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What $GME has taught me in 36 hours of day trading
Jumped on the $GME bandwagon on Friday, 4 @ ~316. My 36 hours of day trading has already taught me that no matter how this plays out, I will never YOLO on a bubble ever again. The principle seemed straightforward: hedge funds got lazy/greedy, over-shorted their positions, bet against a company that wasn't actually going under, and some astute monkies on reddit caught them and triggered a short squeeze. Even as someone who knows almost nothing about the stock market, the basic premise makes sense. But the devil's in the details, and hype is blinding. First red flag was when I realized DeepFuckingValue did not bet on the short squeeze, he bet on undervalued stock price over a year ago. He has also trimmed his position such that no matter what happens in the squeeze, he walks away with 8 figures. So the people screaming "if he's still in, I'm still in!" and "look at those brass balls, if he can lose $5MM in a day then I can hold" are really living up to the dumb ape meme. He didn't lose $5MM yesterday, he lost $5MM in *unrealized gains*, there is a *huge* difference. Second red flag was a common sense idea that hedge funds won't go down without a fight, and they have literally billions of dollars and decades of experience. You don't get that without learning how to game the system in complex, subtle ways. So even if they are still heavily shorted (which they might not even be anymore), and even if somehow WSB is holding some kind of meaningful leverage over them, that doesn't rule out the very real possibility they have a dozen ways out of this that people like me have no idea about. But even in the off chance that somehow this turns around, and $GME does go "to the moon," that doesn't change the fact that it's bad long-term strategy to bet on bubbles and jump on bandwagons. They almost certainly fail, and if they don't, they only serve to inflate egos that will fall even harder on the next gamble. I'm still holding my shares but I don't expect to see my ~$1200 ever again. In the off chance I break even or see a profit here, I will count it as dumb luck and use it as seed money to learn how to invest in real long term gains. Edit: holy shit RIP my inbox. No way I can read all that. Want to clarify a few things. Not financial advice. My position: I knew I was late to the party. I wanted to gamble. I knew what I was doing, and (mostly) why I did it. Hindsight showed me it was more based on emotion than I wanted to admit, but still, I'm not surprised by the outcome so far, and I'm totally OK with taking the L and calling it a lesson learned. I don't blame DFV, WSB, or anyone for my choices. I own them, even proudly, because I wanted to step out and take a calculated risk vs. sit on the sidelines out of fear of loss. I'm holding because I already bought my tickets to this ride, want to see this thing play out, and I'm fine with gambling the final $300 on the outside chance things turn around. Your positions: brothers, sisters, nonbinary siblings: you are not your portfolio. whether up or down, your value is not based on how big or small an imaginary number is. you are a human being on the bleeding edge of 3.5 BILLION years of evolution, you have more actual success in your past and potential success in your future than you'll ever know. 12 years ago I was a penniless alcoholic literally stealing change from my grandpa to get loaded on 211 Steel Reserve. I hit my bottom, joined AA, and now I'm a network engineer, wife, kids, the whole lot. Anything is possible if you don't give up on yourself. But I know it's not that easy, we all need borrowed self-esteem before we can see the real value inside. So if this $GME gamble hit you hard, please reach out to someone. don't give up. Hell, this bubble isn't even over, it might even turn around! But either way, don't give up. Edit2: wow, never expected this to go this far. wrote it on my way out the door as a way to cope with the situation. read a ton of replies, probably missed most of them. thanks for all the love and hate and everything inbetween! A few more points:
Agreed that RH deserves to be held accountable. No question they manipulated this.
Agreed it's not over yet. the squeeze could happen. but if it does, my main personal takeaway from this experience will stand: I won't speculate on bubbles anymore. This is my position if I lose everything or make $100k.
if you posted gains, that's awesome! so glad for you, I wish you the best!
Edit3 2/3/21: Full disclosure, I closed my position this morning at a ~$900 realized loss. My gut says the squeeze happened, short interest isn't what I thought it was on Friday, and the stock will return to actual value soon.
Note: BlackBerry is NOT a cyber security company. They are a security company. Revenue does not care about your AI driven autonomous machine learning EV car with DDs. People are using these terms loosely. A quick lookup for interviews with John Chen would prove that he explicitly avoids these terms as they do not define nor matter to the products/revenue of BlackBerry. QNX revenue does not depend on any of these terms, it's on installation on any device. This includes the space station, of which there is 1 of with obviously non-recurring revenue. Buying based on these basis would be gambling. Bull:
Business transformation: BlackBerry is now a software company, starting the transformation in 2015. The focus is security, the general term.
5 Products:
QNX: Embedded system OS.
Multi-OS housing: It has the capability to allow for multiple OSs on a single chip.
Real-time availability/software prioritization: Not all pieces of software operate on the same priority. Steering/braking would be higher priority than media, and QNX allows for that. Even if the thread/core is shared with other applications, when high priority software is requesting a resource it will be prioritized to ensure reliability.
Resource sharing: CPU, RAM, and GPU resource sharing between different applications capability. Two applications can share the same CPU core and bump each other based on prioritization.
Why not Linux? QNX has the highest certification for security available. Linux does not. CEOs would want to avoid liability and this certification allows for that.
Device agnostic: It can be installed on any device, not just cars. Any IoT and offline device can use QNX.
QNX Hypervisor: Consolidate multiple OSs on a single SoC using virtualization
SoC: System on a chip. Instead of using multiple ECUs, which is what car manufacturers currently do, they can use one single chip to run multiple high priority applications and multiple OSs. This is what Tesla does now.
Virtualization: Running an OS in a virtual environment. Think Linux environment inside of Windows. This helps with debugging for developers without having to have the actual hardware.
IVY: Scalable cloud-connected software platform for vehicles.
What is it a solution for? When a vehicle manufacturer wants a way to transmit the QNX/OS data safely, normalize it, and visualize it/interact with it. It also allows car manufacturers to own the data, unlike other OSs.
Scalable: AWS servers are capable of handling the load from many endpoints.
Software platform: There is currently no centralized software ecosystem for vehicles. IVY is providing that.
Non-BB developers would be able to use an SDK to develop applications on IVY for infotainment/general apps/others. IVY will also use ML to gain insight on unrecognized patterns by developers. An example of this is detecting if a car slipped, without having the developer connect multiple sensors to figure out if that event happened.
50/50 joint effort on revenue and effort to develop the ecosystem. Using AWS's knowledge in AI/ML for calculated sensors (slip, driver on seat, etc)
Usage by other vendors: A city can connect to the data from vehicles and detect when ice/slipping is happening. If brakes are getting overheated coming from a high elevation area. If a car had an accident, etc. An insurance company can provide an app to give discounts similar to the currently implemented OBD-2 readers. A maintenance provider can also connect to this data and check if an error is specific to maintenance, malpractice, or general misuse.
Spark: Endpoint management. Basically API security. Did not delve far into this, basic info.
Unified Endpoint Security: This is the endpoint where a laptop/phone/IoT device hits. It provides encryption and security around that. Continuous authentication is a part of it, where a device is learning the user behavior using ML and continuously checking if the behavior matches the original owner; if not, lock the device.
Unified Endpoint Management: Basically managing your API for devices.
Zero trust: I think this is specifically talking about continuous authentication. Basically, it's not an authenticate once and forget it. It's constantly tracking behavior to verify the user is the authenticated user.
AtHoc: Non-enterprise communication system.
Target customers: Government, healthcare, education, etc.
Solution: A communication system targeting non-enterprise businesses; specifically for Event management, cross organizational communication/collaboration, mass notifications.
Who does this benefit? You've seen the hacks in healthcare/educational/governmental sector. This is specifically for them.
SecuSUITE: Phone application to allow employees to use work related data in personal devices without cross communication (between personal and work data).
End to end encryption.
Separation of concerns between personal and work data. Employers CANNOT access your personal data.
Used by NATO; doesn't carry much value in my book but maybe in yours.
Customer oriented solutions: As you've seen in the products above, some products overlap and are just names to target specific customers. It allows customers to easily understand what product could solve their issue. Continuous authentication is a great example of this: Their customer complained that they kept re-authenticating, so they designed a solution allowing them to authenticate once and using ML they learned their behavior and can continuously check if the user is the owneauthenticated user. This kind of passion in leadership is good for business.
Liability: QNX has the highest security rating available. Most CEOs want to avoid liability when it comes to security, using QNX would help them avoid that in a similar way cloud services help them avoid being blamed for hacking.
Leadership: BBs leadership isn't one to play on famous words to drive the stock up. John Chen explicitly states this in his interviews and says they are a security company. Not cyber, doesn't mention AI or whatever. He explicitly avoids meme words and understands what the point of BBs business is.
Where I think growth can be made:
QNX in more cars. They can capitalize on the idea of less ECUs = less cost for OEMs + security.
IVY usage by OEMs along with QNX.
IVY ecosystem. Maybe application billing?
Professional services (support) for the products listed.
AtHoc increased market share in more governmental/healthcare/educational entities.
SecuSUITE for more enterprise customers with the idea being saving employers money from purchasing work phones for employees, and worrying about securing them.
Bear:
Revenue: It is not yet based on a subscription/usage basis. You can only produce so many cars, and they don't give an insight on how much do they charge per car for QNX. Anywhere from $2 - $20 is what was mentioned in transcripts. This is a growth area, but not at a trajectory that's excellent. IVY does work on a subscription/usage basis, but IVY can be used WITHOUT QNX. I'm worried about this, but still see it as an area that will generate revenue in the range of $400 MM - $600 MM at the price of $20 per 30M cars. The 30M per year is based on the listing of their customers and their yearly production rates. Keep in mind I stated any device, this does not include trucks or other IoT devices.
Market share: These are relatively new products. J.P. Morgan pointed this out as a priority for growth. This could end up not working out and growth never happens. This is a relatively low risk due to QNX and IVY providing SO MUCH value for car manufacturers Vs. other products in the market.
Patent revenue: They sold a chunk of their no longer relevant patents to Huawei. This makes up a small (<= 32%) of their revenue and is a one time sale. The coming quarter could be equal or less to the last quarter revenue due to either other sales making up the lost revenue from patents, or coming up short. It could come higher if they sold more services, but due to COVID and knowing that many car manufacturers have lowered their production due to chip shortage, the next quarter will most likely be lower.
VW.os: VW is making their own OS. VW.os is what they're calling it. They're currently using QNX, but that revenue could potentially stop. Personally I don't believe VW is capable of doing that. It's a marketing hype. Their companies are not capable of good collaboration or good implementation based on what I've read and researched (can't find article right now), but it's something to be concerned about.
QNX success: While IVY could be using QNX, it does NOT depend on it. There is potential for OEMs to use IVY without QNX. I think this is a low risk, but still risk. 19 OEMs are already using QNX.
Lack of Answers: I can't get much out of their earnings call. They don't delve into pricing for QNX, how they plan to grow it besides getting more car manufacturers and more cars post Corona. How they plan to do recurring revenue. A breakdown of each revenue segment would be helpful, but I don't see that either and there is hesitancy to delve into it.
Prediction: I think QNX can become a $1B revenue per year alone. $2B revenue per year as a company is not far fetched. Without a subscription/usage based model, it is difficult to see how growth can go beyond that. BB is good in 2-5 years, not this year. I can see their revenue growing to potentially $2B - $4B revenue per year. They did mention trying to figure out a subscription/usage based billing, if done then the revenue would be much higher. I think $18 is a fair price on the high end. It could grow further than that, but expectations would be HIGH. Resources:
Position: 1,500. Disclaimer: I don't know everything, I may be incorrect about some things. This is based on what I've researched and to the best of my ability. Do your own DD. Obligatory this is not an investment advice. Edit: This is the only sub with a lot of discussion. I appreciate y'all. 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 🚀 Edit 2: One day later, marked closed $18.03. Crazy.
GME Short Squeeze What Comes Next Part 3 Hello all, Before I begin I would like to address something I have been encountering on my posts in the comments section. I keep receiving some hate concerning my opinions and I want to be crystal clear that they are just that; opinions. I also want everyone to know that is is meant to be a dialog. I am not trying to pump this stock because truthfully, this goes far beyond us retail investors at this point. What I want is a dialog between all sides to examine this truly fascinating phenomenon that is occurring. I would also like to clarify something, I am not a bagholder. I do currently hold bags because I own 336 shares at a $194.34 cost basis, however, that total amount is house money that was used from my profits on the first go around. I also understand some people are tired of hearing about this because it's the same regurgitated form of someone else's post as it keeps circulating in an attempt to retain hype and drive future buying; this is not what this post is about. As investors and individuals involved in the world of finance, this situation should absolutely intrigue us whether or not we are involved. I am here to present my logic on the situation but encourage healthy discussion and debate. This brings me to my first claim. This is not over. Now, I am not claiming that a squeeze will still occur, I am simply claiming it is not over, for better or for worse. Several things need to take place for this to be completely over, at which point I will either post my gains or my losses from the adventure. When I say "it" I am referring to this entire phenomenon, not one short squeeze. I do not think these events, "it", is over. This is largely due to retail and institutional purchasing not really changing all that much since we found the bottom and established support at a staggering $60. This support was lost today and found new support at $50. There was very interesting ATH action and I'm not sure what to make of it. Millions of bag holders (not just WSB) are still holding and in fact, averaging down, thereby purchasing more. These same bag holders are absolutely refusing to sell for such massive losses and in turn are becoming long term investors on the stock if another squeeze isn't to occur. People are picking up speculative positions in the off-chance of another squeeze. Others are determining this as a fair value for the company, not fundamentally, but based on the future prospects of Ryan Cohen and team. Finally, it is nowhere near leaving the global stage with important upcoming dates that we will discuss later. To examine why it isn't over let's look at both sides of the argument:
Bulls claim it's not over for many reasons that you can find in the hundreds of other bullish posts, so I won't bore you with those details. My argument on the bull side is more along the lines of what I listed above.
