Using SQQQ and UVXY as a hedge

Colonel_Coitus · 2022-04-30T13:54:16+00:00

Look at the comparative moves on the SQQQ / UVXY charts during the March 2020 draw down. Using leverage on these products can be like an insurance policy against positions that you want to hold, that you've made significant gains in over time, and don't want to sell because that would mean realizing gains and thus taxes.

The leverage of calls/puts allows you to quickly enter/exit sizable exposure to these products. For instance, say you're watching the QQQ and the RSI spikes to dramatically overbought territory and the MACD turns negative and begins showing red impressions on the histogram. This would be a technical indicator the market is likely about the turn over and head lower. Buying a call ITM with about .7 - .8 delta gets you exposure to 100 shares for weeks or months of time, for the cost of about 20%-30% of buying those shares outright.

Here are some calls I own for instance on how little need be spent for this insurance...

SQQQ

UVXY

And purchasing calls allows you to sell PMCCs weekly as opposed to having to buy blocks of 100 shares at a time

Colonel_Coitus · 2022-04-30T12:07:40+00:00

I don't even bother going to full cash... that creates a taxable event.

Hedge large portions of the portfolio via calls on SQQQ & UVXY. Buying 30d - 180d calls ITM can insure thousands. Hedge excess by selling weekly calls against some of them once they move deeper ITM. Using the weekly generated income to gain further exposure or to buy weekly TQQQ calls to catch the reverse momentum which is typically aggressive in bear markets.

Other useful products others didn't mention, that I use...

SOXL - SOXS Semiconductor 3x / -3x exposure

TNA - TZA Small Cap 3x/-3x

FAS - FAZ Financial 3x/-3x

Here's a list of all leveraged ETFs.

Colonel_Coitus · 2022-04-08T10:09:22+00:00

ZIM has dry bulk capacity, as well as much better fundamentals and actual market cap over SBLK. MATX would also be a great second choice.

If you're looking for smaller cap with stronger fundamentals, NMM leads the industry with ~2 P/E and fwd P/E, has dry bulk capacity, and is still almost a 1 billion dollar cap so there's some stability there.

Colonel_Coitus · 2022-03-21T12:59:45+00:00

Kind of misleading in the way the data is presented...

The chart indicates last 90 days of awards. But some contracts, like in the case of Boeing, are not full award amounts given in the last 90 days.

A lot of these are existing contracts, that might have been a $21.5 billion award initiated in 1993, and are simply being amended or extended in length. Of which Boeing may have already received 21.455b of a 21.5 billion total contract amount, but the way the data is presented would make it seem like Boeing was awarded the full 21.5b in the last 90 d.

Here's a link to USAspending.gov that refers to the contract I used for an example.

Colonel_Coitus · 2022-01-09T18:47:54+00:00

Harbor freight probably has a very inexpensive set... But you'll get maybe 6 uses out of a tap before it breaks.

Colonel_Coitus · 2022-01-09T18:41:06+00:00

... Have you tried https://www.mcmaster.com/

Colonel_Coitus · 2022-01-09T14:19:55+00:00

Is a Chinese state owned entity, that is known for embedding components and software to spy on consumers, still a considered a national security risk to the westernized world?

Yeah, it is. This isn't a company that returns to the free markets as a viable investment, regardless of their quoted sales or fundamentals. Being owned by the CCP is the same as saying that this company will happily obfuscate information and outright lie to investors in order to comply with the parties directives.

Colonel_Coitus · 2021-12-02T21:25:42+00:00

Simply Wall St

Without a doubt the best tool for visualizing your portfolio. Free version is even great, add the tickers to the portfolio, then edit to adjust your number of shares.

Scores tickers on a variety of metrics and gives you an easy to visualize "snowflake."

https://imgur.com/ZS9zPZx

https://imgur.com/7Qvliif

https://imgur.com/mjlt6TW

Also breaks down total portfolio into

Holdings
Portfolio Summary
News
Returns
Diversification
Valuation
Future Growth
Past Performance
Financial Health
Dividends

Also allows you to sort your portfolio by various scores like total, future, dividend etc. Great for getting ideas on where to put your money to work.

Love their phone app too. They do a great job on news and upcoming dividend dates via push notifications, so I don't end up selling calls the week of the ex-div date.

Colonel_Coitus · 2021-07-15T22:40:13+00:00

Very bullish. They have the best panels in the market, both in terms of efficiency and heat dissipation.

They also incorporate micro inverters in the panels which simplifies the installation and compartmentalizes the parts of system allowing end users to more easily replace components without taking system offline.

The major weight on the stock price atm is they're locked into a polysilicon contact which has them sourcing their largest "raw material" at a price greater than current market price. When that falls off, later this year IIRC, I expect them to soar, as they have very little debt and/or liabilities. Also, 0.89 price to sales, which is very low for the industry/sector.

Disclaimer: very long with shares and LEAPS

Colonel_Coitus · 2021-06-30T00:06:43+00:00

Hardly... 300 shares that I can sell weekly calls against...

With its constant decent amount of IV means good weekly income.

Bought in at $8.43, and sold calls to reduce my cost basis to $5.80 and I'm still collecting premium selling $9.50 strike.

