· wrinkle brain plays · 3 min read

Wrinkle Brain Plays

Plays for Execution on May 8, 2023. In the style of a maple syrup obsessed canadian.

Plays for Execution on May 8, 2023. In the style of a maple syrup obsessed canadian.

Tickers of Interest - TL;DR

Gamma Max Cross

  • CCL 06/16 10P for $0.65 or less
  • NIO 06/16 7.5P for $0.40 or less
  • DKNG 06/16 22.5P for $0.70 or less
  • W 06/16 40P for $3.70 or less
  • CRM 06/16 195P for $7.30 or less

Delta Neutral Cross

  • QQQ 06/16 322P for $7.40 or less
  • TSLA 06/16 165P for $7.50 or less
  • COIN 06/16 55P for $5.20 or less
  • TSM 06/16 85C for $3.00 or less
  • CVNA 06/16 7.5P for $0.95 or less

🍁 Trading Thesis - Why These Crayons Taste Like a Maple Syrup Wonderland 🍁

When we’re seeking out the tastiest financial crayons, technical analysis and indicator-based trading are like sniffing out the best maple syrup. Grab a pancake and dig into this analysis where option open interest rules, eh?

Much like a plate stacked high with flapjacks, we’ll be calculating portfolio-level greeks (Delta and Gamma) to simulate changes at various price points. Our goal? Finding those flavourful price levels where gamma is maxed out and delta is as close to zero as a hockey game in overtime.

For certain tickers, the underlying price becomes as jumpy as a moose on coffee, reacting off delta neutral or gamma max (or both!). We use these past reactions like a GPS to find perfect trading signals.

Our delicious plays and target entry prices are calculated with a binomial option pricing model, covering the size and duration of the reactions. Hold onto your toques; we see the best plays benefiting from not only the directional move but also the increase in IV.

🍁 Notes - Sweet Maple Syrup for Your Brilliant Brain 🍁

  • If the price has skated past the entry price, be careful! Something changed between the time these plays were generated and market open.
  • Look to sell half your position on a double, and free skate the rest to exit at your discretion.
  • I’m willing to risk up to 1% of my toonies and loonies on any trades I take. If my conviction is lower, I’ll only allocate 0.5% or even 0.25% and dollar cost average in.
  • Keep in mind, these trades were calculated before the market opened, so base your decisions on older info like an antique maple syrup can.

🍁 FAQ - Pass the Maple Syrup, Won’t You? 🍁

  • Are these mostly puts? Are you a gay (bear)? 🐻
    • Nah, just poutine it out there that these companies might be a bit overextended after some recent run-ups. We’re simply heading toward or away from an important price level, like a proper Canadian mean reversion.
  • Are you snowshoeing into all these plays? 🎿
    • Nope. With fewer plays in the usual WSB morning talks, I’ve got my Timmies in hand and widened my search to help apes find more gain porn. Choose your faves like picking your favourite maple trees.
  • Yesterday’s play has switched tickers. What’s up with that, eh? 🔄
    • Swap the old play for the new one, buddy. The previous play isn’t valid anymore, so no need to go chasing uncharted trails.
  • Where are the crayons? I see words, not colours. 🖍️
    • Just click those maple syrup-y links above.
  • Did you take this thesis back to the sugar shack? 🍁
    • Oh, for sure! Results show a moderate Sharpe Ratio (1.76) with an expected 63% win rate (7% margin of error).
  • How’s the historical performance, eh? 🏒
    • The realized Sharpe Ratio sits at 1.82 with a 66% win rate. Based on past game performance, there’s a 95% chance the expected win rate will be between 62% and 73% (Stats as of 2023-04-30). And that, my friends, is tastier than Aunt Jemima!
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