Bears claim it is over because there was a 2250% price increase over the course of two weeks, therefore this must be a short squeeze.
I think we can all agree, bear or bull, that something happened. A 2250% increase certainly isn't nothing. The question is...what? I see several possibilities and would like to discuss them in the comments.
The shorts in fact covered and this was a short squeeze.
The shorts partially covered and this was a partial short squeeze, but the price increase was mainly hype and gamma squeezes.
The shorts didn't cover anything and this was a globally hyped price increase in conjunction with several gamma squeezes.
Some combination of the above 3.
First, the data: Based on morningstar the short interest is showing 78.46%. Now, I think the website is having some issues storing cookies because it will show the outdated 226% unless you open it up in incognito. Market watch is showing 41.95% This spread is interesting for sure, my thoughts are some of these calculations are including "synthetic longs" introduced by S3. It is extremely possible to manipulate these numbers via illegal methods and even legal methods using options. Please see this SEC document to explain how this would work. I am not trying to convince anyone to fit my narrative, but these things occur far more commonly than one would expect. The reasoning is because the fines for committing the crime are far less costly than letting the event take place. Please see FINRA's website for the long, and frequent list of fines being dealt out due to manipulation. A common culprit? Lying about short volume. Let's use the absolute worst case scenario being reported of 41.95%, which mind you is still extremely high for one stock: The shorts in fact covered and this was a short squeeze What's interesting here is even if the shorts 100% covered all of their positions, they very well could have shorted on the way back down. Why wouldn't you? It would be insane to not open a short position when this hit nearly $500 especially if you lost half of your companies money; what better way to get it back? For the remainder of this thesis, I will be assuming that some of the short positions that exist are newly opened positions at a higher price unless someone has a counter-claim as to why that wouldn't be possible/probable. That would mean 226% was covered on the way up and another 41.95% was reopened on the way back down. Based on the volume and price changes throughout the past two weeks this simply doesn't pass the math check. The shorts partially covered and this was a partial short squeeze. Again, using 41.95% this is highly likely and the most reasonable case. Some, probably the worst positions, were covered on the way up. I think this is precisely what happened, we had some partial shorts covering but for the most part it was gamma squeezes, hype, and FOMO whereby the price started climbing so rapidly it became smarter for the shorts to just wait out the bubble than to actually cover all of their positions. Again, we fall into a "what-if" scenario regarding shorting on the way back down. The shorts didn't cover anything and this was a globally hyped price increase in conjunction with several gamma squeezes. This scenario does not pass the math check using the 41.95% figure. If the data is being manipulated then this becomes very interesting because if some of the worst positions are still open then that means all of these HF's losses that were reported were strictly interest and they are simply waiting this out for as long as it takes making back their losses on their newly opened short positions in t $300-$400 range. Sadly, this puts us in the guessing range yet again. We can do the math and see it's possible this scenario exists, however, we would be comparing it against losses reported by the entities that were being squeezed. There are way to many what-if's for me to me consider this a possibility, but I can't write it off completely. Some combination of the above 3. Truthfully, this isn't worth examining just yet. There would be far to many "what-if's" to address, this is something that could be address at the later dates that we will get to shortly. Now, I've heard it a lot regarding the 02/09 data. "It's two weeks old". Well, that is always the case. The FINRA short data is always two weeks old and suggesting that we can't pull any information from it at all is asinine. Where it gets quite murky, is the data includes 01/27 information. This was a day unlike any other in this saga. I will take this moment to address the following upcoming catalysts and when I truly think this will be done; one way or the other. Today's data 02/09, was very important because if it showed an extremely low percentage then we know shorts have exited and did not re-enter and this is completely done. Given the data does not reflect that, we now must turn to several events that could act as catalysts for either a further squeeze or a complete shutdown. 02/19 - In my last post, I discussed the Failure To Deliver (FTD) conundrum. I do need some help figuring out the exact expiration date. From here "The close-out requirement states that a participant of a clearing agency needs to take immediate action to close 4 out a fail to deliver position in a threshold security that has persisted for 13 consecutive settlement days by purchasing securities of like kind and quantity." The exact date is slightly irrelevant because I highly doubt all of these FTD's are going to deliver on the same exact day. This site, while it isn't an official channel seems to be doing a good job of tracking data. If you want to learn more about FTD's and the implications there please visit that site or review my last post which has links to follow for further reading. 02/18 - Keith Gill aka u/DeepFuckingValue will testify before congress and RH CEO Vladimir will be attending. This can go several ways which can lead to an SEC trading halt on GameStop or with evidence that proves foul play occurred. Who knows? It will certainly be interesting and I don't even to speculate on the market reaction to this even because it could go a ton of different ways; it will be an important date nonetheless 02/24 - The next FINRA short interest information will be made readily available to the public. This will be far more interesting and helpful information because it won't include the insane volatility of January, but it will also highlight the newest short positions. This data will help further drive where I think this is all going to end. It's possible that shorts opened new positions at $50 thinking it was going back to $12. Let's not speculate too much here either, it's just another dataset that will bring light to the direction this is headed. 03/25 - GameStop ER. This is big too for several reasons. First, this will include the console sales cycle which historically has done well for GameStop. A typical buy the hype, sell the news event. It will be interesting to see how the market reacts leading up to this ER, maybe people won't even touch GME leading up to then due to the recent volatility, but if they do, and if there is still a lot of short interest, this too could force shorts to begin covering. Another critical part of this ER is Ryan Cohen. This will be the first time this new board addresses the public with their plans for the future and for the first time since this entire adventure began, the "dying brick and mortar" narrative will finally begin to change in the public eye. That is still the common misconception regarding GameStop, that it is a dying brick and mortar retailer where nothing has changed. This hasn't been the case for around 6 months now, but this will be the first time it is publicly address. The headlines surrounding GameStop's future plans will be very interesting to read and the markets reaction will be far more interesting. I have been asked a lot what my PT is and when I expect the squeeze to happen, but let me be clear. Very seldom do squeezes "just happen". In fact, short squeezes are far more common than one would think, they just typically happen over months, if not years and the shorts cover on dips so you don't even notice it's happening. In order to force a squeeze, you need to hold a decent amount of shorts underwater. Soon one will crack and start closing their position, this leads to a series of shorts closing their positions skyrocketing the price until more and more shorts need to cover. This is rare. I hope this narrative of purchasing heavily shorted companies comes to a close soon because a lot of people are going to lose a lot of money simply buying up companies because they are heavily bet against. Catalysts and massive changes need to occur like overhauling your entire business as is the case with GameStop. Normally, shorts will close their positions one at a time, covering on dips and you don't even notice it's happening. In times where you see a price rise of seemingly no news could very well be shorts closing their positions because their research led them to realize this company is on the road to recovery. I digress. Given the most recent data and the multiple upcoming catalysts I am still very bullish on a GME short squeeze. My post from quite some time ago illustrated the importance of catalysts regarding a short squeeze, this is still very much the case. The first run was interrupted and the second run won't happen with magic, it requires a catalyst. Another post was titled For those who do not understand the inevitable GME short squeeze, was at the time "inevitable" because math. That is no longer the case. It is no longer inevitable but it is still possible. I want to be clear: This is not nearly as close to a sure thing as it once was and it depends on a lot of different factors. One of the largest is the people. Granted, a lot of what's happening now is in the hands of institutions but millions of retailers holding their positions to the grave certainly helps the institutional buyers have more faith in their play to continue a squeeze. SO WHAT DO I THINK I think shorts certainly covered some of their positions, but not all. I also firmly believe a significant amount of short positions were opened on the way back down by both HF's and individuals. Some certainly positioned high, but based on sentiment, it appears a lot of people think GME is fairly valued around $20 (which I disagree with but let's use that for the time being). That would mean shorts would have no problem opening positions at 100,70,60, even $50. 42% is still very high which means a squeeze is inevitable so long as the company continues in a positive path. However, squeezes typically aren't as abrupt as people think. They are actually quite common, in fact another position I'm heavily invested in is SPCE and they have been going through a squeeze for several weeks and will continue to squeeze so long as news continues to be positive. How would we get an abrupt short squeeze? A massive bull run. The new shorts that entered at lower levels wouldn't be too hard to catch, however, they are probably low volume, so when they buy to close, it won't be large enough volumes for massive peaks, but a bull run very well could lead to these lower tiered shorts closing, triggering a gamma squeeze. If gamma squeezes are made week over week then shorts at the higher end would have two options:
Close early and take profits
Wait it out because they are positioned so well that interest means nothing and they don't think there is any hope of us rising to those levels.
In the first case, them closing early would be a nice short squeeze to probably several hundred dollars, but it wouldn't break $1000. To break $1000 we would need a big bull run to catch the shorts, trigger gamma squeezes, and keep momentum until they are caught and underwater. This is highly unlikely unless there is another global sentiment. NOTE: ALL OF THESE ASSUMPTIONS I AM MAKING ARE BASED ON THE 42% REPORTING. IF IT IS IN FACT 78% THEN THE POSSIBILITY IS TREMENDOUSLY INCREASED FOR THESE THINGS TO HAPPEN. SO WHEN DOES IT ALL END My though is if by the end of March these catalysts were not enough to reignite the hype and squeeze, then it will essentially be over except in the case of a few circumstances:
A VW/Porche moment occurs where a large buyer picks up a large portion of the company.
Some other currently unknown catalyst appears seemingly out of thin air
The data was in fact manipulated. Regardless of what the data says, if the shorts did in fact lie about their short int to take the fine over being squeezed, then they will be squeezed regardless.
It is quite possible, that these catalysts and moments aren't enough to force a squeeze anymore especially if the shorts have repositioned really well. I will retain the mindset that this fateful January 2021 was not a short squeeze. However, that does not mean it will ever actually happen. SO WHAT IS YOUR PLAY HOOMAN? Well, I am long on GME which is why I didn't mind hopping back in even at outrageous prices. I will continue averaging down and don't plan on selling for quite some time, probably several years. The reason for this is I believe in Cohen and his team to turn this into something unexpected and I imagine an eventual ROI. Once this is all said and done and I think either the shorts truly have covered or they simply got away with it (Beginning of April), I will be posting my DD for GME as a long play regardless of the squeeze mechanics. Thank you all for joining me on this wild journey. I hope we can discuss some of these points in the comments like adults and truly try to grasp this wild situation we are all in. There are extremes on both sides from "get over it, the squeeze happened" to a cult like mentality on the other extreme. I hope through discussion we can find the moderate approach and further understand the market mechanics at play. Thanks for your time WARNING: Until the squeeze business is over for good, this is a very volatile and risky play. Joining now for the hope of a potential round 2 squeeze should only be done in a speculative manner with money you are willing to lose. This is more akin to a gamble than it is investing. I think the current market price is fair given the future prospects of the company but do your own DD, I will not be releasing any until this squeeze is put to rest. TL;DR: I am still bullish on this scenario even at 42%, if it really is 78% then I am extremely bullish. There are a plethora of upcoming catalysts that could reignite the squeeze but even if none are powerful enough, with Cohen's new direction we could expect good news for quite some time forcing shorts to exit on a more spread out timeline. Disclaimer: I am not a financial advisor. I do not wish to sway your opinion in either direction. I simply seek to examine this interesting and volatile situation via crowd sourcing. What you do with your money is entirely up to you.
For ALL THOSE WHO MISSED ON GME, LOST MONEY OR BAGHOLDING...THIS IS THE ENDGAME 🚀
ALL CREDIT GOES TO u/hooman_or_whatever GME Short Squeeze What Comes Next Part 3 Hello all, Before I begin I would like to address something I have been encountering on my posts in the comments section. I keep receiving some hate concerning my opinions and I want to be crystal clear that they are just that; opinions. I also want everyone to know that is is meant to be a dialog. I am not trying to pump this stock because truthfully, this goes far beyond us retail investors at this point. What I want is a dialog between all sides to examine this truly fascinating phenomenon that is occurring. I would also like to clarify something, I am not a bagholder. I do currently hold bags because I own 336 shares at a $194.34 cost basis, however, that total amount is house money that was used from my profits on the first go around. I also understand some people are tired of hearing about this because it's the same regurgitated form of someone else's post as it keeps circulating in an attempt to retain hype and drive future buying; this is not what this post is about. As investors and individuals involved in the world of finance, this situation should absolutely intrigue us whether or not we are involved. I am here to present my logic on the situation but encourage healthy discussion and debate. This brings me to my first claim. This is not over. Now, I am not claiming that a squeeze will still occur, I am simply claiming it is not over, for better or for worse. Several things need to take place for this to be completely over, at which point I will either post my gains or my losses from the adventure. When I say "it" I am referring to this entire phenomenon, not one short squeeze. I do not think these events, "it", is over. This is largely due to retail and institutional purchasing not really changing all that much since we found the bottom and established support at a staggering $60. This support was lost today and found new support at $50. There was very interesting ATH action and I'm not sure what to make of it. Millions of bag holders (not just WSB) are still holding and in fact, averaging down, thereby purchasing more. These same bag holders are absolutely refusing to sell for such massive losses and in turn are becoming long term investors on the stock if another squeeze isn't to occur. People are picking up speculative positions in the off-chance of another squeeze. Others are determining this as a fair value for the company, not fundamentally, but based on the future prospects of Ryan Cohen and team. Finally, it is nowhere near leaving the global stage with important upcoming dates that we will discuss later. To examine why it isn't over let's look at both sides of the argument:
Bulls claim it's not over for many reasons that you can find in the hundreds of other bullish posts, so I won't bore you with those details. My argument on the bull side is more along the lines of what I listed above.
Bears claim it is over because there was a 2250% price increase over the course of two weeks, therefore this must be a short squeeze.
I think we can all agree, bear or bull, that something happened. A 2250% increase certainly isn't nothing. The question is...what? I see several possibilities and would like to discuss them in the comments.
The shorts in fact covered and this was a short squeeze.
