022. PIGGISH PLAY - LONG Digital Turbine + CRM Earnings Strangle
Updated
Ever wonder what it would be like to have your cake, and eat it too?
Go ask Paylocity - it's the biggest mooch on the street.
Why am I starting with the optional/bonus part of this position?
It is because:
1) APPS technicals are so profoundly bullish that I may just avoid mentioning them entirely in this description, and
2) It's pretty damn funny to observe how parasitic Paylocity's stock price is when it poaches CRM's much-needed volume - only to cut all ties a few hours later, leaving the premises without waking CRM up in the morning.
Anywho, I think we might just have a very affordable, synergistic means of playing CRM's earnings report on Tuesday using Paylocity calls, APPS calls, and CRM puts. If CRM smokes its estimates, Paylocity will most definitely skyrocket given its latest performance and APPS will rip higher if it can hold that unbelievably steep lower trendline.
Seriously - this sort of consolidation is extremely rare for such a young company. It reminds me of how Tesla and Shopify used to be - before fundamentals were discarded for Stocktwit sentiment indicators - except that APPS's early stages seem even bullish-er.
Don't believe me?
Take a look at how both of these monsters grew up around 40 bucks/share and compare them against the top chart. APPS has them beat in every category; particularly its incredible rate of consolidation and ability to recover 4-5 points higher on any given day. While Tesla can do this on a much bigger scale now, it took them forever to get to this point. This stock can do the same damn thing and it's only at 40.
Onto the Pig Play Details:
This is an Options-Only play that allows more risk to be taken because of the offsetting positions. If you want to buy and hold equity, go right ahead but I don't have an offsetting solution for you that would be worth the risk in this spot.
If Monday is choppy and slightly red, wait until the end of the day to enter all three positions simultaneously. There is zero reason to take on the additional risk for some sort of premium scalp if ZM catches a bid before it reports - or something like that.
On the other hand, if it is an insanely bullish day from the start because USD Monopoly Money is recognized as somewhat fraudulent by all of the countries that have been blindly buying our notes, then I'd recommend focusing on entering the APPS calls first and foremost, right on the button.
Now time for the Pig-Specs:
ALTERNATIVE 1: LONG BULL WITH SIMPLE OFFSET (APPS CALLS, IWM PUTS):
APPS (CALLS) - BUY - (45 Dollar Strike, 12/18/2020 Expiration)
IWM (PUTS) - Use about 1/3rd of the capital used to purchase the APPS calls and buy the second strike behind the then-current price and a 12/04 expiration. If you don't like wasting money, I suggest you
ALTERNATIVE 2: LONG COMPLEX SOFTWARE ER STRANGLE WITH (APPS CALLS, CRM PUTS, and PCTY CALLS):
1) APPS (CALLS ) - (same as above), you get to choose how many you want to buy since you are autonomous (unlike Paylocity). Just know that the net cost of the other two positions should roughly equal 75% of the amount allocated to this main long call position.
2) CRM (PUTS) - BUY - (1-2 PUTS, NEAR THE MONEY, EXP 12/04/2020 Expiration)
While these are both stupidly expensive and unlikely to hit, it is a NECESSARY part of this play. You are getting a severe discount on the relatively large number of calls that you wouldn't otherwise receive under 99% of circumstances. The overwhelming odds are that CRM beats and that the market will not tank until the NAS touches new highs. However, pay the premium so that you're hedged all day and avoid getting cute by waiting two hours for a discount.
Naht in this market and don't come crying to anyone if ya go forward unhedged.
3) PCTY (CALLS) - BUY - (220 Strike, 12/18/2020 Expiration)
Allocate 1/3rd of the amount of capital that you just spent on your offsetting CRM puts and purchase these unbelievably beautiful-looking calls that have a ton of implied volatility that will kick up the second CRM reports, a very nice amount of theta to work with, and a strike that can be very easily surpassed this week. Both these calls and the APPS calls are amongst the best deals I've seen all year.
Good Luck Ya Software Nerds.
- Software Appigation Strangler
APPS
CRM
PCTY
IWM
Go ask Paylocity - it's the biggest mooch on the street.
Why am I starting with the optional/bonus part of this position?
It is because:
1) APPS technicals are so profoundly bullish that I may just avoid mentioning them entirely in this description, and
2) It's pretty damn funny to observe how parasitic Paylocity's stock price is when it poaches CRM's much-needed volume - only to cut all ties a few hours later, leaving the premises without waking CRM up in the morning.
Anywho, I think we might just have a very affordable, synergistic means of playing CRM's earnings report on Tuesday using Paylocity calls, APPS calls, and CRM puts. If CRM smokes its estimates, Paylocity will most definitely skyrocket given its latest performance and APPS will rip higher if it can hold that unbelievably steep lower trendline.
Seriously - this sort of consolidation is extremely rare for such a young company. It reminds me of how Tesla and Shopify used to be - before fundamentals were discarded for Stocktwit sentiment indicators - except that APPS's early stages seem even bullish-er.
Don't believe me?
Take a look at how both of these monsters grew up around 40 bucks/share and compare them against the top chart. APPS has them beat in every category; particularly its incredible rate of consolidation and ability to recover 4-5 points higher on any given day. While Tesla can do this on a much bigger scale now, it took them forever to get to this point. This stock can do the same damn thing and it's only at 40.
