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Billackman

Is Ackman Right to Buy Netflix (NFLX)?Today we were discussing the purchases of Netflix NASDAQ:NFLX by Bill Ackman: Ackman sent a letter to investors in his hedge fund saying he had bought more than 3.1 million shares of Netflix, the video streaming pioneer whose stock had seen such vast reversals in recent days that it had been trading at June 2018 levels. At Netflix’s current price of about $390 per share, the purchase gives Ackman a stake worth more than $1 billion — and makes him one of Netflix’s top 20 shareholders. That is a pretty bold buy from one of my favorite contrarian investors but do I like the trade? I'm going to use my own Technical Analysis to see before making a decision...
NASDAQ:NFLXLong
by norok
4
Don't get PLAYED by Big Money: Inflation Trade Over?To trade the markets you have to be AWARE of the world and what is going on. We have to read the news every day but we should not always take what people are saying at face value. The news is never a leading indicator but it can at times be an INVERSE indicator. Don't get played by big money "talking their position" ... In this video we look at examples of the last two years when the media hype was the OPPOSITE trade to take for... AMEX:GLD AMEX:USO AMEX:SPY NASDAQ:TLT
NASDAQ:TLT
by norok
2
PSTH: SUPERBULL BIASNothing much could be done to technically analyze PSTH given that it has a short historical data (just IPOed). However, given that it is a blank check company (SPAC) with potential to raise more capital to acquire long-term high growth companies and some hardcore value investor and highly intelligent men are behind this SPAC, we could only imagine the upside that PTSH shareholder might get. Looking forward to enter around 25 level and hold it for long term. DISCLAIMER: This is not an investment advice nor a buy call. This is just some analysis of based on some technical factors coupled with just a little or totally nonexistent fundamentals. This analysis is based on lagging (past) data (ie historical prices) thus any forward looking statement is just based on perceived highly probabilistic assumption(s) to assist personal trading decision.
PLong
by mdzulfid
Options Idea: Sell The Sep. 2020 PSTH/U Synthetic Covered CallIf you trust Bill Ackman, his new SPAC Pershing Square Tontine Holdings looks like a great candidate for a very short-term covered call position. Ackman has been on fire lately. Last year his flagship fund Pershing Square Holdings was up 58% and this year to date he’s up 46% after he turned a $27 million hedging position into $2.6 billion as markets tanked in March. What’s a SPAC? A SPAC (Special Purpose Acquisition Company) is a blank check company used to take a private company public. Instead of raising capital in a public offering, a private company can merge with a SPAC and get a guaranteed injection of cash at a predetermined price. Transaction costs and uncertainty are much lower. Management at a company looking to go public should prefer to go public via a SPAC as long as Ackman gives them the same valuation they would get from a traditional IPO. You can do this trade by simply buying 100 shares and then selling a call against it, but we did this trade synthetically using 3 options: Bought the March 18, 2021 $20 Call @ 3.90 Sold the March 18, 2021 $20 Put @ 1.75 Sold the September 18, 2020 $25 Call @ 0.35 Synthetic Covered Call A synthetic covered call is constructed by buying an at the money call and selling an at the money put and then selling another out of the money call. You get the same profit and loss graph as a normal covered call, but with no dividends (not a problem here) and with reduced capital outlay. PSTH.U closed at $21.83 on the day of our trade, so instead of using $2183 in cash for 100 shares, we used $862 in margin and took a position twice as large as our normal position size by going synthetic for the same capital outlay. We sold a short-dated out of the money call to help reduce our initial cost basis to the current trading price of PSTH/U, since the March 2021 options don’t have much liquidity. We may sell a few more covered calls against this position to bring our cost basis down to $20, which was the price of the SPAC's IPO and the redemption value of the SPAC's cash in trust. Redemption Value : PSTH.U shareholders have the option to redeem their shares for the $20 IPO price after the merger is announced. Let’s assume the market doesn’t look favorably on Ackman’s