The shorts partially covered and this was a partial short squeeze, but the price increase was mainly hype and gamma squeezes.
The shorts didn't cover anything and this was a globally hyped price increase in conjunction with several gamma squeezes.
Some combination of the above 3.
First, the data: Based on morningstar the short interest is showing 78.46%. Now, I think the website is having some issues storing cookies because it will show the outdated 226% unless you open it up in incognito. Market watch is showing 41.95% This spread is interesting for sure, my thoughts are some of these calculations are including "synthetic longs" introduced by S3. It is extremely possible to manipulate these numbers via illegal methods and even legal methods using options. Please see this SEC document to explain how this would work. I am not trying to convince anyone to fit my narrative, but these things occur far more commonly than one would expect. The reasoning is because the fines for committing the crime are far less costly than letting the event take place. Please see FINRA's website for the long, and frequent list of fines being dealt out due to manipulation. A common culprit? Lying about short volume. Let's use the absolute worst case scenario being reported of 41.95%, which mind you is still extremely high for one stock: The shorts in fact covered and this was a short squeeze What's interesting here is even if the shorts 100% covered all of their positions, they very well could have shorted on the way back down. Why wouldn't you? It would be insane to not open a short position when this hit nearly $500 especially if you lost half of your companies money; what better way to get it back? For the remainder of this thesis, I will be assuming that some of the short positions that exist are newly opened positions at a higher price unless someone has a counter-claim as to why that wouldn't be possible/probable. That would mean 226% was covered on the way up and another 41.95% was reopened on the way back down. Based on the volume and price changes throughout the past two weeks this simply doesn't pass the math check. The shorts partially covered and this was a partial short squeeze. Again, using 41.95% this is highly likely and the most reasonable case. Some, probably the worst positions, were covered on the way up. I think this is precisely what happened, we had some partial shorts covering but for the most part it was gamma squeezes, hype, and FOMO whereby the price started climbing so rapidly it became smarter for the shorts to just wait out the bubble than to actually cover all of their positions. Again, we fall into a "what-if" scenario regarding shorting on the way back down. The shorts didn't cover anything and this was a globally hyped price increase in conjunction with several gamma squeezes. This scenario does not pass the math check using the 41.95% figure. If the data is being manipulated then this becomes very interesting because if some of the worst positions are still open then that means all of these HF's losses that were reported were strictly interest and they are simply waiting this out for as long as it takes making back their losses on their newly opened short positions in t $300-$400 range. Sadly, this puts us in the guessing range yet again. We can do the math and see it's possible this scenario exists, however, we would be comparing it against losses reported by the entities that were being squeezed. There are way to many what-if's for me to me consider this a possibility, but I can't write it off completely. Some combination of the above 3. Truthfully, this isn't worth examining just yet. There would be far to many "what-if's" to address, this is something that could be address at the later dates that we will get to shortly. Now, I've heard it a lot regarding the 02/09 data. "It's two weeks old". Well, that is always the case. The FINRA short data is always two weeks old and suggesting that we can't pull any information from it at all is asinine. Where it gets quite murky, is the data includes 01/27 information. This was a day unlike any other in this saga. I will take this moment to address the following upcoming catalysts and when I truly think this will be done; one way or the other. Today's data 02/09, was very important because if it showed an extremely low percentage then we know shorts have exited and did not re-enter and this is completely done. Given the data does not reflect that, we now must turn to several events that could act as catalysts for either a further squeeze or a complete shutdown. 02/19 - In my last post, I discussed the Failure To Deliver (FTD) conundrum. I do need some help figuring out the exact expiration date. From here "The close-out requirement states that a participant of a clearing agency needs to take immediate action to close 4 out a fail to deliver position in a threshold security that has persisted for 13 consecutive settlement days by purchasing securities of like kind and quantity." The exact date is slightly irrelevant because I highly doubt all of these FTD's are going to deliver on the same exact day. This site, while it isn't an official channel seems to be doing a good job of tracking data. If you want to learn more about FTD's and the implications there please visit that site or review my last post which has links to follow for further reading. 02/18 - Keith Gill aka u/DeepFuckingValue will testify before congress and RH CEO Vladimir will be attending. This can go several ways which can lead to an SEC trading halt on GameStop or with evidence that proves foul play occurred. Who knows? It will certainly be interesting and I don't even to speculate on the market reaction to this even because it could go a ton of different ways; it will be an important date nonetheless 02/24 - The next FINRA short interest information will be made readily available to the public. This will be far more interesting and helpful information because it won't include the insane volatility of January, but it will also highlight the newest short positions. This data will help further drive where I think this is all going to end. It's possible that shorts opened new positions at $50 thinking it was going back to $12. Let's not speculate too much here either, it's just another dataset that will bring light to the direction this is headed. 03/25 - GameStop ER. This is big too for several reasons. First, this will include the console sales cycle which historically has done well for GameStop. A typical buy the hype, sell the news event. It will be interesting to see how the market reacts leading up to this ER, maybe people won't even touch GME leading up to then due to the recent volatility, but if they do, and if there is still a lot of short interest, this too could force shorts to begin covering. Another critical part of this ER is Ryan Cohen. This will be the first time this new board addresses the public with their plans for the future and for the first time since this entire adventure began, the "dying brick and mortar" narrative will finally begin to change in the public eye. That is still the common misconception regarding GameStop, that it is a dying brick and mortar retailer where nothing has changed. This hasn't been the case for around 6 months now, but this will be the first time it is publicly address. The headlines surrounding GameStop's future plans will be very interesting to read and the markets reaction will be far more interesting. I have been asked a lot what my PT is and when I expect the squeeze to happen, but let me be clear. Very seldom do squeezes "just happen". In fact, short squeezes are far more common than one would think, they just typically happen over months, if not years and the shorts cover on dips so you don't even notice it's happening. In order to force a squeeze, you need to hold a decent amount of shorts underwater. Soon one will crack and start closing their position, this leads to a series of shorts closing their positions skyrocketing the price until more and more shorts need to cover. This is rare. I hope this narrative of purchasing heavily shorted companies comes to a close soon because a lot of people are going to lose a lot of money simply buying up companies because they are heavily bet against. Catalysts and massive changes need to occur like overhauling your entire business as is the case with GameStop. Normally, shorts will close their positions one at a time, covering on dips and you don't even notice it's happening. In times where you see a price rise of seemingly no news could very well be shorts closing their positions because their research led them to realize this company is on the road to recovery. I digress. Given the most recent data and the multiple upcoming catalysts I am still very bullish on a GME short squeeze. My post from quite some time ago illustrated the importance of catalysts regarding a short squeeze, this is still very much the case. The first run was interrupted and the second run won't happen with magic, it requires a catalyst. Another post was titled For those who do not understand the inevitable GME short squeeze, was at the time "inevitable" because math. That is no longer the case. It is no longer inevitable but it is still possible. I want to be clear: This is not nearly as close to a sure thing as it once was and it depends on a lot of different factors. One of the largest is the people. Granted, a lot of what's happening now is in the hands of institutions but millions of retailers holding their positions to the grave certainly helps the institutional buyers have more faith in their play to continue a squeeze. SO WHAT DO I THINK I think shorts certainly covered some of their positions, but not all. I also firmly believe a significant amount of short positions were opened on the way back down by both HF's and individuals. Some certainly positioned high, but based on sentiment, it appears a lot of people think GME is fairly valued around $20 (which I disagree with but let's use that for the time being). That would mean shorts would have no problem opening positions at 100,70,60, even $50. 42% is still very high which means a squeeze is inevitable so long as the company continues in a positive path. However, squeezes typically aren't as abrupt as people think. They are actually quite common, in fact another position I'm heavily invested in is SPCE and they have been going through a squeeze for several weeks and will continue to squeeze so long as news continues to be positive. How would we get an abrupt short squeeze? A massive bull run. The new shorts that entered at lower levels wouldn't be too hard to catch, however, they are probably low volume, so when they buy to close, it won't be large enough volumes for massive peaks, but a bull run very well could lead to these lower tiered shorts closing, triggering a gamma squeeze. If gamma squeezes are made week over week then shorts at the higher end would have two options:
Close early and take profits
Wait it out because they are positioned so well that interest means nothing and they don't think there is any hope of us rising to those levels.
In the first case, them closing early would be a nice short squeeze to probably several hundred dollars, but it wouldn't break $1000. To break $1000 we would need a big bull run to catch the shorts, trigger gamma squeezes, and keep momentum until they are caught and underwater. This is highly unlikely unless there is another global sentiment. NOTE: ALL OF THESE ASSUMPTIONS I AM MAKING ARE BASED ON THE 42% REPORTING. IF IT IS IN FACT 78% THEN THE POSSIBILITY IS TREMENDOUSLY INCREASED FOR THESE THINGS TO HAPPEN. SO WHEN DOES IT ALL END My though is if by the end of March these catalysts were not enough to reignite the hype and squeeze, then it will essentially be over except in the case of a few circumstances:
A VW/Porche moment occurs where a large buyer picks up a large portion of the company.
Some other currently unknown catalyst appears seemingly out of thin air
The data was in fact manipulated. Regardless of what the data says, if the shorts did in fact lie about their short int to take the fine over being squeezed, then they will be squeezed regardless.
It is quite possible, that these catalysts and moments aren't enough to force a squeeze anymore especially if the shorts have repositioned really well. I will retain the mindset that this fateful January 2021 was not a short squeeze. However, that does not mean it will ever actually happen. SO WHAT IS YOUR PLAY HOOMAN? Well, I am long on GME which is why I didn't mind hopping back in even at outrageous prices. I will continue averaging down and don't plan on selling for quite some time, probably several years. The reason for this is I believe in Cohen and his team to turn this into something unexpected and I imagine an eventual ROI. Once this is all said and done and I think either the shorts truly have covered or they simply got away with it (Beginning of April), I will be posting my DD for GME as a long play regardless of the squeeze mechanics. Thank you all for joining me on this wild journey. I hope we can discuss some of these points in the comments like adults and truly try to grasp this wild situation we are all in. There are extremes on both sides from "get over it, the squeeze happened" to a cult like mentality on the other extreme. I hope through discussion we can find the moderate approach and further understand the market mechanics at play. Thanks for your time WARNING: Until the squeeze business is over for good, this is a very volatile and risky play. Joining now for the hope of a potential round 2 squeeze should only be done in a speculative manner with money you are willing to lose. This is more akin to a gamble than it is investing. I think the current market price is fair given the future prospects of the company but do your own DD, I will not be releasing any until this squeeze is put to rest. TL;DR: I am still bullish on this scenario even at 42%, if it really is 78% then I am extremely bullish. There are a plethora of upcoming catalysts that could reignite the squeeze but even if none are powerful enough, with Cohen's new direction we could expect good news for quite some time forcing shorts to exit on a more spread out timeline. Disclaimer: I am not a financial advisor. I do not wish to sway your opinion in either direction. I simply seek to examine this interesting and volatile situation via crowd sourcing. What you do with your money is entirely up to you.
Some perspective, and 3 takeaways, from Jossmess 2021
My wife and I have watched each episode of Buffy 3-4 times, and have followed the emerging storm with sadness, rapt attention, and deep appreciation for the courage of CC and others who support her. Just when we had come to grips with JW's craven hypocrisy 3 years ago, we now see that even that deception masked a still more damaging pattern of "casual cruelty." What his ex-wife must have had to deal with! Just letting this all sink in, and I have 3 takeaways that have helped me to manage this chaos: 1) Buffy remains the best television show of all time. (And honestly, it's not even close.) But feeling a personal connection with the artist is always problematic. Artists are talented, not paragons of virtue. If every artist was held to the standard of his/her ideals, we would have very little art to appreciate. My own father was a well-regarded novelist who never quite had the courage to live up the ideals he so skillfully preached. But I still think the world is better for the books he wrote. Buffy must remain a feminist icon, even as its creator is rightly despised, just as Chinatown remains one of the great movies even as its director turned out to be a pedophile. The world - and especially television - is better because of JW, even as he seems to have wrought pain and havoc to those around him. Without JW, Gilmore Girlls, Veronica Mars, Jessica Jones and Stumptown might never have been greenlit. 2) The big reveal is just not that JW turned out to be an ass, but how toxic and misogynistic Hollywood really is. Part of the problem with exposing bastards is that it often serves as cover for a culture of predators. I remember when Ben Affleck condemned Weinstein, only to have Hilarie Burton reveal that Affleck had openly groped her on film - which the clip showed. The entitlement and hypocrisy that allowed Affleck to face ZERO consequences for publicly groping someone is staggering, as is the fact that even when it became news, BA has faced little to no consequences still. And frankly, if he was willing to openly grope a young woman on camera, what are the chances that he hasn't done far worse off camera? This is rape culture. https://www.youtube.com/watch?v=rzcanJigO6U https://www.theguardian.com/film/2017/oct/11/ben-affleck-apologises-for-groping-hilarie-burton-in-2003 https://www.vox.cm/a/sexual-harassment-assault-allegations-list/ben-affleck On a related note, my wife and I were at an event and happened to meet a young woman who had minutes before been casually propositioned by one of the male stars of Buffydom. She showed us the paper with the actor's number, and seemed a swirl of being flattered, confused and scared all at once, wondering if she should call him and go to his hotel room (against her better judgment). She even asked us what we thought she should do. It was sad. I have no idea what she ended up deciding, but this guy still has a stellar reputation, says all the right things, etc. - and will likely skate past Jossmess 2021 with his reputation even stronger as an ally to women. I'm not saying who it is because it's not my point to tear someone down, and this isn't about 1 or 2 personalities, but a toxic culture of entitlement which allowed JW to be a feminist hero for decades (he won an award!) when many many people clearly knew the rot behind the façade. And were too scared to speak the obvious truth. We still think about that poor lady, even though we only met her for maybe 10 minutes. It really seemed like she just wanted to be a fan, and learned that the celebrity saw no value in her other than a calculated gamble that she would be star struck enough to have casual sex. I'm no moralist - consenting adults can do what they please - but the power differential and crassness of it really bugged me, and still bugs me. You can see literally dozens of examples of similar behavior (and worse) in theexpanse re. the Cas Anwar situation. Anwar was rightly fired, and the expanse fan base seems to be handling the situation extremely intelligently, from what I can see. 3) Outing Whedon's cruelty isn't real progress. Real progress is creating a culture that will not allow similar patterns going forward. I'm deeply concerned that the takeaway for most of us fans is to condemn JW, and allow this to tarnish the legacy of the best tv show of all time. I remain a steadfast fan, and hope that more girls (and boys) will learn a slew of life lessons from Buffy, including:
Many (but not all) guys will say romantic stuff before sex, then act totally differently afterwards. Almost like a curse ;)
A jock's letter jacket is entrancing, but can be dangerous.