Onto the Pig Play Details:
This is an Options-Only play that allows more risk to be taken because of the offsetting positions. If you want to buy and hold equity, go right ahead but I don't have an offsetting solution for you that would be worth the risk in this spot.
If Monday is choppy and slightly red, wait until the end of the day to enter all three positions simultaneously. There is zero reason to take on the additional risk for some sort of premium scalp if ZM catches a bid before it reports - or something like that.
On the other hand, if it is an insanely bullish day from the start because USD Monopoly Money is recognized as somewhat fraudulent by all of the countries that have been blindly buying our notes, then I'd recommend focusing on entering the APPS calls first and foremost, right on the button.
Now time for the Pig-Specs:
ALTERNATIVE 1: LONG BULL WITH SIMPLE OFFSET (APPS CALLS, IWM PUTS):
APPS (CALLS) - BUY - (45 Dollar Strike, 12/18/2020 Expiration)
IWM (PUTS) - Use about 1/3rd of the capital used to purchase the APPS calls and buy the second strike behind the then-current price and a 12/04 expiration. If you don't like wasting money, I suggest you
ALTERNATIVE 2: LONG COMPLEX SOFTWARE ER STRANGLE WITH (APPS CALLS, CRM PUTS, and PCTY CALLS):
1) APPS (CALLS ) - (same as above), you get to choose how many you want to buy since you are autonomous (unlike Paylocity). Just know that the net cost of the other two positions should roughly equal 75% of the amount allocated to this main long call position.
2) CRM (PUTS) - BUY - (1-2 PUTS, NEAR THE MONEY, EXP 12/04/2020 Expiration)
While these are both stupidly expensive and unlikely to hit, it is a NECESSARY part of this play. You are getting a severe discount on the relatively large number of calls that you wouldn't otherwise receive under 99% of circumstances. The overwhelming odds are that CRM beats and that the market will not tank until the NAS touches new highs. However, pay the premium so that you're hedged all day and avoid getting cute by waiting two hours for a discount.
Naht in this market and don't come crying to anyone if ya go forward unhedged.
3) PCTY (CALLS) - BUY - (220 Strike, 12/18/2020 Expiration)
Allocate 1/3rd of the amount of capital that you just spent on your offsetting CRM puts and purchase these unbelievably beautiful-looking calls that have a ton of implied volatility that will kick up the second CRM reports, a very nice amount of theta to work with, and a strike that can be very easily surpassed this week. Both these calls and the APPS calls are amongst the best deals I've seen all year.
Good Luck Ya Software Nerds.
- Software Appigation Strangler
APPSCRMPCTYIWMTrade active
for those that liked this idea and presumably have the nutz to execute it, I will offer you what my current positions look like. reason is because this market is going to become really hard to trade and my ideas are somewhat abstract, so id recommend fading what I have locked in place, just in case we some some whipsaw today:Overnight Positions (not touching for foreseeable future):
1) TZA Calls, 1/15, $12
2) GLD Calls, 1/15, $182
3) SSRM Calls, 12/18, $17 (gold miner)
4) APPS Calls, 12/18, $45 strike
5) NVDA Calls, 12/18, $365/$395 split
6) This entire abount long in cash
Prolly gonna add a Tesla position (NIO Put to Offset given that tsla about to ruin that company's whole career) and some paylocity.
Now you all better follow thru and snipe some baggers by end of week.
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Lastly before the bell, please wait like 4-5 mins before buying anything after the open.The few hundred bucks you might save if the market rips on the open is just not even close to worth the pain of getting cracked in the face by what might be an early bull trap to shake out the weak robinhooders.
Anyone offering the advice to "trade safe" is an idiot of sorts since trading this market is not safe period.
Thus, my advice is to just think for a minute before you end up panic selling, or worse, panic buying. GL.
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enter 1/4 calls, both apps and pctyNote
alright this dip is where the money is made. Got about 25 points more to the downside on the NAS futures. You can "safely" start scaling in the apps now. focus on getting total position in and then sprinkle the pcty.
looks like were gonna have an exceptional day on APPS.
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Dont add any more PCTY. Add CRWD instead.175 calls for this week.
Now you got three horses instead of one.
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Sell CRM Puts, replace with APPS puts @ 40 for 10/18 with same quantity as calls.Once finished, congrats, you now have blue skies arbitrage.
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On top of this, ZM just did us a very solid favor.I probably wont comment from here on out until I sell my position (likely this week). Its gonna be difficult to pick out a price target, so if anyone here wants to contribute an idea, please do so.
All ideas are welcomed. Even if they are impossibly wrong I'll still say thank you.
Order cancelled
Equity futures look unstable at the moment.I will likely let leave my puts and try to take my calls on the open.
Unless the futures turn it around to 1% or greater before the open, I'd rather not be tempted to buy into something slightly scarier than a standard 2020 covid pullback.
Note
Hold, sell, I leave up to you.Gonna hold half of both calls and puts through today.
Market is probably going to "J" shortly and will wait for NDX to reach an all time high.
What happens after that is up to the trading gods.
Best of luck.
Note
Potentially, maybe, could have been a bit more patient here.APPS close today was not real. That daily chart is ludicrous.
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