How to make a corporate action pay for you

BY ANDREW GIOVINAZZI

January 31, 2024

Yo Pit Crazies,

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Companies split stock prices and they usually jump in price. Apple Inc (Ticker: AAPL) split 5 for 1 a while ago or was it 6 for 1. Anyway these announcements are usually bullish for no particular reason.

Another event that is not exactly a corporate action but feels like one is when stocks move into a major index. That happened with Tesla Inc (Ticker: TSLA) over a year ago. I think the stock jumped 20% or more. Elon Musk announced a new chip he stuck in someone’s head with Neuralink. That might help TSLA in the short term.

The S&P 500 is a bit short of AI. It has all the big AI but I think it needs some small AI company.

Let’s go find one.

You get the darndest ideas on TWTR

Yeah I know it is called X now. But I saw an insane Palantir Technologies Inc (Ticker: PLTR) post on how a Twitter PLTR bull thinks PLTR is going into the SP 500. I thought that was an interesting idea. Now to make it a trade I need to find an edge. So I think I did.

90 Day Implied Volatility is very low. Too low given the range of PLTR on earnings. So that is my trade.

I added some longer term options to the Easy Trade Button on the lower priced volatility. The earnings cycle is a bonus. Now I need Frank to do some digging for Cap Gains.

Not for nothing the FOMC will opine on rates. The market wants a dovish tone but I am not sure the market will get it. Any whiff sends us to 5000 SPX. The Big Tech earnings look like a meh and after the massive runup meh is pretty good.

To Your Trading Success,