Talking Stocks 2.0

[jaisonline]

“*Coty Agrees to Sell Partial Stake in Wella to KKR

*Coty to Sell Stake at 50% Valuation Premium Vs Initial Wella Sale in Exchange for Half of Preferred Coty Shrs Owned by KKR”

[7sins]

Originally Posted by spurwar

From my Fidelity news feed - someone has some serious stones. Is this you 7sins? :)


$1.8M Feb call buyer in Coty Beauty Products (TheFlyOnTheWall)
THE FLY 3:10 PM ET 9/30/2021
$1.8M Feb call buyer in Coty Beauty Products. Shares little changed this afternoon at $7.89 with calls leading puts 13:1 and Feb 9 calls making up most of the flow. Largest block printed on the Amex floor, where a customer paid 73c for 25575 contracts as shres traded $7.83, following a number of earlier nibbles from 68 to 71c. Total of 31k on the tape, vs 615 contracts open, creating a significant position at the 14% otm strike.

Originally Posted by jaisonline

“*Coty Agrees to Sell Partial Stake in Wella to KKR

*Coty to Sell Stake at 50% Valuation Premium Vs Initial Wella Sale in Exchange for Half of Preferred Coty Shrs Owned by KKR”

Haha Spurwar, that is one too many zeros for me. You guys don't find it INCREDIBLY suspicious that large option trade was placed the day prior to the Wella sale? Must be nice! If you guys look under the hood, it was actually a great deal and financial prudence on Coty's part to reduce debt. It will result in additional $26m in annual dividend cash savings. Disappointing we couldn't hold the open price on high volume but still a great 4% day, should be good gains for those who got in under $8.

Great day for a lot of our trades today.
SABR +6%, POSITIVE on the week after a terrible week for the market, solid strength here, marching back to $13. Those buys under $10 are printing. Been slowly creeping up here on no news and decent volume, the tsa numbers are vastly improving too. Fingers crossed we get to $15 EOY.
SOFI +3.6% feel great about that add yesterday, nice recovery today
UP + 14%! Finally some momentum here, warrants trading +25%. Price movement was from Credit Suisse starting coverage with a buy and 100% price premium at PT $14. I think next Q3 ER should be in for a big earnings surprise given the surging demand for private jets (https://www.cnbc.com/2021/10/01/priv...he-system.html). Finally net net zero here, will hold and evaluate until next ER but won't take much to get this low float stock moving quickly. Been contemplating leaps here but just have no liquidity or enough OI yet as the chain just opened. Good SA article here: https://seekingalpha.com/news/374703...rom-delta-deal

Have a great weekend everyone, a few tequila shots are in order for some of the recoveries finally paying off.

[logo]

Originally Posted by 7sins

Haha Spurwar, that is one too many zeros for me. You guys don't find it INCREDIBLY suspicious that large option trade was placed the day prior to the Wella sale? Must be nice! If you guys look under the hood, it was actually a great deal and financial prudence on Coty's part to reduce debt. It will result in additional $26m in annual dividend cash savings. Disappointing we couldn't hold the open price on high volume but still a great 4% day, should be good gains for those who got in under $8.

Great day for a lot of our trades today.
SABR +6%, POSITIVE on the week after a terrible week for the market, solid strength here, marching back to $13. Those buys under $10 are printing. Been slowly creeping up here on no news and decent volume, the tsa numbers are vastly improving too. Fingers crossed we get to $15 EOY.
SOFI +3.6% feel great about that add yesterday, nice recovery today
UP + 14%! Finally some momentum here, warrants trading +25%. Price movement was from Credit Suisse starting coverage with a buy and 100% price premium at PT $14. I think next Q3 ER should be in for a big earnings surprise given the surging demand for private jets (https://www.cnbc.com/2021/10/01/priv...he-system.html). Finally net net zero here, will hold and evaluate until next ER but won't take much to get this low float stock moving quickly. Been contemplating leaps here but just have no liquidity or enough OI yet as the chain just opened. Good SA article here: https://seekingalpha.com/news/374703...rom-delta-deal

Have a great weekend everyone, a few tequila shots are in order for some of the recoveries finally paying off.

Can’t complain about the close today that’s for sure. Thank the lord UP is moving haha. The thing seems so undervalued to me. I’m in shares and below my cost basis currently but not worried. I’ve also been keeping an eye on leaps to convert into but similarly feel there isn’t much OI yet.

Wild day for COTY - up 10%, then 2% then 4% lol. Still very surprised this is not trading near 11-12, but I feel like it won’t be long before we get there.