deal, PSTH.U shareholders can redeem their shares for $20 and exit before the merger is completed. Read the full prospectus for details (including scenarios where you might get less than $20, its complex). However, for us, this puts an effective floor on PSTH.U’s value at $20. If we want to stay conservative (and we are), we’ll sell calls to get our cost basis closer to $20. However, if you are bullish on Ackman like we are, we do not recommend selling calls against this position for an extended period. If a merger announcement is positively received by the market, the price will gap up instantly as investors realize they can immediately participate in the newly merged company’s equity via a position in PSTH.U. Those of us invested in PSTH.U have looked on in envy as KCAC (another SPAC) just struck a deal to take Quantumscape (an EV battery-maker) public. Shares in KCAC closed up 87% the day after merger news. This is why you don’t want to be stuck with a short call in PSTH.U when the merger news comes out. If the news is extremely positive, you might give up a huge windfall. Since SPACs have a limited lifespan, 2 years usually, as time continues it becomes increasingly dangerous to have a short call open on PSTH.U if your ultimate goal is to have a long position in Ackman’s merger pick. Our objectives for short call income generation against this position are as follows: Initial Objective: $0.32 (Recover Liquidity Loss) Secondary Objective: $1.83 (Reduce cost basis to the Redemption Value) We completed our initial objective by selling the Sep 18, 2020 call at $0.35 and we entered this trade $0.03 below the cost of going long. Again, our goal here is simply to increase our buying power on a trade we consder low-risk due to the redemption option. We may continue to sell calls for a limited time until we get our basis to $20. We don’t want to have a long call open at the time the merger is announced. 20-PSTHU-01 Opening Date: Sep 4, 2020 Expiration Date: March 19, 2021 DTE: 196 IV: 33.29% IV Percentile: N/A (less than 1 year trading) Odds of Winning: 54.55% Odds of Losing: 45.45% Win: > 21.80 @ Expiration Loss: < 21.80 @ Expiration Reg-T Margin: $862 Chart Legend Green Area: 100% Win Zone. If we finish above or in the green area, we’ve made a profit on our synthetic covered call. Since our position has a long call that means our potential gain is unlimited after Sep 18, 2020. Up to Sep 18, we are limited in our gain by our short $25 call. Red Area: If we finish in this area we have a loss. The size of the red area is the size of our maximum loss. Since we’ve sold a naked put we have losses all the way to $0. 1 standard deviation, 2 standard deviation, 3 standard deviation projections from Opening Date to Expiration Date are included.
PLong
by OptionsCoach
XLV ShortYou can thank that little price hiking hedge fund manager and people like Bill Ackman for the Healthcare/Pharmaceutical correction. Looking at the weekly using Fibs as reference points i believe healthcare over the next few months will begin to sell. I have a target of the 1.618 extension of 59.76 and a second target of 53.31. I'm using XLV to short because everything else is too expensive... you can play this through ITM puts or buy a longterm out of the money put at a 62 or 60 strike for next year. Feel free to leave comments or questions. -Ryanhasoptions.
AMEX:XLVShort
by Ryanhasoptions
Large Call Rollout In APD Bets On $165+ By SeptemberAir Products and Chemicals shares have been trading in a nice uptrending channel for nearly two years. However, for those looking to buy APD it is not an ideal time right now. The stock is now near the top of the channel (RSI near highs as well) and could be setting up for a pullback to mid to high $140's in the coming weeks (major support at the 40-week SMA). On Friday, someone rolled out 2,460 June $145 calls ($13.70 credit) into 2,460 Sep $155 calls ($9.50 debit). He/she is taking some profits on the recent 5 week rally, but still thinks APD can rise north of $165 by September options expiration. 5,010 calls traded vs the daily average of just 976 calls. Shares trade at a P/E ratio of 21.27x (Sep16 estimates) with 12.9% EPS growth, P/S ratio of 3.21x, and a P/B ratio of 4.57x. Revenue is likely to grow in the low single digits this year and accelerate to 6%+ in FY16. Hedge fund manager, Bill Ackman, owns more than 20M shares (nearly a 10% stake) and believes the stock price could be worth more than $200 under the right management.
NYSE:APD
by MitchellKWarren