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[CLOSED] – SPCE Put Sales

March 5, 2021 By Steven Place

Bubble? What bubble?

SPCE has round-tripped its most recent parabolic rally. Momentum traders who are still holding out are puking, and anyone who bought the dip early are taking some serious heat. I want to fade this move, anticipating that the downside risk is a little bit overpriced.

Nothing has changed with respect to the stock. Earnings… well, they lost money but everyone new that. This is more just a proxy-momentum-breakdown that is occuring with many other names as well.

Here’s the trade setup I like:

Very simple premise here. Currently the stock is crashing and coming back to the topside of its earnings trading range. I’m very OK with owning SPCE at a basis of 17.80.

Here’s what it looks like on the chart:

Always the possibility I’m early, so look to add on the name if it trades into the 22s.

If you want to manage your margin a little better, you can buy the 15 put and convert it to a bull put spread.


Update, March 15th, 2021

Closing out the trade.


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