A guy like Riley can be sweet and kind and the perfect boyfriend, and still not be good enough for you. Expect more.
If your gut tells you that a guy is not ready to commit, and perhaps only proposed because he though you were both going to die, listen to your gut!
Morality is complex. Guys like Jonathan and Andrew, and gals like like Anya have complicated reasons for the crimes they committed. Understanding, empathy, and helping people cope with the consequences of their actions does not equate to just giving people a pass.
And above all, everyone deserves a chance at redemption. Whether you leave the love of your life at the altar because you're just too immature, or kill 13 frat boys, you get a redemption arc, but only if you sincerely want it.
No one knows if the man who told such compelling stories about redemption will ever have the courage and honesty to face how his actions hurt so many people - and how this pain was likely compounded because his actions were pretty much the antithesis of everything he said he believed in. But stranger things have happened. It snowed once in Sunnydale. https://64.media.tumblr.com/baeaf7dbcf927340f8b1b6b44f922960/tumblr_inline_pkkzl3UA2B1shrb8p_250.gifv [EDIT: minor stylistic changes, plus a couple of fixed typos, and I removed the last line "So I'm leaving the door open" because it mixes metaphors]
A Gambler's Guide to GME. How to use Expected Value to Help Make Decisions.
I am not a financial advisor. This is not financial advice. If you are gambling with money that you need to survive, you are acting irresponsibly. I am doing this ONLY with the speculative part of my position (which is all of it, but still true) and this post is referring to that speculative portion. The expected value (EV) is the anticipated value for an investment or speculation at some point in the future. You calculate all the positive outcomes multiplied by their likelihood of occurrence with the negative outcomes multiplied by their likelihood of occurrence and you will have your perceived expected value. If the number is negative, you are better off getting out and cutting losses. Gamblers win by making positive EV decisions, even if sometimes you have the nuts on the turn and then a fish flops a flush on the river. Expected Value (EV) = ((Total Negative Outcomes)*(Likelihood of Occurrence)+(Total Positive Outcomes)*(Likelihood of Occurrence))
If EV>0 HOLD! DO NOT FOLD! I might consider buying more with funds that I can stand to lose.
If EV=0 Grey Area. You aren't really making a big mistake no matter what you do.
If EV<0 Accept that you lost, time to cut losses and fold. If you are honestly here by your appraisal of the situation, sell. Yes, I said it.
With this speculative portion, the amount that you have already put in is a sunk cost, if you paid $420 a share or $5 a share, that amount is gone. We will only look at the price that it is today. For simplicity, let's say it's $60 right now. So let's say I think that the lowest this stock can go is $30, due to favorable coverage and impressions among zoomers and millenials, who are the primary demographic, along with news of the new internet-savvy hires, the Chewy guy and all that. So negative outcome of $60 to $30 represents a 50% drop. What's my target price? Let's say its $1000, representing a gain from our example's current price of 1,566.67%. Likelihood that it hit's $30 before $1,000, idk, let's say I estimate a 95% chance of that happening first. EV =(-50% loss from current level)(95% likelihood)+(1,566.67% gain)(5% likelihood) EV=(-.5)(.95)+(15.6667)(.05) EV=((-0.475)+(0.7833))=0.3833 (Expected EV is positive from our assumptions, I should HOLD!) And the fabled $69,420? I'm not gonna write out the math on this, but it turns out that the perceived breakeven EV is with a 99.96% chance to fail versus 0.04% chance to succeed at this level. If I thought that the chance of this succeeding was greater than 0.04%, not 4%, 0.04%, I should at least HOLD my position. “SO YOU'RE TELLING ME THERE'S A CHANCE!” “YEEAHHH!” -Lloyd Christmas Now someone might tell me that my assumptions are wrong; that the drop is more or less likely than I presented or could be more (or less). That's fair. I might be wrong, but this is what I am looking at and the way I am looking at it. Do your own DD. (edit: bolded this for all the retards that wanna fixate on the assumptions in my example. I used what I feel is a pessimistic likelihood for effect.) Anyway, hope this puts things into perspective. The Hedge Funds want you to fold your hand at the lowest point possible, because that is positive EV for them. If you can afford to gamble (er, this is the stock market, so um, let's say speculate), these are things to think a bout. TLDR: Based on assumptions of worst case scenarios and their estimated likelihood, along side current prices & target goals, you can make math-based decisions on whether you should sell or hold.
Debrief From My Third Annual 100 Hearts in 30 Days Challenge. (127!).
Hi, I’m sharing data from my recent 30-day a20 heart kill challenge. I was able to kill 127 hearts in 212 runs, a substantial increase both in total hearts killed (previous best was 102) and winrate (don’t remember previous but it wasn’t very close to 60%). This is my third time attempting the challenge. It’s mostly just a ton of fun. It isn’t intended to be a competitive category and I’m sure that it’s possible to go much higher still, especially with strategies that sacrifice winrate, for example forfeiting at the end of bad act ones. Runs are played rotating through characters. I started on Ironclad and ended on Watcher. These runs can mostly be interpreted as me trying to win as often as possible, with the obvious caveats that I’m also trying to complete runs in <1.5 hours and playing 8+ hours a day without a day off for 30 days. Quite a few runs in the dataset were lost to simple calculation errors because my brain was melting, or to not pursuing lines which would trade time for marginal advantages like a better number on Ink Bottle. On a more macro level I tended slightly toward taking high-risk/high-reward lines in runs which were falling behind in order to either get them over with or give myself a higher chance of winning if I continued - stuff like taking more Act 2 Elite fights, fighting Double Orb Walkers, etc. - I don’t think this had a large effect on my winrate (mostly I did this in spots where both options seemed very close in value anyway) but it’s worth noting because it is different from how I’d play when trying to purely maximize my chance to win. You also may want to ignore the runs where I bought Prismatic Shard or took early Signature Move and tried to kill every enemy with it if you’re interested in analyzing “serious” play xD. But I think there are only three of those or something like that. I have been known to meme a little at times. Link to Folder of Run Histories Link to IMGUR album of in-game Run History screens Overall thoughts on the attempt: It took me a while to switch into 1.5-hour run mode. I’d been playing 2-3hr runs for the last 4 months, and the first few days involved a LOT of calculation errors and turns where I spent a long time looking for very specific lines, which works if I’m giving myself a comfortable amount of time to play but fails when I’m time-crunching myself. There were turns where - for example - I’d look for lethal for five minutes when it was immediately obvious that I could just full block and kill next turn, or spend five minutes trying to work out a good reshuffle that was only ~5% likely to be doable to begin with, and spending mental energy on these lines compounded into making mistakes when I didn’t make time to spend mental energy on the things which were more generally important in the run. To give you a numerical idea, I started the challenge 39w-41l over the first 80 runs. Variance definitely exists in a dataset of that size, but that is a LOT worse than how well I was doing once I settled in. Once I dialed in I started doing much better. Especially in the middle of the challenge, lines felt effortless to find and maximizing the minutiae of the game (Ink Bottle on right number types of things) was often automatic. I also started to vibe very well with the limits of each run - there were very few runs where I was dying to elites I could have avoided, or building decks which ultimately couldn’t handle the late-game boss gauntlet. Some of the wins in this period were VERY good wins which I’d be proud to have played even in a non-challenge settings. I managed 52w-26l rotating during this period, including holding 75% winrate for 50+ runs, an 11-0 rotating winstreak (new world record at the time - congrats to Baalor and Terrence, who managed 11-0 and 13-0 respectively later in the same week! Completely insane!, and to CrimsonBlur who managed 10-0 last year on a much harder patch), a 12-0/18-1 Watcher streak (new personal best), and a 9-0 Defect streak (one run short of my previous best from late last year). My Silent and Ironclad did quite well here too. I’ve had moments when I’ve been sharper on calculations or more dialed in on specific characters, but in terms of overall rotating play this is the best period of play I’ve ever managed. Then there was the decline. Turns out doing this involves some mental fatigue. I put a ton of my remaining mental energy into my 11-0 winstreak and never got back to full. I closed out the challenge with 23w-17l, including MANY losses to extremely simple mistakes. Things like not resting before an elite when it was very obvious I was taking 30+ against Gremlin Nob, or entering Wrath with no way to leave it on the turn before the Heart attacked me. What was most interesting to me during this final “exhaustion” period was how many runs I lost on Defect and Watcher to misevaluating my deck’s ability to perform in important fights. I don’t usually have to think at all to be able to have a good idea of whether my deck can win a fight like Book of Stabbing or Time Eater, but at this point in the challenge I was often getting things like that completely wrong, or my brain just wasn’t even registering that it needed to consider them. These mistakes were accompanied by building some quite bad decks which leaned heavily into trying to do things that weren’t actually good enough to overcome the challenges they faced, and an uptick in calculation errors didn’t help at all. I finished the challenge VERY tired but very glad to have committed to it. One of the most enjoyable months of my life, and there were times in there where Slaying the Spire felt like seeing the Matrix. I can’t wait to do it again. Ironclad-specific thoughts (25w-28l): I was 15-5 over my last 20 with Ironclad before the challenge and was expecting to win a lot with him, but I ran poorly and played poorly for a lot of the challenge. Probably the simplest way to describe it would be that I had a string of runs with poor Act 1’s, which led to me overcompensating and putting too much stuff into my deck for Act 1 and Act 2. Then I died a lot to Act 3 and 4, whoops. I adjusted properly for the middle of the challenge, then fell off a cliff when I started getting exhausted. I think the fact that he got played after Watcher runs, which are often calculation-heavy and also which often impose a sense of invincibility on the player, didn’t help much. I relic-swapped the vast majority of these runs, which I found to be less good than it used to be with the buffs to self-damage synergies. Toward the end of the challenge I was only relic-swapping if there wasn’t a very good other option. I still find that Ironclad performs very well on 4 energy, but it’s rough that his character-specific relics aren’t great and that the sustain from his regular starter relic matters a bit more now that Rupture and Hemokinesis are so much better, since you're often taking extra damage in hallway fights in order to have extra power in boss fights. Most of my Ironclad wins are built on strong Act 1 relics and boss relics. His synergies mostly don’t feel strong enough to win on their own, unless you assemble a Corruption or Barricade exodia and/or get multiple Offerings to get everything online. It’s hard to draw cards with him to accelerate your deck, and it’s hard to deal damage without taking damage and hard to block while achieving anything else. It also lowkey tilts me that several of his best cards don’t get better in multiples. If Defect gets offered a second Echo Form it massively improves the deck, but if Ironclad gets offered a second Corruption or Barricade it’s like… maybe you take it to get it in play earlier, sure, but it definitely doesn’t let you play your first three cards twice every turn. General advice: just get Snecko Eye and Corruption every run, ideally with Reaper and Feed alongside. Failing that, the best ways to combine damage and survivability are usually going to be Strength + Reaper with some passable Block cards and good Max HP or Block + Anything; Body Slam isn’t the be-all end-all here, if you have the ability to survive turns with copies of Shrug It Off+ and Exhaust + Feel No Pain you have enough time to kill enemies with a variety of things. Silent-specific thoughts (34w-19l): Not a fan of the Blade Dance buff. Prior to it Silent was possibly my favorite character. The tension between generally needing attack-based damage to survive Act 2 but having difficulty scaling it enough to defeat the endgame gauntlet often led to runs where every floor felt challenging (with the exception of Wraith Form runs. Imagine having a card just make the player invincible for >50% of the game). Now it feels generally easy to not only demolish Act 1 and 2 with attacks, but also scale them into a lategame deck. By the end of the challenge I was building a deck around an attack-generating common that I sometimes hadn’t even gotten one of yet instead of picking Crippling Cloud+’s I was offered, which was not a good feeling at all. I don’t think there’s ever been a common that dominated a character’s strategic space this heavily before. Keep in mind that this is alongside other buffs as well. It used to be that a deck that dealt damage with a lot of attacks needed creative solutions to Time Eater and the Heart and stomped everything else, but now it’s often the case that it just stomps everything full-stop. It doesn’t help that Silent’s starter relic plus Acrobatics and Calculated Gamble were already so strong at accelerating. Now you can play your attack common on turn 1 and discard four Shivs to draw four more cards toward your copies of Adrenaline and Footwork etc., so not only does it deal 16 for 1, count as five cards for Ink Bottle, play four attacks for Shuriken, and have the ability to be targeted at separate enemies, but it can also combine with a strong Uncommon to be Skim+. This is too strong :/. General advice: Take enough damage cards/relics to kill things and then make sure you can survive 40 incoming damage on the turns you need to - relics and potions are sometimes all you need, but damage options are also so strong that you can get away with dedicating a significant portion of your deck to mitigation. Also: don’t Relic swap unless the other options are incredibly bad. Bag of Preparation is insanely good and with this character you can get two. Defect-specific thoughts (29w-24l): Defect is a beautiful character right now and often provided the most entertaining run of the day. The general yin-yang pull of needing to be able to survive vicious fights in Act 2 and 3 but also needing to be able to scale into a deck that beats the lategame gauntlet compartmentalizes into lots of interesting decisions about when it’s okay to add so-so orb-scaling cards to your deck, and how exactly you’re going to throw together a combination of 25 atrocious attack cards, Ball Lightning, Doom and Gloom, and Electrodynamics to deal damage to things. (My advice is to just get offered Ball Lightning, Doom and Gloom, and Electrodynamics so you don’t have to think too hard. Static Discharge does okay sometimes too). I love the way runs “typically” revolve around fairly normal attack-based clears of low-hp enemies into fairly normal block-scaling to survive lategame fights long enough to kill them however you’d like, but sometimes completely go off the rails. I got to play a ridiculous 3x Hyperbeam/3x Meteor Strike run (without Snecko Eye), for example. I also love being offered