[huncho]

so anyone buying the dip here? personally afraid to touch anything so just put a little more into fedex and coty

[7sins]

Originally Posted by logo

Can’t complain about the close today that’s for sure. Thank the lord UP is moving haha. The thing seems so undervalued to me. I’m in shares and below my cost basis currently but not worried. I’ve also been keeping an eye on leaps to convert into but similarly feel there isn’t much OI yet.

Wild day for COTY - up 10%, then 2% then 4% lol. Still very surprised this is not trading near 11-12, but I feel like it won’t be long before we get there.

Totally on point with you. If you want one WAY out there, look at YSG, they are basically the COTY of China but with even better brands. They own the TOP brands there. Like all Chinese stocks they have taken an absolute beating from 25 to 3 but when you look at the brands and momentum, certainly not at FV. Or they delist and lose all your money haha. I'm still doing my research here.



Everyone else needs to read this https://www.reuters.com/business/aer...es-2021-10-03/

Flew, no pun intended, WAY under the radar. CEO Delta Bastian said domestic travel bookings are expected to surpass 2019 levels next year.

The company is also seeing a surge in demand for trans-Atlantic flights after the White House's decision late last month to reopen the country to fully vaccinated travelers from around the world. elta Air Lines (DAL.N) said that its ticket sales had stabilized and started to improve, putting it on course to deliver third-quarter revenue within its original forecast range.

"For Delta, they bottomed out in the later part of August and the first part of September,". This is all VERY good news when we think about the travel rebound, what is happening behind the scenes AND I rea Thanksgiving bookings are already up 50%. I will see you SABR at $15 and will be rewarded for being beaten down for months now.

[austinp]

I bought Friday and today. Mostly DFH.


Sent from my iPhone using Tapatalk

[beshannon]

Originally Posted by huncho

so anyone buying the dip here? personally afraid to touch anything so just put a little more into fedex and coty

Not with the default on US Debt happening

[7sins]

Originally Posted by beshannon

Not with the default on US Debt happening

I believe you will see volatility around the possibility of the US defaulting, which happens every year around this time. The broad implications of the US defaulting on their debt would cause a catastrophic chain of events including immense and systemic stress on the banking system, our debt would be downgraded and possibly the dollar loses its reserve currency status. I firmly believe, while putting all political thoughts aside, that there is no chance the government would let this happen. Everyone wants to be a last minute hero but I don't see what world where the US defaulting could be a reality.

Fortunately there's an easy way to defuse this that no one is talking about. There doesn't actually need to be a vote at all. The Secretary of the Treasury can mint a trillion dollar platinum coin, purchase $1 trillion worth of debt from the Fed, retire that debt, and then create breathing room under the debt ceiling. It's legal and it would solve the problem of a catastrophic default and potential associated recession.

Just my .02 of course but I HOPE they push it close to the deadline so I can buy on heightened volatility.

[beshannon]

Originally Posted by 7sins

I believe you will see volatility around the possibility of the US defaulting, which happens every year around this time. The broad implications of the US defaulting on their debt would cause a catastrophic chain of events including immense and systemic stress on the banking system, our debt would be downgraded and possibly the dollar loses its reserve currency status. I firmly believe, while putting all political thoughts aside, that there is no chance the government would let this happen. Everyone wants to be a last minute hero but I don't see what world where the US defaulting could be a reality.

Fortunately there's an easy way to defuse this that no one is talking about. There doesn't actually need to be a vote at all. The Secretary of the Treasury can mint a trillion dollar platinum coin, purchase $1 trillion worth of debt from the Fed, retire that debt, and then create breathing room under the debt ceiling. It's legal and it would solve the problem of a catastrophic default and potential associated recession.

Just my .02 of course but I HOPE they push it close to the deadline so I can buy on heightened volatility.

I like the analysis and respectfully disagree. I do not want to get the thread closed so I will avoid the forbidden topic. I am putting on protection as we speak.

[logo]

Originally Posted by beshannon

I like the analysis and respectfully disagree. I do not want to get the thread closed so I will avoid the forbidden topic. I am putting on protection as we speak.

May I ask what your hedge strategy is and your degree of conviction on it? I see there are two possible outcomes to the debt issue, one being very bad. Other than political analysis which we can’t do here, it would seem to me that anticipating the outcome either way is speculation. I’m inherently an optimist, so I lean more towards the idea that this will blow over and thus a dip buying opportunity may be upon us (again politics aside, just speculation); however, is there a hedge opportunity that you see with some downside protection should the worst occur vs minimal losses on that hedge should the issue be resolved?

