Market

RVLV Bearish inclined Naked Calls 12 Nov Expiry (Nov Track 2) for NYSE:RVLV by Ronin_trader

VolOp Launch
This is the first trade where I adjust my position sizing to account for the rising volatility in a ranging market that seem to have deeper drops whenever there are issues.

I call this stance in my plan “VolOp” and while it results in a 1% drop in my monthly target. It should weather my contracts better. This current adjustment is mainly based on YTD trades and increases my margin amount to 114k

Whats The Plan/Trade/Thought – RVLV

  • Bearish inclined position for RVLV
  • Overall Market is Ranging with negative news or concerns moving the market deeper vs positive news.
  • The discretionary retail sector seems tied to major macro issues like supply chain and the increasing cost of importing goods
  • RVLV is in a ranging pattern now. I have selected it as it is part of XRT holdings. I would prefer to enter XRT as it covers more companies. However it’s options prices are terrible
  • RVLV is the right price and previously on 5 Aug, while it had shown a solid earnings report. The company’s conservative positioning caused a huge -24% drop. This shows in my opinion a lack of commitment and belief in the company’s success and performance

    I Feel

  • I was very happy when I spotted this trade. I think this is a good strategy to take. Looking at companies that are aligned to the overall movement of the ETF . Especially when the ETF has terrible prices

    Imagine Yourself Taking The Other Side

  • RVLV has over exceeded earnings expectations for the part 3 quarters. This aligned with market optimism could fuel a bullish rush
  • While it is ranging. The price movement has generally been higher lows
  • 12 Oct News – Net sales increased 60% year-over-year to $228 million (and 41% over Q2 2019), while diluted net profit more than doubled compared to the year-ago period to $0.42 per share.
  • 12 Oct News – Domestic net sales were up 59% and international net sales increased 63%. Gross margin increased 517 basis points to 55.6%, benefitting from healthy inventory levels and consumer demand dynamics. Also helping were higher sales at full-price and a decrease in “the depth of markdowns.”
  • Strangely despite the positive news RVLV hardly moved

    Imagine Yourself As A Neutral Observer

  • The current price movement is ranging. with current highs not exceeding previous highs
  • Any position needs to be outside of the range

    Look For New Information

  • I found very strong bullish news on the company and it’s business
  • 12 Oct News – Net sales increased 60% year-over-year to $228 million (and 41% over Q2 2019), while diluted net profit more than doubled compared to the year-ago period to $0.42 per share. (I also pasted this on the Other Side)
  • 12 Oct News – Domestic net sales were up 59% and international net sales increased 63%. Gross margin increased 517 basis points to 55.6%, benefitting from healthy inventory levels and consumer demand dynamics. Also helping were higher sales at full-price and a decrease in “the depth of markdowns.”(I also pasted this on the Other Side)

    How Do I Feel Now

  • I’m ready and confident to press the trigger – Sell calls!

    Trade Specs

  • Sold 68 CALLS @ 0.8 Strike 90
  • % to Strike 29.48%
  • ATR % IS AROUND 47%
  • BP used 47K
  • Max Gain: est $5440
Most Related Links :
Business News Governmental News Finance News

Source link

Back to top button