Stack. Hello World + Stack scaling led to a couple of other immensely enjoyable wins. It’s very funny to me to have a Defragment+ and Glacier in my deck, be thinking “oh yeah, I have premium uncommons that block super well!”, and then be offered Stack and be forced to admit that an unupgraded common usually blocks better than they do. I think Defect is the best-positioned character in terms of Whale Bonus balance right now. I’ve found it to generally be correct to relic swap unless there is a very strong alternative or a path which allows me to get a lot of value out of my Lightning Orb. General advice: Kill early and midgame stuff with whatever option gets in the way of your lategame scaling least. Compile Driver and Sweeping Beam draw cards, Electrodynamics and Static Discharge remove themselves from your deck (also Static is OP with Frost Orbs against multiattacks), Ball Lightning and Doom and Gloom are 2+ attacks worth of damage in one card, etc. Then make sure you scale and can accelerate into that scaling. Fission, Seek, Skim+, Turbo+, Bag of Preparation, Bottles, etc. to get your deck to a point where it’s outputting 40+ block per turn and the run is over. Watcher-specific thoughts (39w-14l): The great thing about Watcher is that almost every run you lose is entirely your fault. Probably somewhere between one and three of these runs were lost to an unlucky result of close-to-correct play, and every other one was me building my deck wrong for a fight, piloting it wrong, picking the wrong potion or relic, etc. I haven’t generally enjoyed Watcher in the past, and have mostly not been playing her for the last year (or when I have I’ve been occasionally forfeiting Act 3 because I’m bored of clicking on Cut Through Fate and Tantrum over and over again), so I felt like I actually learned a significant amount about the character in this challenge. My general Watcher-heuristics right now are: Pretty much every type of synergy draws cards, makes block, and some of them even make energy, so it’s fine to have lots of different synergies in the same deck as long as they aren’t too awkward to get rolling. If you just take the best card offered to you every time you should still easily be winning 70+% of your runs. Getting better at Watcher seems to largely be about first realizing that Talk to the Hand, Mental Fortress, Tantrum, and Rushdown are obscenely overpowered, and then realizing the ways in which every single other card is obscenely overpowered as well. (Except Pressure Points, lol). Hexaghost can kill you if you don’t take enough damage cards, Act 2 Elites can kill you if you don’t have enough health banked for them or didn't take attacks properly, Time Eater can kill you if your deck is very bad at dealing damage or very bad at blocking, and the Heart can kill you on turn 2 or 3 if you are bad at accelerating your synergies. Other than that it’s unclear that Watcher can ever die unless you click the cards wrong or get incredibly incredibly incredibly unlucky AND don't have potions available to compensate for it. I actually quite enjoyed Watcher this challenge and look forward to playing her more. The lategame gauntlets were sometimes a lot more interesting than I thought they would be, with my win to go 10-0 in my 11-0 streak being one of the coolest Heart fights I’ve ever played. It’s just a bit unfortunate that like, her cards are so strong that I take Pandora’s Box over anything, the most interesting thing about most fights she plays is working out how to Lesson Learned with Ink Bottle on the right number, and the times that you do legitimately lose are to ridiculous things like drawing three copies of Omniscience in your opening hand. (And that she’s so strong that you find yourself questioning if that was your fault and you should’ve not taken the third Omniscience so that this couldn’t happen when that happens to you). I personally tended to avoid Boss Relic swap on her because it didn't seem like I needed four energy to win anyway, and the upsides that the Boss Relics turn off often seemed more impactful than the bonuses they were providing, but you can certainly win almost every run with her by Relic swapping too. Overall Takeaways: The game is a bit easier than I’d like right now. It seems hard for the devs to add more ascensions, but balance is starting to break a bit at a20 and I hope they go very easy on the buffs in the future. The Blade Dance buff was a massive correction to a problem that I don’t think was actually a problem. I don’t like that Boss Relics are so strong that trading Boss Relic is a common start, and don’t like that the cardpools have gotten so strong that Transforming cards is generally correct. Balancing such that high-variance options are correct leads to an increase in the frequency of runs where the balance breaks very quickly. I'd personally prefer if these options were usually slightly -ev, so that they were available for runs where you needed a chance to highroll but incorrect the rest of the time. Last challenge I felt like I was engaged ~80% of the time, with ~10% of the time I was unengaged being because the run was completely won already and ~10% of the time I was unengaged being because the run was almost certainly lost and I was treading water until something killed me. This time those numbers were more like 75/20/5. Game is very very good though, and I hope you enjoy this set of runs if you decide to check them out! <3, jorbs
Alright you smooth brain degenerates, here’s some shit I’ve learned along the way which probably wont help you but if it even remotely helps one of you, then I have achieved the goal of this post. To quote that old guy: price is what you pay, value is what you get. But how do I value a company? I’ve seen it posted a bunch of times. Its more of an art than science, so let’s discuss this dark art. It constantly boggles my mind at how many cunts dive into buying shares but do not even attempt at trying to think of a realistic valuation, backed up by some sort of financial measure. “What price should I exit at” is almost the equivalent of setting off on a road trip before you have decided on a destination. I accept this view could, and should, evolve over time so asking the question in itself is not unreasonable provided you have your own view. I know this is a casino and this shit is irrelevant for gambling but I’ll continue regardless. One thing I also see a lot of which I’d like to debunk is the concept of a $5 share price being “cheaper” than a $6 one. Companies, at IPO or any time afterwards, can make their share price whatever they want. A market cap of $100m with 100m shares gives a SP of $1. If they issue less shares, the share price goes up, and the company’s equity value has not changed. Likewise when you do a stock split / consolidation you can adjust the per share price without changing the market cap. If this doesn’t make sense, get off this sub and do not invest in anything until you grasp this, seriously. The concept of “cheapness” comes from the amount of cashflows you expect to receive for a given price. As Wu-Tang told us; C.R.E.A.M. literally all we care about is cashflow, so keep that in mind when you’re thinking about future value as well. Before I launch into valuation, there needs to be a high-level understanding of the difference between equity value (share price, market cap) and firm/enterprise value (market cap + net debt). You should also adjust firm value for minorities and associates, but let’s keep this as simple as possible. This is relevant when looking at ratios. The other thing to understand is: valuation (and therefore share price) is a forward-looking beast. If you imagine the hypothetical situation where a company announces a record earnings year in conjunction with a plan to cease all operations, share price would obviously tank – no one gives two fucks that they had a record year if they are closing next year. Let’s dive in. Broadly, there are two valuation methods: fundamental and relative. Fundamental: Few of ways to do this, but main one you’ll see finance cucks talk about is a DCF. This is all about calculating the NPV of future expected cashflows. People shy away from these because they think they are hard. DCFs aren’t complicated, but there are a shitload of subjective assumptions that go into them which, unless you’re prepared to think at a highly granular level about, these aren’t worth the paper they are written on. IRR is just the discount rate required to achieve a NPV of 0. There’s other ways like dividend discount models but they require stable AF dividends to work. Relative: This is referring to multiples like P/E, EV/EBITDA, PEG, EV/FCF, P/sales etc etc. These are quick and dirty and will give an answer in seconds. They’re only truly useful when comparing similar companies. i.e “is afterpay good value compared to zip?”. Rarely will using one in isolation give you an accurate or useful view of a company. Again, no one gives a flying fuck about what historical multiples are. So, the slightly nuanced thing here is ideally you need a forward-looking number. Historical numbers usually do provide the best guide/context available for future numbers, so we can’t say they are completely irrelevant, but always have your eyes on the road ahead, not in the rear vision. Examining the P/E multiple, I touched on why historical ‘E’ could be irrelevant for major changes in operations (acquisitions, divestments etc.), but as the capital structure changes this can also impact ‘E’, so you would also need to adjust for any permanent changes in that regard. Point is, be wary of the traps in historical numbers, they’re the easiest to find but not always the most useful. Generally speaking, people aim to use a denominator as low down on the income statement as possible, as its closest to what you receive as a shareholder. EBIT and EBITDA are sometimes used as a proxy for cash. Equity markets most commonly look to NPAT (P/E), however if its loss making you might need to go to EV/EBITDA, if its capital intensive you should look at EV/EBIT. Note that you use EV as the numerator for EBIT and EBITDA for capital structure neutrality. If it’s a meme stock with no EBITDA then maybe you are looking at a sales multiple, if no sales, well, you have to have a compelling thesis as to what you are buying if they can’t sell their products to anyone else. Some are industry specific (e.g you can’t use EV/EBITDA on a bank, and you wouldn’t value BHP on a P/sales or you’ll look like an idiot pretty quickly). The higher the multiple, the more growth the company has to deliver on to justify the price. If two identical companies had different multiples, you could (sort of) fairly say that the higher one was “more expensive”. Given multiples change depending on growth (i.e in a company with positive growth, multiples decline the further you look into the future), it’s easy to then understand that these must be time sensitive. If you are comparing a multiple in 12 months time, it should only be compared with other multiples in with the same time frame. Sometimes, if you can’t be fucked doing a heap of work it can be useful to reverse the question and ask, “what do I actually need to believe for a valuation of $x to be true?”. Doubt anyone is reading by now so I’ll stop there. If there’s any interest in diving further into these concepts, shout out and I will gladly help. If all the fundamental shit gets you excited there’s a bunch of better resource out there, don’t trust reddit and go read Damoderan or something. This is a very brief intro, so before someone comments “you forgot to include bullshit method xyz that my great grandad used when he was doing a leveraged buyout of Dildos Anonymous Pty Ltd in 1969”, I’ll get in first and highlight it is not even close to being exhaustive. Peace out and stay retarded. Here’s a rocket 🚀 TLDR; boring valuation shit discussed above. Not relevant to gambling.
Note: BlackBerry is NOT a cyber security company. They are a security company. Revenue does not care about your AI driven autonomous machine learning EV car with DDs. People are using these terms loosely. A quick lookup for interviews with John Chen would prove that he explicitly avoids these terms as they do not define nor matter to the products/revenue of BlackBerry. QNX revenue does not depend on any of these terms, it's on installation on any device. This includes the space station, of which there is 1 of with obviously non-recurring revenue. Buying based on these basis would be gambling. Bull:
Business transformation: BlackBerry is now a software company, starting the transformation in 2015. The focus is security, the general term.
5 Products:
QNX: Embedded system OS.
Multi-OS housing: It has the capability to allow for multiple OSs on a single chip.
Real-time availability/software prioritization: Not all pieces of software operate on the same priority. Steering/braking would be higher priority than media, and QNX allows for that. Even if the thread/core is shared with other applications, when high priority software is requesting a resource it will be prioritized to ensure reliability.
Resource sharing: CPU, RAM, and GPU resource sharing between different applications capability. Two applications can share the same CPU core and bump each other based on prioritization.
Why not Linux? QNX has the highest certification for security available. Linux does not. CEOs would want to avoid liability and this certification allows for that.
Device agnostic: It can be installed on any device, not just cars. Any IoT and offline device can use QNX.
QNX Hypervisor: Consolidate multiple OSs on a single SoC using virtualization
SoC: System on a chip. Instead of using multiple ECUs, which is what car manufacturers currently do, they can use one single chip to run multiple high priority applications and multiple OSs. This is what Tesla does now.
Virtualization: Running an OS in a virtual environment. Think Linux environment inside of Windows. This helps with debugging for developers without having to have the actual hardware.
IVY: Scalable cloud-connected software platform for vehicles.
What is it a solution for? When a vehicle manufacturer wants a way to transmit the QNX/OS data safely, normalize it, and visualize it/interact with it. It also allows car manufacturers to own the data, unlike other OSs.
Scalable: AWS servers are capable of handling the load from many endpoints.
Software platform: There is currently no centralized software ecosystem for vehicles. IVY is providing that.
Non-BB developers would be able to use an SDK to develop applications on IVY for infotainment/general apps/others. IVY will also use ML to gain insight on unrecognized patterns by developers. An example of this is detecting if a car slipped, without having the developer connect multiple sensors to figure out if that event happened.
50/50 joint effort on revenue and effort to develop the ecosystem. Using AWS's knowledge in AI/ML for calculated sensors (slip, driver on seat, etc)
Usage by other vendors: A city can connect to the data from vehicles and detect when ice/slipping is happening. If brakes are getting overheated coming from a high elevation area. If a car had an accident, etc. An insurance company can provide an app to give discounts similar to the currently implemented OBD-2 readers. A maintenance provider can also connect to this data and check if an error is specific to maintenance, malpractice, or general misuse.
Spark: Endpoint management. Basically API security. Did not delve far into this, basic info.
Unified Endpoint Security: This is the endpoint where a laptop/phone/IoT device hits. It provides encryption and security around that. Continuous authentication is a part of it, where a device is learning the user behavior using ML and continuously checking if the behavior matches the original owner; if not, lock the device.
Unified Endpoint Management: Basically managing your API for devices.
Zero trust: I think this is specifically talking about continuous authentication. Basically, it's not an authenticate once and forget it. It's constantly tracking behavior to verify the user is the authenticated user.
AtHoc: Non-enterprise communication system.
Target customers: Government, healthcare, education, etc.
Solution: A communication system targeting non-enterprise businesses; specifically for Event management, cross organizational communication/collaboration, mass notifications.
