· wrinkle brain plays · 3 min read

Wrinkle Brain Plays

Plays for Execution on April 12, 2023. In the style of Gordon Ramsay.

Plays for Execution on April 12, 2023. In the style of Gordon Ramsay.

Tickers of Interest - TL;DR

Gamma Max Cross

  • MARA 05/19 10P for $1.55 or less
  • STNE 05/19 10P for $0.50 or less
  • UCO 05/19 29P for $1.65 or less
  • ARLP 05/19 20P for $0.85 or less
  • AAP 05/19 120P for $3.90 or less

Delta Neutral Cross

  • BILI 05/19 22C for $1.80 or less
  • HAL 05/19 34C for $1.55 or less
  • KMX 05/19 70P for $2.45 or less
  • ABT 05/19 100P for $1.50 or less
  • CSX 05/19 30P for $0.80 or less

Trading Thesis - Why These Crayons Are Tastier Than a Michelin Star Meal 🌟🖍️

If you think technical analysis and indicator-based trading are as dull as dishwater, you’re in for a treat! We’re using past price performance to predict price levels today, just like how I predict my next insult in Hell’s Kitchen.

Our analysis uses option open interest to whip up a tasty concoction of portfolio-level greeks—Delta and Gamma. Once we’ve got those, we can simulate how they change at different price points. Then we find the sweet spot where portfolio-level gamma is sky-high and delta is close to zilch. 🎯

For some tickers, the underlying price reacts like a soufflé on a trampoline off delta neutral, gamma max, or both. We’re using these reactions to drive trading signals that’ll make you richer than a chocolate lava cake. 🍫

Our plays and target entry prices are calculated using a binomial option pricing model, reflecting the expected size and duration of reactions from gamma max or delta neutral. Most of these plays are more profitable than a restaurant during Restaurant Week. The best ones benefit from both the directional move and the increase in IV.

Notes - Tips to Make You Smarter Than a Kitchen Sponge 🧽

  • If the price has moved past the entry price, be careful! Something’s changed since these plays were generated, and it might not be as tasty as it was before.
  • Sell half your position on a double, and freeroll the rest like a master sushi chef. 🍣
  • I risk up to 1% of my total capital on trades. If I’m feeling less confident, I’ll only risk 0.5% or 0.25% and dollar cost average in.
  • Trades were calculated before market open, so they’re based on yesterday’s info. Keep that in mind if you’re entering late, as new price movement may spoil the original thesis.

FAQ - Questions You’ve Already Asked, You Donkey! 🐴

  • These plays are mostly puts. Are you a gay bear? 🌈🐻
    • No. The companies just had a run-up that makes them look overextended, like a soufflé that’s about to collapse. These trades are mean-reverting toward or away from important price levels.
  • Are you entering all these plays?
    • No. There’s been a shortage of plays in the WSB morning talks, so I’m sharing more plays with a probable edge to help you apes get that gain porn. Pick your favorites, and let the gains flow! 🦍💰
  • You mentioned a new play on the same ticker in the past. What does that mean?
    • The new play replaces the old one. The old play is now as useless as a dull knife. Don’t chase the price—remember, a new day’s worth of data has been produced.
  • Where are the crayons? I only see words. 🖍️
    • Click the links above, you muppet!
  • Have you back-tested this?
    • Yes. Results show a moderate Sharpe Ratio (1.76), with an expected win rate of 63% of trades (7% margin of error) – not too shabby!
  • What is the historical performance?
    • The realized Sharpe Ratio is 1.85 with a 68% win rate. Based on the trade performance so far, there’s a 95% chance the expected win rate will be between 63% and 75%. (Stats as of 2023-03-31) Now go make some money, you donut! 🍩
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