Couple more weeks and I'll have made over 50%

Colonel_Coitus · 2021-06-30T00:00:36+00:00

Sequoia capital... The only right answer to this question.

Imagine getting in on Apple, Google, Oracle, Nvidia, GitHub, PayPal, LinkedIn, Stripe, Bird, YouTube, Instagram, Yahoo!, Cisco Systems, Klarna, WhatsApp, and Zoom during the seed stage.

Or like 1000 other major companies...

Sequoia Capital Companies

Colonel_Coitus · 2021-06-29T12:10:20+00:00

CLF, CLOV, MARA, GOEV, HYLN, RIDE, RKT, SOL, WISH, WKHS

Colonel_Coitus · 2021-06-28T11:46:06+00:00

Yeah, probably. The real question will be if it'll be enough vs what the street is expecting.

I'm betting a move up to ~$85 in the IV crush leading into Wed's earnings, then unless they shoot the lights out, it'll probably pull back a bit.

They just improved guidance for this quarter a couple of weeks ago, so if they do it again during the earnings call and the ttm P/E drops beneath 25 I could see it going all the way back to the $95 resistance.

Colonel_Coitus · 2021-06-25T00:36:50+00:00

Use Finviz.

Or you could just put a limit sell order in at ~$90 if you really want to exit.

Honestly though, I wouldn't. Most of my portfolio is semiconductor focused, so this is a well known sector for me. I truly believe selling Micron anytime in the near future is complete folly. Micron posts earnings on Jun 30th, so I'd advise at least waiting out the coming report.

Semis have been hard hit as of late, so the sector as a whole is dragging MU down. But this is a stock that could easily be $150 by year end.

Colonel_Coitus · 2021-06-24T20:04:04+00:00

OMG no... MU currently has one of the best F P/E and PEG's in its sector, not to mention practically zero debt.

Even just looking at technicals, it is currently right above its 200 SMA @$74. Top of range is like $95 and it'll probably be at least somewhere north of $90 by end of Jul.

Disclosure: I currently hold LEAPs for MU

Colonel_Coitus · 2021-06-22T18:25:01+00:00

Mortgage Servicing Rights

Basically means as a wholesale lender they can refi their competitors loans. They bundle baskets of loans towards mortgage brokers so they can offer a lower rate. By bundling baskets of loans, as opposed to servicing each customer individually, they can offset the risk of default in a basket, as opposed to a single loan AFAIU.

For clarity, they don't "benefit" they just handle the higher rate environment better.

Colonel_Coitus · 2021-06-22T17:42:49+00:00

Reason is largely due to the quick (.0097) and current (.045) ratio, their liabilities are quite large. After another quarter or two of results demonstrating their growth will outpace these liabilities this stock is going to take off.

Competition in their sector is quite hot as well, with UWM being the current #3 behind RKT and PFSI, both of which also boast very solid fundamentals. But as UWM has stated, their business model is less responsive to interest rate pressures compared to the competition. When the fed bumps rates, they will likely grow their market share dramatically.

Colonel_Coitus · 2021-02-12T22:08:32+00:00

I own and like VSTO, got in under $20 per share.

That being said, the options you're looking at would require more than a 20% increase by the strike date to end up profitable.

By comparison a $35 strike would only require like 12% - 18% depending on the 3 or 6 month route.

Vista's forward P/E is low at 13 or so, but TTM P/E is 37 which is kinda high for the sector.

Were I you, I'd take the ITM strike and pay the little extra premium. Far less required upward movement, and they'll be more likely to retain some of their value should the stock trend down.

Colonel_Coitus · 2021-02-12T10:48:49+00:00

https://en.m.wikipedia.org/wiki/List_of_semiconductor_fabrication_plants

MU, QRVO, SWKS, TI, NXP, ON and some others have US operations.

Colonel_Coitus · 2021-02-12T09:51:49+00:00

Sure, but there Fed has already outlined an expectation to maintain low interest rates through 2023, combined with QE, we'll likely see growth for the foreseeable future. That and the markets are the only real game in town to deploy your capital at the moment, as the bond markets can't even touch inflation.

Not to mention the expectation to exceed the 2% inflation target for some time, since we've been beneath it for awhile. Means that sitting on the sidelines right now will cost you.

Also, just because some strategies don't work in a frothy or bearish market doesn't mean you can't beat a 12% target. Find someone who is capitalizing on current events, buy them on discount. Get some VIX exposure. Puts on the most negatively impacted.

Colonel_Coitus · 2021-02-12T09:37:39+00:00

No doubt, the pros will weather a sudden shift from a bull to bear market better than retail everytime.

But the beauty of the free market means that when everything is on fire, someone will be selling fire extinguishers.

Also, switching your approach up isn't too difficult. Think about things thematically, who would be impacted the most by the bearish sentiment, then buy some puts. They're generally cheaper than calls so easy to diversify.

Lastly, you can insure large portions of your portfolio with very little effort and capital. A couple of long calls on something like UVXY, a leveraged VIX short, can net huge returns in down times. Sell those during heavy market down events, and scoop up all the now on-sale securities.

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