Who does this benefit? You've seen the hacks in healthcare/educational/governmental sector. This is specifically for them.
SecuSUITE: Phone application to allow employees to use work related data in personal devices without cross communication (between personal and work data).
End to end encryption.
Separation of concerns between personal and work data. Employers CANNOT access your personal data.
Used by NATO; doesn't carry much value in my book but maybe in yours.
Customer oriented solutions: As you've seen in the products above, some products overlap and are just names to target specific customers. It allows customers to easily understand what product could solve their issue. Continuous authentication is a great example of this: Their customer complained that they kept re-authenticating, so they designed a solution allowing them to authenticate once and using ML they learned their behavior and can continuously check if the user is the owneauthenticated user. This kind of passion in leadership is good for business.
Liability: QNX has the highest security rating available. Most CEOs want to avoid liability when it comes to security, using QNX would help them avoid that in a similar way cloud services help them avoid being blamed for hacking.
Leadership: BBs leadership isn't one to play on famous words to drive the stock up. John Chen explicitly states this in his interviews and says they are a security company. Not cyber, doesn't mention AI or whatever. He explicitly avoids meme words and understands what the point of BBs business is.
Where I think growth can be made:
QNX in more cars. They can capitalize on the idea of less ECUs = less cost for OEMs + security.
IVY usage by OEMs along with QNX.
IVY ecosystem. Maybe application billing?
Professional services (support) for the products listed.
AtHoc increased market share in more governmental/healthcare/educational entities.
SecuSUITE for more enterprise customers with the idea being saving employers money from purchasing work phones for employees, and worrying about securing them.
Bear:
Revenue: It is not yet based on a subscription/usage basis. You can only produce so many cars, and they don't give an insight on how much do they charge per car for QNX. Anywhere from $2 - $20 is what was mentioned in transcripts. This is a growth area, but not at a trajectory that's excellent. IVY does work on a subscription/usage basis, but IVY can be used WITHOUT QNX. I'm worried about this, but still see it as an area that will generate revenue in the range of $400 MM - $600 MM at the price of $20 per 30M cars. The 30M per year is based on the listing of their customers and their yearly production rates. Keep in mind I stated any device, this does not include trucks or other IoT devices.
Market share: These are relatively new products. J.P. Morgan pointed this out as a priority for growth. This could end up not working out and growth never happens. This is a relatively low risk due to QNX and IVY providing SO MUCH value for car manufacturers Vs. other products in the market.
Patent revenue: They sold a chunk of their no longer relevant patents to Huawei. This makes up a small (<= 32%) of their revenue and is a one time sale. The coming quarter could be equal or less to the last quarter revenue due to either other sales making up the lost revenue from patents, or coming up short. It could come higher if they sold more services, but due to COVID and knowing that many car manufacturers have lowered their production due to chip shortage, the next quarter will most likely be lower.
VW.os: VW is making their own OS. VW.os is what they're calling it. They're currently using QNX, but that revenue could potentially stop. Personally I don't believe VW is capable of doing that. It's a marketing hype. Their companies are not capable of good collaboration or good implementation based on what I've read and researched (can't find article right now), but it's something to be concerned about.
QNX success: While IVY could be using QNX, it does NOT depend on it. There is potential for OEMs to use IVY without QNX. I think this is a low risk, but still risk. 19 OEMs are already using QNX.
Lack of Answers: I can't get much out of their earnings call. They don't delve into pricing for QNX, how they plan to grow it besides getting more car manufacturers and more cars post Corona. How they plan to do recurring revenue. A breakdown of each revenue segment would be helpful, but I don't see that either and there is hesitancy to delve into it.
Prediction: I think QNX can become a $1B revenue per year alone. $2B revenue per year as a company is not far fetched. Without a subscription/usage based model, it is difficult to see how growth can go beyond that. BB is good in 2-5 years, not this year. I can see their revenue growing to potentially $2B - $4B revenue per year. They did mention trying to figure out a subscription/usage based billing, if done then the revenue would be much higher. I think $18 is a fair price on the high end. It could grow further than that, but expectations would be HIGH. Resources:
Position: 1,500. Disclaimer: I don't know everything, I may be incorrect about some things. This is based on what I've researched and to the best of my ability. Do your own DD. Obligatory this is not an investment advice.
Note: BlackBerry is NOT a cyber security company. They are a security company. Revenue does not care about your AI driven autonomous machine learning EV car with DDs. People are using these terms loosely. A quick lookup for interviews with John Chen would prove that he explicitly avoids these terms as they do not define nor matter to the products/revenue of BlackBerry. QNX revenue does not depend on any of these terms, it's on installation on any device. This includes the space station, of which there is 1 of with obviously non-recurring revenue. Buying based on these basis would be gambling. Bull:
Business transformation: BlackBerry is now a software company, starting the transformation in 2015. The focus is security, the general term.
5 Products:
QNX: Embedded system OS.
Multi-OS housing: It has the capability to allow for multiple OSs on a single chip.
Real-time availability/software prioritization: Not all pieces of software operate on the same priority. Steering/braking would be higher priority than media, and QNX allows for that. Even if the thread/core is shared with other applications, when high priority software is requesting a resource it will be prioritized to ensure reliability.
Resource sharing: CPU, RAM, and GPU resource sharing between different applications capability. Two applications can share the same CPU core and bump each other based on prioritization.
Why not Linux? QNX has the highest certification for security available. Linux does not. CEOs would want to avoid liability and this certification allows for that.
Device agnostic: It can be installed on any device, not just cars. Any IoT and offline device can use QNX.
QNX Hypervisor: Consolidate multiple OSs on a single SoC using virtualization
SoC: System on a chip. Instead of using multiple ECUs, which is what car manufacturers currently do, they can use one single chip to run multiple high priority applications and multiple OSs. This is what Tesla does now.
Virtualization: Running an OS in a virtual environment. Think Linux environment inside of Windows. This helps with debugging for developers without having to have the actual hardware.
IVY: Scalable cloud-connected software platform for vehicles.
What is it a solution for? When a vehicle manufacturer wants a way to transmit the QNX/OS data safely, normalize it, and visualize it/interact with it. It also allows car manufacturers to own the data, unlike other OSs.
Scalable: AWS servers are capable of handling the load from many endpoints.
Software platform: There is currently no centralized software ecosystem for vehicles. IVY is providing that.
Non-BB developers would be able to use an SDK to develop applications on IVY for infotainment/general apps/others. IVY will also use ML to gain insight on unrecognized patterns by developers. An example of this is detecting if a car slipped, without having the developer connect multiple sensors to figure out if that event happened.
50/50 joint effort on revenue and effort to develop the ecosystem. Using AWS's knowledge in AI/ML for calculated sensors (slip, driver on seat, etc)
Usage by other vendors: A city can connect to the data from vehicles and detect when ice/slipping is happening. If brakes are getting overheated coming from a high elevation area. If a car had an accident, etc. An insurance company can provide an app to give discounts similar to the currently implemented OBD-2 readers. A maintenance provider can also connect to this data and check if an error is specific to maintenance, malpractice, or general misuse.
Spark: Endpoint management. Basically API security. Did not delve far into this, basic info.
Unified Endpoint Security: This is the endpoint where a laptop/phone/IoT device hits. It provides encryption and security around that. Continuous authentication is a part of it, where a device is learning the user behavior using ML and continuously checking if the behavior matches the original owner; if not, lock the device.
Unified Endpoint Management: Basically managing your API for devices.
Zero trust: I think this is specifically talking about continuous authentication. Basically, it's not an authenticate once and forget it. It's constantly tracking behavior to verify the user is the authenticated user.
AtHoc: Non-enterprise communication system.
Target customers: Government, healthcare, education, etc.
Solution: A communication system targeting non-enterprise businesses; specifically for Event management, cross organizational communication/collaboration, mass notifications.
Who does this benefit? You've seen the hacks in healthcare/educational/governmental sector. This is specifically for them.
SecuSUITE: Phone application to allow employees to use work related data in personal devices without cross communication (between personal and work data).
End to end encryption.
Separation of concerns between personal and work data. Employers CANNOT access your personal data.
Used by NATO; doesn't carry much value in my book but maybe in yours.
Customer oriented solutions: As you've seen in the products above, some products overlap and are just names to target specific customers. It allows customers to easily understand what product could solve their issue. Continuous authentication is a great example of this: Their customer complained that they kept re-authenticating, so they designed a solution allowing them to authenticate once and using ML they learned their behavior and can continuously check if the user is the owneauthenticated user. This kind of passion in leadership is good for business.
Liability: QNX has the highest security rating available. Most CEOs want to avoid liability when it comes to security, using QNX would help them avoid that in a similar way cloud services help them avoid being blamed for hacking.
Leadership: BBs leadership isn't one to play on famous words to drive the stock up. John Chen explicitly states this in his interviews and says they are a security company. Not cyber, doesn't mention AI or whatever. He explicitly avoids meme words and understands what the point of BBs business is.
Where I think growth can be made:
QNX in more cars. They can capitalize on the idea of less ECUs = less cost for OEMs + security.
IVY usage by OEMs along with QNX.
IVY ecosystem. Maybe application billing?
Professional services (support) for the products listed.
AtHoc increased market share in more governmental/healthcare/educational entities.
SecuSUITE for more enterprise customers with the idea being saving employers money from purchasing work phones for employees, and worrying about securing them.
Bear:
Revenue: It is not yet based on a subscription/usage basis. You can only produce so many cars, and they don't give an insight on how much do they charge per car for QNX. Anywhere from $2 - $20 is what was mentioned in transcripts. This is a growth area, but not at a trajectory that's excellent. IVY does work on a subscription/usage basis, but IVY can be used WITHOUT QNX. I'm worried about this, but still see it as an area that will generate revenue in the range of $400 MM - $600 MM at the price of $20 per 30M cars. The 30M per year is based on the listing of their customers and their yearly production rates. Keep in mind I stated any device, this does not include trucks or other IoT devices.
Market share: These are relatively new products. J.P. Morgan pointed this out as a priority for growth. This could end up not working out and growth never happens. This is a relatively low risk due to QNX and IVY providing SO MUCH value for car manufacturers Vs. other products in the market.
Patent revenue: They sold a chunk of their no longer relevant patents to Huawei. This makes up a small (<= 32%) of their revenue and is a one time sale. The coming quarter could be equal or less to the last quarter revenue due to either other sales making up the lost revenue from patents, or coming up short. It could come higher if they sold more services, but due to COVID and knowing that many car manufacturers have lowered their production due to chip shortage, the next quarter will most likely be lower.
VW.os: VW is making their own OS. VW.os is what they're calling it. They're currently using QNX, but that revenue could potentially stop. Personally I don't believe VW is capable of doing that. It's a marketing hype. Their companies are not capable of good collaboration or good implementation based on what I've read and researched (can't find article right now), but it's something to be concerned about.
QNX success: While IVY could be using QNX, it does NOT depend on it. There is potential for OEMs to use IVY without QNX. I think this is a low risk, but still risk. 19 OEMs are already using QNX.
Lack of Answers: I can't get much out of their earnings call. They don't delve into pricing for QNX, how they plan to grow it besides getting more car manufacturers and more cars post Corona. How they plan to do recurring revenue. A breakdown of each revenue segment would be helpful, but I don't see that either and there is hesitancy to delve into it.
Prediction: I think QNX can become a $1B revenue per year alone. $2B revenue per year as a company is not far fetched. Without a subscription/usage based model, it is difficult to see how growth can go beyond that. BB is good in 2-5 years, not this year. I can see their revenue growing to potentially $2B - $4B revenue per year. They did mention trying to figure out a subscription/usage based billing, if done then the revenue would be much higher. I think $18 is a fair price on the high end. It could grow further than that, but expectations would be HIGH. Resources:
Position: 1,500. Disclaimer: I don't know everything, I may be incorrect about some things. This is based on what I've researched and to the best of my ability. Do your own DD. Obligatory this is not an investment advice.
Greeting Theta Gang boys and girls, I hope you're well and not bankrupt after last week. I'm just now recovering mentally myself. I saw a few WSB converts and some newbies asking for tips, so here you go. V2 of my Options guide. I hope it helps. I spent a huge amount of time learning about options and tried to distill my knowledge down into a helpful guide. This should especially be useful for newbies and growing options traders. While I feel I’m a successful trader, I'm not a guru and my advice is not meant to be gospel, but this will hopefully be a good starting point, teach you a lot, and make you a better trader. I plan to keep typing up more info from my notebook, expanding this guide, and posting it every couple months. Any feedback or additions are appreciated Per requests, I added details of good and bad trades I made. Some painful lessons learned are now included. I also tried to organize this better as it got longer. Here's what I tell options beginners: I would strongly recommend buying a beginner's options book and read it cover to cover. That helped me a lot. I like this beginner book: https://www.amazon.com/dp/B00GWSXX8U/ref=cm_sw_r_cp_apa_OxNDFb2GK9YW7 Helpful websites:
Tasty Trade (TT) and Ally Invest have helpful articles and videos.
ITM: In the money; strike is below stock value. Signif
ATM: At the money; strike is just at or above the stock value, often very highly traded. Can be very effective with moderate - long term expiry.
NTM: Near the money; strike is above the stock value, but fairly close. Slightly unofficial term.
OTM: Out of the money; price is at least a few strikes from the current stock price. I would say 10-30% over stock price.
Very OTM: Not a real definition, this is essentially a lottery ticket. Cheap, but almost certain to expire worthless unless there is explosive movement.
Understand delta in general and how delta changes with ITM and OTM options.
IV, IV crush, and how IV affects pricing. In general, you want to sell when IV is high and buy when the IV is low. Increasing IV is good for held calls/puts. IV drop or crush is generally good for sellers.
