XPEV Trade Idea

Hi Shoppers,

 

While browsing the stock charts, I found a very interesting trade idea in Chinese electric vehicle manufacturer XPeng (Ticker: XPEV) …

 

 

The stock has been trading down since April 1 — from $39.24 to a low on Monday of $29.77.

 

Quite a move … down 24% in twelve trading days.

 

I think the hammer and the doji of Monday and Tuesday could be signaling the end of this downtrend.

 

I will wait for the confirmation this morning of an opening price above $31.30 and I will buy the May21 31/37 call spread paying $1.80-$1.85.

 

 

I like buying the 31 calls with an implied volatility of 82.12 and selling the 37 calls with an implied volatility of 88.29.

 

This offers me a fairly inexpensive entry price for this spread with the long option being right at the money and gives me 32 days until it expires.

 

I will hold this spread on the downside to $1.20-$1.25 and take my losses.

 

On the upside, I will begin profit taking at higher levels due to the time frame I have at $3 and higher.

 

Previous Trade Ideas

 

        • My SPY put purchase worked out well. I bought the Apr21 415 puts Monday morning for $1.08 and sold them at the $2.20 level, $2.55 level and then down at the $1.75 level for a 95% gain.

 

Due to the quick profits and the expiration date of Wednesday, I sold all of them.

 

Had I hung on to a few of these puts, I would have a much larger gain; they traded a high of $4.60 on Tuesday! Can’t complain, though.

        • I also recommended buying the Apr23 36 either calls or puts in Vaneck Vectors Gold (Ticker: GDX) depending on where the stock opened on Monday morning.

The stock opened lower so I paid $.55 for the Apr23 36 puts. They looked good through the end of Monday but come Tuesday the stock was not cooperating; it was trading higher. I took my $.20 loss on these which was 36%.

 

Remember the name of the game is to stick to your trading plan.

 

Looking forward to seeing everyone at our Mentorship Day on Thursday!

 

Thanks for Reading … See You Next Tuesday!

Licia Leslie

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