RobinHood is going off the rails

BY ANDREW GIOVINAZZI

December 07, 2023

Yo Pit Crazies,

If you missed my wealth creation webinar on my Weekly Profits Cycles program, you can check that out here. Do yourself a favor this season and get out of your comfort zone and learn to trade the market.

Robinhood Market Inc (Ticker: HOOD) was the posterboy for all that was good and bad in the 2021 stimmy dollar meme boom. The good thing was it introduced no cost trading to the masses and IPO’d for huge dollars which is a cash hoard HOOD is still living on. The bad was the phenomenal growth led to corporate governance and compliance issues that still plague HOOD today.

And corporate officers pay themselves too much stock, a la Snap Inc (Ticker: SNAP). One would think that is an incentive to make HOOD work since that will be the payday.

1 year chart with with IV and realized vol on the bottom chart

Lately HOOD has been on a tear after the profligate stock grants crushed the stock after earnings.

There is another reason HOOD is interesting.

Find out what it is.

HOOD is a perennial takeover target

When I see HOOD I see a franchise. The millennial franchise is up and moving and they found a way to tap into it. Similar to Amazon.com Inc (Ticker: AMZN), they found a way to make money and HOOD is at break even or better if they did not grant too much stock. Right now the call buyers are jumping in big time.

That is the spike in IV on the red line in the chart below.

1 year IV charts for HOOD on the bottom, white is realized vol, red is implied vol

I was an $8 and $9 put seller this year in HOOD, and wrote about it a couple of times. I switched to Jun calls about 2 months ago and now they are finally in the black. Let’s see if they really get in the black.

If you want a service that is in the black, check out Weekly Profit Cycles where I have recorded 26 of 30 wins, all trades I put on myself with my students. Week in and week out.

To Your Trading Success,