Selling options can be quite beneficial. Once you have a good general understanding, lookup thetagang . Kamikaze Cash has good youtube videos on most theta strategies (linked above). I personally believe selling options (especially cash secured) is much safer and can consistently make you profits. Θ Gang 4 life.
FOMO and how to avoid chasing a dangerous trend. DO NOT CHASE FROM FOMO!
What intrinsic and extrinsic value are. Know how they are affected by being exercised/assigned and how theta affects them.
Understand that some of WSB recommendations are straight up high-risk gambling and factor in the information accordingly. Be careful with Meme stocks and the survivorship bias on YOLO plays. However, I love the sub and think it’s hilarious. It has a lot of valuable information / DD if you are comfortable with the “colorful” language. It’s also great if you like rocket ship emojis.
Basics / Mechanics
Understand the 4 "main" option types. Buying or selling a call and buying or selling a put. Spreads and more complex multi-legged option strategies are based off these in some way (see below)
You can sell calls with 100 shares of stock or if you own an underlying longer term option; see LEAPS and PMCCs later. Selling calls naked is incredibly risky and often requires Level 4 (very advanced) permissions and usually a lot of capital. I will literally never sell calls naked since I don't want to ruin my life and end up living in a dumpster eating saltine crackers.
Puts can be sold/written cash covered (cash secured), which means you have the cash in your account to buy 100 shares. Your broker will put this money on hold until the trade is closed. Puts can be sold "naked" using Margin and Level 3 (with most brokers). Your broker will hold a percentage of cost of 100 shares (often 30-40%, 100% on meme stocks) allowing you to sell more puts. This increases your available capital/power as well as increasing risk.
General Tips and Ideas:
Don't EVER leave (short) spreads open on expiration day, close them. (more details below)
Start off trading very small. Slowly build up over weeks / months. You need to get accustomed to a fifty dollar swing a day, then a few hundred, then a few thousand. You need to ensure you don't get emotional (see below). I started trading options with 5k, then 25k, 50k, and later over 100k. I added my own funds over time and used my gains to build my account. Don’t go all in immediately, that’s dangerous and unwise.
Especially as you build up the amount of money you have invested, keep it diversified among several stocks.
Don't go all in on one thing, ever. Be able to take a hit from one stock and not mortally wound your portfolio.
A company may be doing great, then there's a major product issue out of nowhere. If you are overexposed in one stock this can really hurt you.
I had to roll options I sold that were about to expire completely worthless because FDX's CEO changed and the stock took a hard dip.
Don't trade emotionally. If you realize you are emotionally trading for vengeance, you should probably exit the trade and cool off for several days with that stock. Same if you get caught up in a wave of hysteria.
Have a plan for every trade, ideally with entries / exits that are specific values, ranges, or a set condition. This helps remove emotions. This is super important for strong movements and high volatility (see later).
Use an options profit calculator from your broker or an online one before entering a "new" trade, especially a complex multi legged trade: https://www.optionsprofitcalculator.com/
“Rolling” an option: Closing your existing option and opening a similar one at different strike and/or expiration.
Rolling a call “Up” would be selling a call you own and buying a cheaper call at a higher strike.
Rolling a put “Down and out” closes your original one and buying or selling one at a lower strike at a longer expiry.
Better broker interfaces have a literal “Roll” button. I know E-trade does. You can manually do it by selecting relevant contract legs.
If you have a losing trade, re-evaluate it. If your initial assumption is definitely incorrect, close it. Don't stay in losing trades forever and lose the entire value of the option over stubbornness. If you re-evaluate and you think your assumption was right, hold, potentially consider adding another cheaper option (or buy another call / put). Rolling out sold options can help here.
Don't try to day trade, especially with options. It's statistically unlikely to be profitable. Day-trading with options introduces extra liquidity risks and is dangerous, especially with spreads.
Try not to over-trade, you'll likely mis-time the market over time. When I get emotional I over trade, then lose additional money on wash sales. If you scale your entries into positions it should help alleviate your desire to exit positions when they turn badly against you. Whenever I buy calls I do it at larger increments after W almost made me loss my hair; luckily it eventually came back.
NEVER enter a position on a stock you have no idea about, especially when you read about it online or heard about it from some rando.
At market open options contracts are often volatile and inflated. Buying during this time can be more expensive. Options are usually cheaper mid-day, I read somewhere 2-3PM is cheapest. I’ve had success around 12-1PM EST after prices settle.
Try wheeling on cheaper stocks once you get all fundamentals down.
When selling puts if you are very bullish consider "doubling down"; note this is higher risk. Use the credit from your put sale to buy shares or a cheap call. This can be roughly inversed with puts, except I wouldn't ever recommend shorting shares.
Learn from your mistakes. You can’t go back in time and beating yourself up (to a point) is useless. Make a physical &/or mental note of it so you don’t do it again. If you don’t learn from it, then beat yourself up so you won’t do it again.
If you have friends that like to trade, I find it helpful to discuss strategies and planned plays. I talk openly with my close friends about my current holdings and planned trades, it helps keep me accountable. If I get a wide-eyed look, I might be doing something excessively risky or stupid. I’ve over-leveraged myself in calls twice and I knew I shouldn’t have done it both times. When I tell my friends what I did and I’m embarrassed, it exemplifies the face that I shouldn’t have done it in the first place. You will also get ideas for new strategies or plays from them. It’s good to stay versatile and use multiple strategies when appropriate. Beware of group think/echo chambers.
I recommend NEVER telling someone what to buy/sell and when. I’ll tell people MY plays or what I like and why, but I will not encourage them to emulate what I do. Depending on the audience, I’ll tell them my exact positions along with my exit and entrance strategy. With closer friends I’ll offer my thoughts on their trades (if asked). If my friend is doing something really risky (one of my friends does some scary stuff) I may ask them if they want my advice, and provide it, especially if they overlooked a risk/event. I will not encourage someone to execute/enter a trade since it has a high potential for hurt feelings or animosity all around.
Don’t fall in love with a stock. Just because something made you money before and you have high confidence in it doesn’t mean it will keep performing. I joke that FDX betrayed me when it started dipping and losing me money. I was over-confident of its bounce-back and sold too many puts too quickly. I’m in several losing trades because of it. However, I will keep good stocks in my rostetracking list or try different strategies or re-enter trades when they change their behavior.
As you start to both buy and sell options and get more experience in general, you'll start seeing the two sides to every trade. You will likely start adjusting your strategies or trying new trades out because of this. Things will likely click one day. Most/all the greeks and options concepts will become almost second nature. For me this was when I could build an Iron Condor from scratch, which was a watershed moment involving a good understanding of many strategies.
Understand Liquidity and volume.
Trading in low volume, low open interest contracts results in wide bid/ask spreads and difficulty having your contracts filled. Look at all the data for a contract, not just the strike and price.
Monthly Expiration dates typically have better liquidity.
Multi-legged trades (Common examples are 2-legged vertical spreads or 4-legged iron condors) have more difficulty being filled, especially on bad brokers like Robin Hood. Having very liquid options for all legs is extremely helpful in obtaining timely and well-priced fills, which maximize your potential profits.
Time in market vs timing the market:
It is extremely difficult to time the market perfectly. If you wait for the perfect opportunity forever, history has proven you will miss out on gains. Keeping all your money out of the market has proven to be ineffective. Now if there is something serious happening with a stock/the market (like say a new pandemic), don’t go all in. I recommend entering incrementally at dips. If the stock has huge upside potential it may never go down, so it might make sense to partially enter at the current price.
IMIO selling puts is a great strategy to get into a stock you like, or at least make money off it. I think buying stock in lots of 100 is usually for suckers. Selling an ATM or ITM put (assuming the math works out) on a stock you were going to buy and hold is ALMOST free money.
I recommend keeping some cash available regardless. If you have a very large account or expect a downturn, hedging with indexes like QQQ, SPY, or VIX or calls/puts may be wise.
Every trade can't be a winner. You will take some losses, you must get used to it. I don’t like having a realized loss of 1K or more on any trade. However, this will happen, especially with larger accounts.
As long as you win more often and beat the S&P that year I consider it okay. I’m kind of aggressive, so I consider 20%+ annually good. 30%+ annually is great. 40%+ and I’m dancing. After trading options I am almost baffled by my old belief that 5% annual returns (mostly from dividend ETFs) was “good”. That’s nothing to me now since I’m willing to take risks. Note: While lots of people danced in 2020, realize that’s an insane Bull Run year and is atypical.
Adhere to your own risk tolerance and never over-extend yourself, especially with margin use. Don’t make huge gambles leaving you uncomfortable. Only gamble with money you are willing to lose.
My personal strategy is to make safer gains for the year and then enter slightly riskier strategies using those gains. I can be slightly-moderately more aggressive and compound my gains. For me I often sell puts to make money, then when I see a big opportunity I’ll sell a put and buy an OTM or moderately ITM call.
Understand it’s not safe to try and get rich overnight. However, once you hit big “steps” things may start to snowball. You can enter more positions and take more risks if you choose to.
For me this when I hit 50k, then 100k. I was able to balance low and moderate risk positions to more significantly grow my account. I’ll even do a high risk thing now and again because my gains can absorb it (assuming I have them).
I can’t wait to get to 250K, then 500K. I know it’ll take quite a long time, but I am confident I’ll eventually be able to have 500K and (hopefully) 1M in my non-401k trading account with gains and additions from my job. I can only imagine how “dangerous” I will be with that kind of capital.
If you missed "the next big thing" like AAPL, TSLA, or the time machine I’m building in my basement. Don't get upset, learn from it. Adapt and become a better trader for next time.
Figure out why a company was so promising, before they mooned. Determine how you would have traded differently in hindsight. Apply those lessons to the next company you believe has long term growth prospects.
For me that's putting in 1-2.5k towards shares and/or buying LEAPS on it. Depending on my bullishness I may buy “cheap”, fairly far OTM calls. The far OTM options are sort of lottery tickets. If I'm right the (relatively) low cost will have explosive profits; if I'm wrong, they didn't cost that much so it's a calculated loss I’m willing to accept. For more serious bets I’ll buy ITM LEAPS to run PMCCs on. I also like to buy 1-2K in my 401k for very long-term plays.
The stock market hates uncertainty, it seems to crave the status quo. A shakeup can potential tank a stock, even if it's nothing. With shares you can wait it out, but this can be problematic for options. If you see volatile/uncertain times ahead (politics, disease, manufacturing, earnings, etc.), you might want to reduce your overall portfolio risks or hedge.
Profit Retention / Loss Mitigation
If selling options, it is a viable strategy to close early after a large gain with many DTE left until expiry. See TT videos / strategies on this.
Don't hold options through earnings unless you literally want to gamble. I like playing on earnings run ups, but that can be risky.
If you hold options through earnings, IV crush will happen immediately afterwards, devaluing the option. However, if the option is profitable enough, IV crush won’t matter, which will still make money for a call buyer. A sold put sufficiently far OTM will benefit from IV crush, even if the stock dips after slightly bad or lukewarm earnings.
Don't throw good money after bad. Don't gamble on a recovery if your assumption appears to be wrong or the market is flat out tanking. If you are wrong and still believe in the company, wait twice as long as your original plan (wait for your 2nd entry point vs 1st) before adding to your position.
Consider using stop losses to lock-in profits on rides up or sometimes use them to prevent losses. Note, stops can be easily triggered in volatile options. Now when I'm up a lot on calls (especially around earnings or large momentum run-ups) I always set stop losses. I have been burned too many times. In December 2020 I didn't set a SL on several thousand dollars of FDX calls I was already up on and I "lost" ~$5K of unrealized gains. If you're up big, don't get too greedy.
A possible strategy if a stock is on a tear and you have multiple options open: Close some positions (I prefer to do this incrementally if the stock has momentum), but leave 1+ open in case the stock goes into outer space/the floor. Next, set a stop loss with a little buffer below its current movement / range so it doesn't get hit unless the stock falls hard. Finally, watch the stock closely and if it keeps rising, keep moving the stop loss up in little bits incrementally. This will let you keep more profits on a hot streak, but give some protection and secure more gains. It will also help eliminate FOMO if a stock exceeds your expectations.
Have rules when to roll out, down & out, or up & out. I like TT’s roll at break even or at 1x loss and to always roll for a credit (or for me a very minor cost). Obviously these rules need some monitoring. Know your stocks, the news, and technicals so you don’t jump the gun.
If you roll early for a credit and you’re right, it’s not the end of the world. You’ll just need to hold longer, which will obviously tie up capital. Sometimes it’s better to tie up some money (especially if you aren’t paying interest) than eating a huge loss.
Rolling too late can be worse though. I currently have a very underwater FDX put I sold that is over 2x loss, rolling it does almost nothing unless you want to pay a debit or extend it extremely far out.
On huge options gains, I strongly you recommend taking profits by rolling up/down or incrementally sell your contracts at several different prices (this is why having multiple contracts is nice).
Rolling up involves selling your initial call, then using a fraction of your proceeds to buy a cheaper, further OTM call with the same expiry; puts are inverse this. When rolling up I like to ensure the new option’s cost is 15-40% of my realized gains. I’ll buy a more or less expensive new optoin based on my convication to the stock and predicted movements. You can also roll up and out to get a further expiry and strike.
This is monumentally important if you are playing with incredibly high rising stocks or during a short squeeze.
Sad story time: I completely screwed up when I forgot to roll up, twice, during the GME gamma/short squeeze. I didn’t take my own advice; I didn’t have a real exit or transition plan and I got emotional. It all happened so fast and I was at work; the insanity of the run up and subsequent gamma squeeze caught me off guard. I should’ve clocked out and thought through the situation for 15-30 minutes to form an impromptu plan, then executed trade(s). My moderate risk tolerance coupled with my desire to take profits took over. When the stock partially cratered after a run up, I sold to retain gains. In the heat of the moment I thought the squeeze was squoze and it was going to plummet into the ground and I wasn’t being rational.
On 1x 4K call I would’ve made an additional 15-25K if I rolled up to a cheaper contract with some of my profits.
