was massively oversold. 

Wait till 2021.....stock may be in the 300’s again a lot sooner than I thought. Simply incredible rally. 
Click to expand...
Great call on this.  I didn't follow (can't own everything), but you took a lot of heat on this one in particular and were right again.  Easy double up.  I wonder if that Warrior dude has doubled his portfolio?

 
FreeBaGeL said:
Ah, $23.26 was the price at market close.  I don't think they are going to fill at that price unless they drop a lot overnight.  They finished off after hours at $28 so if you placed a limit order at 23.26 it probably won't fill and if it's a market order then it will probably fill higher.
Click to expand...
ouch it filled at 30.80 :lmao:

alright need all FBGs to get in on NKLA and keep it above 42.30.

 
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I'm glad I quadrupled down on MGM puts yesterday and put another $1,200 into 9/20 20p. 

My 401k doesn't like this though.

So conflicted. 

 
BassNBrew said:
Great call on this.  I didn't follow (can't own everything), but you took a lot of heat on this one in particular and were right again.  Easy double up.  I wonder if that Warrior dude has doubled his portfolio?
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Currently riding all-time highs after a string a great long-term decisions. But then again, I'm an investor, not a degenerate gambler looking for my fix in the stock market ;)  

 
Just confirming - once I have purchased a warrant, I don't care about the warrant price going up or down - all I care about is the correlating stock price staying above warrant+conversion cost?

 
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beef said:
This Is What Happens to Markets When You Print Trillions of Dollars

Seems to sum up some thoughts I've seen posted here.  Pros/cons of the "Robinhood market", day trading vs. longs, and how long can it last before balance sheets and fundementals really matter again.  Sure has been a fun ride.  
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Thanks for posting. The rally up until a few weeks ago seemed somewhat orderly. But now we're in Tulip Mania mode. Maybe I'm making too much of the rally in bankrupt stocks but too much money sloshing around in the system. Folks think they can't lose. Powell has essentially created an asset bubble while trying to avoid a depression. The limits of monetary policy are apparent. Perhaps the worst thing Powell said was that he wasn't increasing income inequality. 

HTZ already halted twice today. Going to be a lot of bag holders. Got my face ripped off yesterday on it but will seemingly get out alright. Will be funny when they halt it for the day ahead of a delisting and all the RH folks cry about not being able to trade it. I'll probably take my money and go home just because this type of mania can go on too long. 

 
Warrior said:
Currently riding all-time highs after a string a great long-term decisions. But then again, I'm an investor, not a degenerate gambler looking for my fix in the stock market ;)  
Click to expand...
Congrats. Although I'm curious, how have you done it? If you're an investor and were fully invested on Feb 19? You'd either have to be the best investor or a gambler to pull yourself out of that hole? Or you put a lot of money in during the drop?

 
sporthenry said:
Congrats. Although I'm curious, how have you done it? If you're an investor and were fully invested on Feb 19? You'd either have to be the best investor or a gambler to pull yourself out of that hole? Or you put a lot of money in during the drop?
Click to expand...
Maybe heavy into NASDAQ.

 
Taking a little beating on NKLA, but I love their long term possibilities with their truck/semis and the freight industry as a whole.   Thought I heard they're expecting $1B in earnings by 2023 on Bloomberg?  Looking at US DOT/Federal Highway data, their freight forecasts are huge through 2045 and I still expect a massive infrastructure bill in the next year or two to backup that need for freight.  

 
beef said:
Taking a little beating on NKLA, but I love their long term possibilities with their truck/semis and the freight industry as a whole.   Thought I heard they're expecting $1B in earnings by 2023 on Bloomberg?  Looking at US DOT/Federal Highway data, their freight forecasts are huge through 2045 and I still expect a massive infrastructure bill in the next year or two to backup that need for freight.  
Click to expand...
I don't think a functioning hydrogen engine has ever actually been built though?

 
sporthenry said:
Congrats. Although I'm curious, how have you done it? If you're an investor and were fully invested on Feb 19? You'd either have to be the best investor or a gambler to pull yourself out of that hole? Or you put a lot of money in during the drop?
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He doesn't tell you his moves in advance (or ever) because he's probably lying. He just comes in after the fact and tells everyone else they're dumb and then goes away again.

 
BassNBrew said:
Great call on this.  I didn't follow (can't own everything), but you took a lot of heat on this one in particular and were right again.  Easy double up.  I wonder if that Warrior dude has doubled his portfolio?
Click to expand...
Doubtful.

We are back into

BLMN today at 12.89

MGM at 21.42

SAVE first time and we took a position at 21.76

Let’s go baby. Love taking positions in these three on double digit sell offs. 

 
matuski said:
Just confirming - once I have purchased a warrant, I don't care about the warrant price going up or down - all I care about is the correlating stock price staying above warrant+conversion cost?
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If you're planning to exercise them then yes warrant price is irrelevant once you own them.  It only matters if you decide to trade them instead of holding them in the meantime.  Similar to an option contract where the value of the contract and things like IV only matters if you plan to trade the contract instead of hold it to expiry.

 
You know RH is back up when you see this:

June 09, 2020 

10:07 am ET 
Nikola Corp. (NKLA) Resumed Trading

10:02 am ET    
Nikola Corp. (NKLA) Paused due to volatility

9:43 am ET    
Nikola Corp. (NKLA) Resumed Trading

9:38 am ET    
Nikola Corp. (NKLA) Paused due to volatility

9:37 am ET    
Nikola Corp. (NKLA) Resumed Trading

9:33 am ET    
*Nikola Shares Halted On Circuit Breaker

9:32 am ET    
Nikola Corp. (NKLA) Paused due to volatility

 
Todem said:
Doubtful.

We are back into

BLMN today at 12.89

MGM at 21.42

SAVE first time and we took a position at 21.76

Let’s go baby. Love taking positions in these three on double digit sell offs. 
Click to expand...
Right behind you. Got back into BLMN (12.90), MGM (21.92), and SAVE (22.46).

Also took a look at @BassNBrew’s JWN suggestion yesterday and I liked the chart — so I bought that dip today as well, in at 21.50.

 
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