ChargePoint Holdings, Inc.Updated 100 % more return potential with half the risk
First of all if they raise the cash and reduce the convertible price it is very good for the balance sheet and debt situation, I agree it is dilutive but we talk already at 12 so we talk 300 % above current price before you worry about dilution for the convertible note !!!!
selling shares at markets for so much is a good sign to me and give the company more flexibility , it also shows existing shareholders that institutional investors are taking huge risk in this company, why would they do if they did not think it has good upside ?
Sure it is highly dilutive but hey I am entering now and the dilution effect is priced in at around 15-20 %
reduce financial risk for a while
Bought a 20 deep ITM long option strike 2 may 24 for 1,95 each so total 3900 dollar after fees and delta close two 1 so basically it is like owning 8000 dollar of chPT but half the downside risk
I intend to sell OTM call at 80 delta so
today I sold 20 contract call 5 @ 0,20 so 400 dollars in for 44 days
Return of +- 10% each month if you keep repeating until exercise
if you get exercise no worries bingo for you if you don't your return on the 3900 will be roughly 60-70% til May 24 PLUS THE CAPITAL APPRECIATION OVER 3,95 DOLLAR PER SHARE ON 2000 SHARES
selling shares at markets for so much is a good sign to me and give the company more flexibility , it also shows existing shareholders that institutional investors are taking huge risk in this company, why would they do if they did not think it has good upside ?
Sure it is highly dilutive but hey I am entering now and the dilution effect is priced in at around 15-20 %
reduce financial risk for a while
Bought a 20 deep ITM long option strike 2 may 24 for 1,95 each so total 3900 dollar after fees and delta close two 1 so basically it is like owning 8000 dollar of chPT but half the downside risk
I intend to sell OTM call at 80 delta so
today I sold 20 contract call 5 @ 0,20 so 400 dollars in for 44 days
Return of +- 10% each month if you keep repeating until exercise
if you get exercise no worries bingo for you if you don't your return on the 3900 will be roughly 60-70% til May 24 PLUS THE CAPITAL APPRECIATION OVER 3,95 DOLLAR PER SHARE ON 2000 SHARES
Note
forget to mention , do what you want and trade at your own risk take care
Note
keep selling calls and roll over , don't worry about the price movement except something fundamentally changed I Know the volatility is huge but that's also the reason you got huge premium selling calls
keep until next earnings and reassess then
this is not for low risk investor and you need to manage your position size properly especially these risky names
Note
I mean keep rolling is you got already the full value of 400 dollar in you pocket so you sell an other call in 30 days at 80 delta at roughly 15 so about 300 dollar so you already got 700 dollar on 3900 in less than 1 months
if the price goes up sharply you can roll out and up the calls and pocket the profit on the share
anyway you need to learn to manage postions like this and not b a siting duck
not financial advice !!!!
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.