· wrinkle brain plays · 4 min read
Wrinkle Brain Plays
Plays for Execution on May 5, 2023. In the style of Gomez Addams
Tickers of Interest - TL;DR
Gamma Max Cross
- TLRY 06/16 2.5P for $0.25 or less
- DDOG 06/16 75P for $5.15 or less
- EGO 06/16 12P for $0.70 or less
- BLDR 06/16 105P for $3.90 or less
- NUGT 06/16 50P for $4.25 or less
Delta Neutral Cross
- QQQ 06/16 318C for $9.25 or less
- PLTR 06/16 8C for $0.40 or less
- JPM 06/16 135C for $4.55 or less
- DIS 06/16 100C for $3.40 or less
- EQT 06/16 31C for $1.90 or less
Trading Thesis 🧐 - Why These Crayons Are More Delectable Than Morticia’s Potions 🖍️🍸
Astute investors 👨🏻💼💀 often rely on past price performance like soothsayers searching for portents of doom, all to predict the mysteriously alluring price levels of the present 🌙.
This bewitching analysis 🔮 marries current option open interest to the hauntingly tempting portfolio-level greeks—Delta, Gamma, and their arcane brethren. Once the greeks have assembled like Fester’s juggling knives 🔪, I can glimpse into the shadows and see how they change with different price points. From there, we hunt like Uncle Itt for the juiciest price levels where the gamma is highest and the delta is as close to 0 as possible 🕷️.
For certain tickers, the underlying price reacts with the intensity of Lurch playing the harpsichord 🎹 off delta neutral, gamma max, or sometimes both.
The reactions at these thrilling price levels in the past now serve as guiding spirits for our trading signals 🪄.
The deviously delightful plays and tempting target entry prices are conjured using a binomial option pricing model that echoes the size and duration of the reaction from gamma max or delta neutral 🎭. These plays often yield profit from roller-coaster-like stock movements 🎢. The most tantalizing ones catch the wind from directional moves and an uptick in IV 🦇.
Notes 📜- Cryptic Clues for Fun and Frolic with your Investments
- If the price quickly vanished past the entry price, beware! An otherworldly force is at play between when these mischievous trades were generated and when the market swung open its doors 🚪👻.
- Sell half your position upon doubling your delight, and devilishly freeroll the rest, plotting an exit in true Addams-style 🏰💨.
- My risks dare not exceed 1% of my total capital on these dark trades; if my conviction wavers, like Cousin Itt fearing a hairdresser, I only allocate 0.5% or 0.25% of my capital, and dollar-cost average in 💸💇.
- These trades were divined before the market awoke, and are based on the whispers of yesterday’s ghosts. Keep that in mind when patiently lurking for the perfect entry 👂🌘.
FAQ - Questions from the Curious and the Captivated 🦉
- Most of your plays are puts 👀 Are you a gay bear? 🐻
- No, no, my darlings! Quite the contrary. It simply so happens that the companies have recently soared like Thing with a pair of bat wings🦸♀️. Which in our humble Addams view, means they are perhaps a touch overextended. These trades are primarily forms of mean-reversion toward or away from important price levels 🌟.
- Are you entering all these plays? 🎭
- Fiddlesticks, of course not! Morticia whispers that there has been a scarcity of plays in recent moonlit evenings. Thus, I’ve expanded my bag of gory gadgets 🔦 to unveil more plays with a promising edge. Visit this curated list, select the ghoulish plays that charm your morbid heart, and take your gains to the haunted house 🎠💞.
- You mentioned a new play on the same ticker in the past? 🎟️
- Allow the new play to ominously eclipse the old. The earlier game is now most likely invalidated, like a vampire caught in the sunlight ☀️🧛. If you haven’t joined the party, don’t chase the price. Each new day unveils fresh secrets and the newer play divulges those whispers, whilst the older play does not 😈🔮.
- Where are the crayons? I only see words 🖍️🧪
- Unveil the mysteries by clicking the links above, my intrepid investigators 🔼.
- Have you back-tested this devilish endeavor? 🧪
- Indeed, we Addams are thorough. The results reveal a tantalizing Sharpe Ratio (1.76) and a bewitching 63% win rate for trades (7% margin of error) 🏆.
- 🌌Historical performance? Tell me more!
- The realized Sharpe Ratio sits temptingly at 1.82 with a 66% win rate. So far, there is a spine-chilling 95% probability that the expected win rate will dance between 62% and 73% 👯♀️. (Stats as of the eerie 2023-04-30 📅)