[huncho]

Originally Posted by logo

May I ask what your hedge strategy is and your degree of conviction on it? I see there are two possible outcomes to the debt issue, one being very bad. Other than political analysis which we can’t do here, it would seem to me that anticipating the outcome either way is speculation. I’m inherently an optimist, so I lean more towards the idea that this will blow over and thus a dip buying opportunity may be upon us (again politics aside, just speculation); however, is there a hedge opportunity that you see with some downside protection should the worst occur vs minimal losses on that hedge should the issue be resolved?

i would also be interested in knowing what a potential hedge is because i don't see anything good that can come out of it. i'm also optimistic and hope that it's just political right now but will blow over. one thing i did notice is that yesterday was the first time in months that bitcoin disconnected from traditional markets though. will be very interesting to see if that continues as money will start to pile in there which otherwise wouldn't because it so strongly followed nasdaq and s&p sell offs almost all year (aside from jan-march). i also know crypto is a hated topic here but just my observation and something that would be interesting to keep an eye out on with stocks behaving the way they have been recently

[7sins]

If you want an inexpensive hedge, look at puts on SPXL, which is 3x sp500. Jan 2022 ATM $110 is only $12. Gives you three months and if you really believe there is going to be high vol those will be in the green and you can sell before the market recovers.

Or buy calls on the VIX and play vol that way.

[huncho]

Originally Posted by 7sins

If you want an inexpensive hedge, look at puts on SPXL, which is 3x sp500. Jan 2022 ATM $110 is only $12. Gives you three months and if you really believe there is going to be high vol those will be in the green and you can sell before the market recovers.

Or buy calls on the VIX and play vol that way.

i was actually always wondering about this. is it worth buying calls/puts for leveraged etfs? the premiums are adjusted for the leverage right? or do you still come out on top over just using the regular etf

[honuswagner13]

Originally Posted by 7sins

If you want an inexpensive hedge, look at puts on SPXL, which is 3x sp500. Jan 2022 ATM $110 is only $12. Gives you three months and if you really believe there is going to be high vol those will be in the green and you can sell before the market recovers.

Or buy calls on the VIX and play vol that way.

Any thoughts on holding SQQQ or UVXY for a short period as a hedge?

[hkuo]

Question for 7sins and others holding BBIG. I’m somewhat confused with how the stock has been trading lately. With the upcoming TYDE spin-off dividend, shouldn’t the stock be going up?

[huncho]

Originally Posted by hkuo

Question for 7sins and others holding BBIG. I’m somewhat confused with how the stock has been trading lately. With the upcoming TYDE spin-off dividend, shouldn’t the stock be going up?

a lot of it is due to poor management imo. all the details they're promising to release about share dilution, spinoffs and dividends is nowhere to be found and the dates they're giving go by with no info. from what i see it did get diluted a bit but i still believe the stock's fair value is around $12-15 currently. my biggest worry is holding through until the spinoff starts trading because i believe the value of bbig's stock will take a hit as part of a spinoff but i could be wrong about how that works. i believe the sell off today is due to the record spinoff being delayed (although its only by a week for now)

i still think it has a good future, tory lanez sold 1 million copies of his album within 60 seconds through their subsidiary which should reflect well for their nft businesses but no one seems to be talking about it

[logo]

Originally Posted by huncho

a lot of it is due to poor management imo. all the details they're promising to release about share dilution, spinoffs and dividends is nowhere to be found and the dates they're giving go by with no info. from what i see it did get diluted a bit but i still believe the stock's fair value is around $12-15 currently. my biggest worry is holding through until the spinoff starts trading because i believe the value of bbig's stock will take a hit as part of a spinoff but i could be wrong about how that works. i believe the sell off today is due to the record spinoff being delayed (although its only by a week for now)

i still think it has a good future, tory lanez sold 1 million copies of his album within 60 seconds through their subsidiary which should reflect well for their nft businesses but no one seems to be talking about it

I was curious about the spinoff component in terms of options - my understanding is that with a spinoff the options contract values are adjusted to reflect the combined value of the original and spun-off companies, so we should not lose options value.