I know I missed out on significantly more with a 2nd call I had. Depending when I rolled it, it would likely have been an additional 25-50k in profits.
I talked about learning from your mistakes above. This mistake is branded into my brain due to the massive gains I missed out onby not rolling up. I’m furious with myself as I write this 1 week after the GME gamma squeeze, I’m a planner and I didn’t plan. If anything I own is significantly up ever again, I’m rolling up (or at least setting a stop loss). If necessary, I’ll roll up a trade multiple times to keep extracting profits.
Learn from my mistake so you don’t miss out on gains too. I strongly recommend rolling up when you are up big on a call / roll down when you are up big on a put. This enables you to take profits, stay in the game, and keep extracting more gains.
If you trade a lot of options, talk to your broker about a discount. I was getting the standard $.50/contract with E-Trade, but I traded over 300 contracts a quarter and was able to get the fee reduced by over $.10 by just asking. I am now doing more spreads and condors, so once my volume gets very high, I’ll ask again.
If you have a broker that isn’t great and you want to switch, leverage your current trading fees to the new broker. Tell them you’ll move over $### thousand if they beat your current options trading fee per contract.
Trade Planning & Position Management Tips
As you gain experience, start monitoring what kind of Delta, OTM, DTE, etc. you are most profitable with. Use it in your future trades. You'll often see the tasty trade 30-45DTE .3 Delta strategy for selling.
Before entering a trade, look at rough technicals like resistances and supports to consider your relevant strikes as well as entry/exit points. Look at upcoming earnings & dividend dates as well as stock/market news.
Consider staggering strikes and expirations for safety and diversity; it’s nice to avoid assignment on 3 puts at once because you used the same strike for all 3.
Incrementally enter positions on large rises/falls. One of my favor strategies is to buy dips after over reactions. By doing this slowly in large price "steps" it helps combat FOMO and helps you avoid getting slaughtered.
This will also help you avoid "chasing a falling knife". It also ties into having a plan.
I set alerts at several predetermined prices and I REALLY try not to enter new trades unless I hit my preset points. It makes me less emotional and usually more effective.
Don't buy far expiration options with poor liquidity for shorter term plays. I bought 1x GME 1-year+ LEAPS call before the 2021 short squeeze. That was stupid, I should've bought 2-3x 60-120 day calls to have better liquidity. I also paper-handed it and missed out on my lambo.
If selling options, consider rolling (for a credit) to avoid assignment when it makes sense / meets your plan. Rolling closer to expiration can be a valid strategy to get theta on your side. On the flip side, if the stock moons or plummets it could've been better to roll before it got crazy deep ITM. See rolling “rules” above.
Covered Calls:
If a stock has a large movement range, I think it can be worthwhile to wait to open a CC after the last one is closed/expires. I have been more successful waiting for another opportunity vs. opening one immediately on the Monday after the second the last one expires.
Consider selling covered calls at all time highs/peaks. If you sell a CC and the stock dips significantly, and you think it’s temporary, you can buy to close your CC for a quick profit, then reopen it later.
If you own Meme stocks, selling covered calls runs the risk of missing out on large gains. On these stocks I typically only sell them further OTM than I normally would or not at all. If I do sell CC on a Meme stock I try to ensure I have 25-100 other shares that won’t be called away.
-Advanced Beginner- Spreads
Spreads (with 2 legs) are neat because they manipulate how delta and theta act. It caps your gains and losses, but you can profit with less stock movement. Try several spreads on a P/L calculator to see for yourself.
Spreads usually require margin trading.
Spreads allow you to define max losses (assuming you close before expiration day) and use less capital.
Experienced traders will open many spreads at identical/similar strikes to heavily profit off movement. Spreads can make you/lose you a lot of money if you are right.
For example. I could make a $200 premium off a $500 risk trade, max loss would be $300. This is much more effective capital utilization than a naked or cash secured put, however it does not have the same downside protection or “wheel” potential as a sold put. Higher risk, higher reward.
Vertical Debit spreads: I think of these like mini calls/puts. I personally don’t use them unless calls are outrageously expensive or the break even is absurdly high, but there’s nothing wrong with them. A call debit spread will lower your breakeven and overall cost vs just a call. You can do clever things like making a positive theta call spread if you’re creative. I like doing this since I hate losing money to theta.
Vertical Credit spreads:
Very good theta strategy to define downside/upside risks.
A put credit spread is bullish and allows you to bet on upward movement with less capital and defined losses.
A call credit spread is a bearish strategy that allows you to bet on downward movement. These are very cool since they allow you to sell calls without selling naked calls, which can ruin you financially. I see selling these as better than buying puts since it’s so much easier to be profitable; to be redundant, Θ rocks.
I repeat this on purpose: Don't EVER leave short spreads open on expiration day, close them. If you don't close, they better be VERY far from the strike on a non-volatile stock. In after hours a stock can jump/dip below your strike and be exercised without the other leg to protect you. This can lead to massive, life ruining losses. This is not an exaggeration, google this and be scared. It happened to a fair number of people with TSLA. Video explanation: https://www.youtube.com/watch?v=rtVFj9nRRDo&t=315s
Short Straddle:
Trading Mechanics, Taxes, Market Manipulation
Learn about wash sale rules. They suck and are very easy to activate with options. This will eliminate your ability to write off losses. Over trading can easily cause wash sales. https://www.investopedia.com/terms/w/washsalerule.asp
Short attacks:
Learn to recognize these sketchy attacks by hedges/firms. They manipulate the market, it’s been documented countless times. A common one is rapid short selling, which pushes the price down.
Some people say short ladder attacks don't exist. I've seen some very strange stock nosedives off low volume, so I tend to think they do.
If you plan well enough and the market doesn’t give up on the stock you may be able to use it as a great opportunity to buy the dip.
Cramer explains how he intentionally manipulated the market when he ran a hedge fund years ago. Multiple links to the video are below since this video gets pulled often, Cramer / The street never wanted this to go public.
Due to this video I don’t fully trust Cramer. His show can give you stock ideas to buy (or inverse), but you never know where his true loyalties lie.
Plan for taxes if you are up big. You may need to over withhold or contribute to taxes quarterly depending on your situation. https://www.irs.gov/taxtopics/tc306
-Intermediate / Advanced Strategies (work in progress)- You’ll notice many of these strategies inverse one another. Options Strategy Finder This website is great for learning about new strategies, you’ll see many links to it below. https://www.theoptionsguide.com/option-trading-strategies.aspx Short Strangle / Straddle
Both of these strategies profit from little price movement. I recommend using a P/L calculator to determine BE, profit, etc.
A straddle sells (or buys) two options at the same expiry and strike.
A strangle sells (or buys) two options at same expiry with different strikes.
Both these strategies involved selling a Call and a Put for a credit. Straddle uses ATM legs, strangle uses OTM legs.
Limited max profits and unlimited risk. Due to the unlimited risk, I am not a fan. However, many people like these a lot.
These strategies profit from neutral or mostly neutral stock movement. They receive a credit to open and benefit from theta decay. If your stock is range bound, these may be a good choice.
These are both 4 "legged" trades, so you will have 4 trading fees to enter or exit the trade. A lower cost or zero cost broker shines here. However, “bad” free brokers will give you poor fills, which may not be worth the discount.
Condors and butterflies have "wings" which are your purchased puts and calls. The wider the wing the higher the max profit/risk. The condor body can be riskier and skinny with a narrow high profit range or wider for a much greater chance of success with lower payout.
An iron condor is built by combining a put credit spread and a call credit spread with the same expiry.
An iron condor can be thought of as a modified short strangle with limited risk, and therefore a bit less profit. I prefer defined limited risk.
The butterfly is similar except instead of a plateau it has a sharp peak. My personal mental note is that a condor looks more like a strangle with wings, while a butterfly looks like a straddle with wings.
Pay attention to earnings dates when you open these, I have forgotten to check before and it led to bad trades.
The debit version of an Iron Condor. You expect the price to stay inside your defined range. This strategy profits from neutral or mostly neutral stock movement. I’ve never tried this, Iron Condors make more sense to me.
Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Credit to open.
Limited risk / limited reward.
Can be harder to set up. I want to try these, haven’t yet.
Inverse of an Iron Condor. You expect the price to go OUTSIDE your defined range. These are useful when you expect significant price movement. Debit to open.
LEAP Options are options that are long term with many DTE, often over a year until expiration. LEAP calls are great for long term growth plays (downtrends with LEAP puts) or simply when you really like a company and can't afford 100 shares. LEAPs (or any "longer term" option) enables you to sell a PMCC or PMCP (below)
PMCC / PMCP
PMCC or PMCP are poor man's covered call (or poor man's covered puts). They are diagonal options often used with purchased LEAPs. You sell a shorter DTE call/put with a further OTM strike than your purchased call/put. For PMCC/PMCPs it is often recommended to recoup your extrinsic value as soon as possible, some recommend with your first call CC or put sale, to ensure you are positive if the option is assigned early. These have a lot of moving parts and strategies. If you buy a barely ITM call/put and sell a nearby strike call/put you run the risk of the purchased option getting "blown by" on large stock movement and ending up with a very negative losing trade. Keeping your purchased LEAP deeper ITM should protect you. Check your initial PMCC using an options calculation to make sure you don't screw up.
I'm currently tinkering with these myself. So far I like .7-.9 delta call LEAPS with 30-45 DTE calls on my CC. The goal is to hold the LEAP long term, potentially until expiration, and constantly sell calls/puts on it that expire worthless. Typically the call/put is rolled up and out or down and out if it's going to be assigned, unless you don't want your LEAP anymore.
Some people look at these many sold CC or puts as profits, I look at them as lowering my cost basis until it's zero (or even negative). I have a page in my notebook I write each CC on my NIO LEAP (I Meme stock sometimes). I find it satisfying to slowly see the cost of the original option disappear. When I originally wrote this I had ~2 years left on it and it's 9-10% paid for; that doesn't even count the actual gains the LEAP has.
TT states this is considered an IV play, which I partially agree with. You want to buy these during low IV times since an IV drop will hurt your LEAP value. I look at them more as a way to sell calls/puts on a high IV company with a lot of price movement and potential upside/downside.
Good brokers will allow you to set these up, some will require a desktop to do it. This lets you link one action to another. In programming think of it like an if-then. You’ll tie a buy/sell to another buy/sell
Setting trailing stops on options is very chaotic since their price movement can be drastic due to volatility. I prefer to set my trailing stop to a stock.
What I like to do is set a trailing stop on a stock (or just link it to a stock price drop) and have it sell 1 share I own. Then it immediately executes a market order to sell my call. I’ve had good luck doing this with incredibly volatile plays were stop losses aren’t effective. I’ll often have an order saved and ready saved for when a strong run up starts. When my price alerts start blowing up my phone, I’ll immediately hit execute to turn it on.
Disclaimer: I’m not a financial adviser, I'm actually an engineer. I’m not telling you to invest in a specific stock/option or even use a specific strategy. I’ve outlined and more extensively elaborated on what I personally like. You should test several strategies and find what works best for you. I'm just a guy who trades (mainly options) part-time for financial gain and fun. I don't claim to be some investing savant.
Betting Calculator. Before making any bet, it helps to know what you're risking for the expected payout. Enter Your 'Bet Amount' - that's what you're risking, along with the American, fractional or decimal odds. See what your total payout and winnings will be. Betting Calculator Parlay Calculator Bet Slip. Expected Winnings $ 0.00; Expected Payout $ 0.00; Create Wager. Bet Amount. American Expected Value is a tool that will help you decide whether to make a bet or not based on making that bet over the long run. It does not tell you whether the bet will win. Now over to you. Do you often use EV when making your bets? Comment below or let us know on Twitter. Prev Previous 12 Sports Betting Experts Debate The Importance Of Closing Line Value. Next How To Use Poisson Distribution The formula for calculating Expected Value is relatively easy – simply multiply your probability of winning with the amount you could win per bet, and subtract the probability of losing multiplied by the amount lost per bet: (Probability of Winning) x (Amount Won per Bet) – (Probability of Losing) x (Amount Lost per Bet) The expected value in the long term would therefore be £0 (no value, but at least it’s not negative value). Now, a bookmaker will naturally build their commission into the odds they offer you. If a bookmaker was offering odds on a coin toss, they might offer you odds of 1.90 instead of the actual fair long-term odds (2.00). Expected Value (EV) is the most simple of all betting equations: Expected Value is the predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence. Simply, Expected Value is the average result you should expect to receive from the given bet or equation Calculation of Expected Value The expected value of a particular gambling scenario is worked out as follows: [ (probability of winning) x (amount won per bet) + (probability of losing) x (amount lost per bet)] Expected Value Calculator. Expected Value, or EV, is at the core of everything we do in matched betting. It is how we know that we have an edge over the bookies and will make money in the long-term. What is Expected Value? In mathematical terms, the expected value of a bet is the sum of each potential outcome multiplied by it’s probability. Here is an example that might make it easier for Value Calculator: Work Out Bet Expectation. One of the key concepts you need to understand as a punter is the relative value of a bet. You can now judge the value of any bet, by using this Value Calculator, which takes a single bet and its probability of success and then calculates the likelihood of that bet turning you a profit (or loss) if repeated over 100 times. The greater the profit This article explains how to calculate and measure expected value, and shows how it can be used to find value bets. Expected value is a predicted value of a variable, calculated as the sum of all possible values each multiplied by the probability of its occurrence. In betting, the expected value (EV) is the measure of what a bettor can expect to win or lose per bet placed on the same odds time and time again. Positive expected value (+EV) implies profit over time, while a negative value (-EV And instead aim for a positive Expected value before betting. We are not here to gamble even tho this a gambling strategy guide, we are here to calculate the expected value. Our aim is therefor not to beat the casino, it’s to find out where we have a positive edge on our expected value. We will call it EV, short for Expected Value.
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