Irrational Exuberance: How do we short this beast?
We're way beyond reasonable valuation at this point. What we have here is a bubble that's gotten out of hand. See 
TLRY's momentous run up last year, what goes up must come down. But how and when?
SHOP is a pure momentum stock that people keep buying out of FOMO, it only just over 8 Million shares, which means it will move on you...FAST. THIS IS NOT FOR THE FAINT OF HEART, only use what you're prepared to lose.
Solution #1: Purchase a Bear Put Spread. Buy 280, sell 250...or whatever width you desire. MAKE SURE this is far dated, July or August at least. What this will do is let you make money IF SHOP CONTINUES TO RISE, you're short put will lose theta and you can collect premium by buying it back cheaper. Once you're short put value has gone to nothing....the inevitable crash should plow right through your now naked long put. Giving you a nice payout. Cannot stress the importance of buying enough time here.
Solution #2: Wait until its next consolidation and keep your eye on the pivot points (like the ones I highlighted). The reversals that have been happening have ignited massive short squeezes sending this higher every time. Usually the stock will break support intraday and chill there for a bit until it decides it's not having it and reverses. This is the stock telling you "I'm still not ready to collapse yet".
Wait for a CONFIRMED move to the downside. Allow it to close below the pivot and watch for follow-through the next day.
The way premiums are priced on this right now I would say Spreads are the way to go, but this is up to you.
Good luck out there.
TLRY's momentous run up last year, what goes up must come down. But how and when?SHOP is a pure momentum stock that people keep buying out of FOMO, it only just over 8 Million shares, which means it will move on you...FAST. THIS IS NOT FOR THE FAINT OF HEART, only use what you're prepared to lose.Solution #1: Purchase a Bear Put Spread. Buy 280, sell 250...or whatever width you desire. MAKE SURE this is far dated, July or August at least. What this will do is let you make money IF SHOP CONTINUES TO RISE, you're short put will lose theta and you can collect premium by buying it back cheaper. Once you're short put value has gone to nothing....the inevitable crash should plow right through your now naked long put. Giving you a nice payout. Cannot stress the importance of buying enough time here.
Solution #2: Wait until its next consolidation and keep your eye on the pivot points (like the ones I highlighted). The reversals that have been happening have ignited massive short squeezes sending this higher every time. Usually the stock will break support intraday and chill there for a bit until it decides it's not having it and reverses. This is the stock telling you "I'm still not ready to collapse yet".
Wait for a CONFIRMED move to the downside. Allow it to close below the pivot and watch for follow-through the next day.
The way premiums are priced on this right now I would say Spreads are the way to go, but this is up to you.
Good luck out there.
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