[huncho]

Originally Posted by logo

I was curious about the spinoff component in terms of options - my understanding is that with a spinoff the options contract values are adjusted to reflect the combined value of the original and spun-off companies, so we should not lose options value.

that's interesting and good if that's the case. they were supposed to release the investor deck "on or around 10/4" but again it's 2 days past that and nothing so far lol. hopefully that will be a catalyst to get this thing moving up a bit. i personally don't get how it's trading at a 500m market cap right now

edit : nvm, see some details have come out for tyde today

[7sins]

Originally Posted by huncho

i was actually always wondering about this. is it worth buying calls/puts for leveraged etfs? the premiums are adjusted for the leverage right? or do you still come out on top over just using the regular etf

Absolutely but typically you only want to use leveraged ETFs for short term trades not a long term hold. This is for various reasons but remember leveraged strategies always carry a much higher fee. Thus the market can go sideways but since you have a higher fee you can end up losing money on the trade. Also remember typically when these strategies deploy leverage, the cost to borrow capital is based off of floaters, thus if rates rise, your cost to borrow capital rises which then also subtracts from performance. With 3x leverage, when you think about sequence of returns, can quickly get out of hand. All of a sudden, underlying benchmark is down 10 but the etf is down 30% and you can be underwater very quickly. That is why I mentioned you want to use them as a short term trading vehicle and or if you are taking advantage of a dislocation or oversold market. You can use various option strategies on these leveraged etfs for either vol control or principal protection or capital appreciation.

With the one caveat being TBT which we've discussed many times in the past and is my personal hedge against rising rates.

Originally Posted by honuswagner13

Any thoughts on holding SQQQ or UVXY for a short period as a hedge?

Would not buy any etf that tracks the VIX as no etf can accurately replicate the movement in the VIX. Look at VIX etfs and overlay the moves in underlying VIX, you typically do not have a high correlation. You would be much better off buying options on VIX but those can get pricey in times of uncertainty.

Originally Posted by hkuo

Question for 7sins and others holding BBIG. I’m somewhat confused with how the stock has been trading lately. With the upcoming TYDE spin-off dividend, shouldn’t the stock be going up?

I think Huncho/Logo is spot on, you have had a lack of PR, poor management and continuous delays has caused negative investor sentiment. Also a large part of the volume is gone, many of the swing and day traders are out of the stock given its perpetual decline over the last two weeks. This is why I always mention trimming gains along the way up. I still have a large position here, going to see how the next few weeks shake out but getting to the point where I would rather allocate the capital elsewhere. Which I am sure as soon as I sell the stock will shoot up lol.

[huncho]

Originally Posted by 7sins

I think Huncho/Logo is spot on, you have had a lack of PR, poor management and continuous delays has caused negative investor sentiment. Also a large part of the volume is gone, many of the swing and day traders are out of the stock given its perpetual decline over the last two weeks. This is why I always mention trimming gains along the way up. I still have a large position here, going to see how the next few weeks shake out but getting to the point where I would rather allocate the capital elsewhere. Which I am sure as soon as I sell the stock will shoot up lol.

i (stupidly as always) didn't take profits on it because of all the upcoming catalysts/news, as well as the insane call volume and open interest, at the time when it was ranging between 9-12 and now it's at the point where it's gone down so much that i don't want to get out at what hopefully is the bottom. i really do hope they right the ship in the next few weeks and some movement comes back into the stock. and like you said once you sell it'll fly up. had that happen to me way too much so i just wanna see this through lol

[chsu74]

Originally Posted by 7sins

With the one caveat being TBT which we've discussed many times in the past and is my personal hedge against rising rates.

I kick myself for not buying more when it was trading around 16.70-16.80 few weeks back. Figured if Powell has not announced bond buyback date will give me another wack at it. Heres to hoping the Fed will manipulate the rates a bit more so I can load up.

[logo]

NET is an absolute unit

[hkuo]

Originally Posted by huncho

i (stupidly as always) didn't take profits on it because of all the upcoming catalysts/news, as well as the insane call volume and open interest, at the time when it was ranging between 9-12 and now it's at the point where it's gone down so much that i don't want to get out at what hopefully is the bottom. i really do hope they right the ship in the next few weeks and some movement comes back into the stock. and like you said once you sell it'll fly up. had that happen to me way too much so i just wanna see this through lol

Same on everything including not taking profit on BBIG lol. I literally sold my small amounts of BTC and ETH the day before they started their recent run.

7sins, I bought the options book you previously recommended. Going to start reading it tonight.

[huncho]

Originally Posted by hkuo

Same on everything including not taking profit on BBIG lol. I literally sold my small amounts of BTC and ETH the day before they started their recent run.

7sins, I bought the options book you previously recommended. Going to start reading it tonight.

lol that's the way it always goes. btc is by far my biggest bag out of everything and i'm not touching it for the foreseeable future (3+ years) unless it goes absolutely crazy before then. i've been in since ~3k and have no intention of selling

[hkuo]

Originally Posted by huncho

lol that's the way it always goes. btc is by far my biggest bag out of everything and i'm not touching it for the foreseeable future (3+ years) unless it goes absolutely crazy before then. i've been in since ~3k and have no intention of selling

That’s awesome and congrats!! BBIG is up 25+% premarket at the moment. I’ll try and trim some of my Jan 23 $10c if this carries through to market open.

