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jimjackandjose
Member since Jun 2011
5161 posts

re: General Lee's NVVE
I got back in at 11.59.

Still wanting to run hard. Market is funky though

I'll call it even for barf lol


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Thanks appreciate it! Yeah if bitcoin hadn’t crashed BFARF would’ve been a two bagger. On to the next stock in NVVE. Feels much more comfortable to be in stocks where the Biden administration will be friendly to (STLHF, NVVE) as opposed to crypto where the hammer is coming down at some point with regulations.


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GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
I just rolled my $15 covered calls this morning and then sold covered calls at a $22.5 strike in November for $2/share. Holy crap the implied volatility is insane at that premium. So I've lowered my cost basis on my commons to ~$5.50/share now with the covered call premiums...


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
quote:

~$5.50/share now with the covered call premiums...


Wow that is awesome!


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
This is an insane arbitrage opportunity. So you can sell a covered call at a $22.5 strike in November for ~$2/share, while you can buy a warrant at an equivalent $3.20 (adjusted for 2:1 ratio) per share at a $11.5 strike with 5 years until expiration. Holy crap there are some dumb option buyers out there.

So a good play here (admittedly levering up your risk) is to buy commons, sell covered calls, then buy warrants with the covered call premiums.
This post was edited on 5/19 at 10:14 am


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
Compelling trade - I am in.... covered calls at $1.95 and $2 for $22 in November (that is insane).

Used about 65% to buy options. Taking the rest as a reduction effectively of common.



GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
If these option buyers knew about the warrants they’d be like 2-3x higher, haha.


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
How many of the 379 options traded are yours? LOL


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
The vast majority....


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
LOL Bloody brilliant! I am a measly 29.


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Hey if it hits $22.50 by November, I’ll pay the tax man short term cap gains. Good problem to have at that point. 325% return on my money in six months.


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
I have to ask General does the user name DeSantis_2024 relate to you or do you have a doppleganger over there?


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Yeah that’s me


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GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Check out my thread on Spire Global while you’re at it. Loaded more warrants at $1.23 there this morning.


Got Heeem
Georgia Southern Fan
Georgia
Member since Sep 2012
3631 posts

re: General Lee's NVVE
Can y'all explain exactly what you're doing in laymans terms and strategy?

I see the calls for nov at around $2...I see the warrants for $1.58.

Help me make sense of what you're doing here.


igoringa
LSU Fan
South Mississippi
Member since Jun 2007
11671 posts

re: General Lee's NVVE
NSH has been on my list.... I will start dipping my toe.


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GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Call options are insanely high priced while warrants are very cheap, comparatively. So you want to sell the expensive derivative and buy the cheap one. So sell calls (I’m doing covered calls but theoretically you could do naked calls) and buy warrants and you’re locking in a profit pretty much regardless of what the stock price does (if you sell naked calls).

So in this example we sell $22.5 November calls and use those premiums to buy $11.5 strike 2:1 warrants at $1.60. Worst case you lose your call premium if warrants expire worthless. In perfect world, NVVE waits until after November to go above $22.5 and then you hit the jackpot as calls expire worthless and warrants print.
This post was edited on 5/19 at 1:00 pm


Got Heeem
Georgia Southern Fan
Georgia
Member since Sep 2012
3631 posts

re: General Lee's NVVE
quote:

So you want to sell the expensive derivative and buy the cheap one.
So you sell the calls later down the line and but the warrants now?

Also, are you buying equal $$ amount of each for this play?

I know this is a hedge to basically win at a high percentage, but I want to play it right.


GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Sell calls and buy warrants now. If it’s just an arbitrage play then equal $ of sold calls and bought warrants. I’m holding NVVE commons (so selling covered calls) so I still have some downside risks.


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GeneralLee
LSU Fan
Member since Aug 2004
11533 posts

re: General Lee's NVVE
Good PR out after hours about launching V2G in Denmark. Sky’s the limit!


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