[huncho]

Originally Posted by hkuo

That’s awesome and congrats!! BBIG is up 25+% premarket at the moment. I’ll try and trim some of my Jan 23 $10c if this carries through to market open.

yeah they announced that they acquired an ad tech company

https://finance.yahoo.com/news/adriz...120000096.html

looks like it's already faded out lol, up 8%. still good but the way this stock trades it's not a great sign as it usually bleeds all day after premarket action. hopefully closes around these levels and starts to gain some momentum

[7sins]

Originally Posted by chsu74

I kick myself for not buying more when it was trading around 16.70-16.80 few weeks back. Figured if Powell has not announced bond buyback date will give me another wack at it. Heres to hoping the Fed will manipulate the rates a bit more so I can load up.

You and me both brother, I was waiting for it to dip into the low 16s to average down but never had the opportunity and now we are getting close to 19. Hoping we see a retreat back to the 17s so I can add more exposure here. Just remember this is an inverse 20yr which is a different part of the yield curve than the 10yr and also has different mechanics that shape the slope so you won't see an even move across the curve. Either way, one of the best ways to profit when rates rise. Earnings season is starting shortly, I think Delta is going to have a bigger impact on a lot of earnings than most believe so that should temporarily cause rates to retreat. Once the FED announces tapering either Nov/Dec I suspect we receive a knee jerk reaction and rates will overshoot until they stabilize as foreign money comes in. Should be a nice profit.

Originally Posted by hkuo

Same on everything including not taking profit on BBIG lol. I literally sold my small amounts of BTC and ETH the day before they started their recent run.

7sins, I bought the options book you previously recommended. Going to start reading it tonight.

Remember it is a textbook which is inherently written to put you immediately to sleep and or a nice drink holder. Take your time on the first few chapters, it is a lot of granular definitions but it provides a strong foundation to understand the internal workings to options and a strong initial understanding will be imperative as the book delves into more complex option strategies later on. Either way I think you will walk away with a much better understanding of how to trade options.

[chsu74]

FYI

Ocean freight rates are starting to come down from Asia as Holiday season shipping pass. Higher costs are baked in on imported merchandise until early 1st qtr 2021. China is experiencing rolling black outs due to lack of coal to produce energy from their spat with Australia. Freight volume should ease..

https://www.freshplaza.com/article/9...-rates-plunge/

Manufacturing woes create new headaches for shippers
China-US spot freight rates plunge
Shippers might finally be catching a break, as China-US spot freight rates plunge in the first week of October. With Chinese manufacturers throttling production due to the power crisis and the off-season coming into view, competition for freight capacity in terms of containers and vessel space has fallen off, moving prices down by up to 51.4 percent on some routes.

Data provided by digital freight forwarding company Shifl shows that the spot rate for shipping a 40-foot container from China to Los Angeles dropped by $9,000, or 51.4 percent between September and October of this year, from a high of $17,500 to $8,500.

Development of shipping rates from China to Los Angeles.

For China-US East Coast shipping, rates dropped by 28.2 percent in one month, down to $14,000 per container in October from $19,500 in September.

Development of shipping rates from China to the US East Coast.

Temporary relief?
However, this temporary reprieve could soon be overshadowed by a growing backlog of unfulfilled orders. Chinese energy rationing policies and the impact of COVID-19 shutdowns are throttling factory output meaning that US and EU manufacturing orders are not being filled on time. While US and EU businesses scramble to diversify their supply chains, inventory shortages and price increases will become more pronounced.

“Before the pandemic, our customers were getting containers shipped for around $1,500,” said Shabsie Levy, Founder, and CEO of Shifl. “Some agents (co loaders) took advantage of the price increases and congestion by buying up capacity, and now they are looking to unload it as quickly as possible,” he added. “For shippers with inventory still in China, access to capacity at lower rates is great news. But the big question now is whether or not there will be products to fill these containers. These rates could go even lower. We’re already seeing long-term rates for shipping 40-foot containers from China to the U.S. go below $5,000,” added Levy. “

[MrGoat]

Anybody in BORR? I’ve been in for about a month, curious if anyone knows why it’s jumping.


Sent from my Apple privacy invasion product

[huncho]

morgan stanley gave sofi a buy rating with a price target of $25. nice to see some green again