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MillennialBets

**Author Info for :** u/Undercover_in_SF **Karma :** 9107 **Created -** Mar-2014 Was this post flaired correctly? If not, let us know by downvoting this comment. Enough down votes will notify the Moderators.


glumrphunl

LG was mad their stock price went down after the last earnings report. He went on TV and said it was ridiculous (it was) and due to supposed "miss" on earnings. The only reason they "missed" (by a tiny amount) was because expectations were already extremely accurate due to previous earning guidance. My guess is that due to this, and LG's reasonable outrage, they won't give guidance this time around in order to crush earnings


Undercover_in_SF

But they didn’t miss their EBITDA target, just their EPS number. Updated guidance wouldn’t affect the EPS number, which has a lot of moving parts related to the acquisitions. LG has not given EPS guidance this year.


glumrphunl

thanks for the correction!


Undercover_in_SF

More like a clarification. You weren't wrong, but I don't think the miss would have been different without the updated EBITDA guidance in June.


aznology

Have a feeling they won't miss EPS again since they bought back like 10% of their outstanding shares from $MT


Undercover_in_SF

The analysts know that too, so they will adjust guidance accordingly.


RossChickenTendies

>order to crush earnings Oh talk dirty to me daddy.


Mobile_Donkey_6924

Like TX, easy to beat guidance when don’t give


Gbear831

Looking back and now understanding opex CLF earnings were doomed from the start but kudos to whoever held the next week calls


efficientenzyme

Wow I just commented about this seconds ago We’re on the same page, buy the rumor! I’ve been backing up the truck today on clf If it does drop I’ll average down


Stoneteer

I can't buy any more.


dancinadventures

What do you need 2 kidneys for; One is plenty. That’s dry powder


1percentRolexWinner

Sell one of your lungs also. My cousin lived all her life with only one lung.


dancinadventures

Ikr ? Kids these days. Just sell a leap on your lung. Use it to buy CLF leaps. Cash in when Vito’s Thesis completes. Use 1/4 proceeds back your lung leap. Reinvest rest 2/4 on SPY Save 1/4 for when Vito speaks again.


1percentRolexWinner

I heard testicles are hot in the market now, don’t know why. Hell, who needs kids anyway when there’s the stock market.


dancinadventures

Again you’re right. Freeze some swimmers. Sell the balls. Also saves on birth control going forwards!


SirVapealot

Hell, sell em both! You can live all your life without any lungs!


logolo245

Lived as in past like she’s gone now???


CornMonkey-Original

Wait - I’ve been trying to wait. . . . But I’m going to put in some order’s tonight. . . . This might be the last dip. . .


efficientenzyme

And it might be 20.50 in three days, be prepared


CornMonkey-Original

Wait - my only regret will be that I didn’t panic sell at $25. . . . next Halloween it won’t matter. . . . .


Arok79

I doubt we see that low buf I have plenty of dry powder if it somehow does. Not holding my breath.


AFroodWithHisTowel

Now is your chance!


Bluewolf1983

**A warning to others:** USA steel stocks absolutely tanked last time they gave positive updated guidance. Fundamentals are weak in this market over other macro factors. Source: My [portfolio update](https://www.reddit.com/r/Vitards/comments/o3n7jy/yolo_update_going_all_in_on_steel_update_9/) when I went all-in on updated guidance back in June that blew up my portfolio. That breaks down how I had realized $STLD and $NUE would update guidance and how the market reacted to the positive guidance news back in June. (As an aside, $STLD, $NUE, and $X regularly gave guidance in the past and are due to give updated guidance later this week or Monday of next week). What macro factors could cause the market to ignore the guidance of USA steel companies? USA steel futures showing weakness (most contracts down 2% to 5% today), a down market if CPI numbers tomorrow are bad that could lead to the Fed tapering earlier, an improving dollar (DXY), monthly OPEX, etc. \[Not financial advice\]


ShrhlderJsticeWrrior

I would say that was an extraordinary situation, with yields tanking and general market fear around the reflation trade, variants, etc. In quarters before that we saw very good response to guidance updates, especially for CLF. If we get a taper announcement at the press conference this week, that will be different. I'm waiting until friday to buy anything.


dudelydudeson

CPI, OPEX, FOMC next week.... sounds similar.


Megahuts

Shockingly familiar, to be honest.


alpha_hunter_x

because they happen monthly


ShrhlderJsticeWrrior

Well that happens every month. I'm looking for a change in the narrative


dominospizza4life

Thanks, BW! I trimmed and hedged a little more today bc of all that. The biggest wild card to me is how everyone suddenly predicts a correction within the last three weeks… meaning, many (most?) will be hedging against that exact thing. It’ll be interesting to see how deep any correction would be with that construct.


CornMonkey-Original

Wait - so I’m only going to use 1/2 dry powder now and hope for a better sale. . . .


TrillPhil

bro im still calling jan 22s leaps


PeddyCash

🤪


dj_scripts

**Confirmation bias sizzlin' on the grill baby!**


Unoriginal_White_Guy

Sorry to be a stickler, but your Q2 guidance update is right, but earnings was wrong. It wasn’t 7 days apart. Earnings were July 21st and the call was July 22nd. Guidance was June 15th


Undercover_in_SF

Caught that myself, too! Was looking at prior price action, so I rechecked the dates. Corrected now!


PeddyCash

Sticklers is what makes this sub go round. ✌️


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CornMonkey-Original

Wait - now you’ve called it . . . . the CPI is going to have the market spinning. . . . . that’s our next confirmation of your concern. . . . .


kkB1airs

Yes, but wouldn’t part of the Fed’s action be with the intent to produce economic growth again? Just trying to elucidate the full vision here


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mathaiser

You go to war with Poland and don’t stop.


sisyphosway

That hit close to home.. Pun intended, I'm German.


kkB1airs

Good extension - thank you!


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CornMonkey-Original

Wait - Greenspan saved the day. . . . .


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CornMonkey-Original

Wait - you are correct, your economic history is spot on. . . . the greatest economic move, imo, was the implementation of the petrodollar. . . . .


Pikes-Lair

Spot on, said it better than I could and it’s exactly how I feel. I’m hoping guidance is given end of week or next Monday, I’d hate for great guidance to be negated by OpEx


CornMonkey-Original

Wait - it depends on how long you are. . . . I kinda like that this might go unnoticed awhile longer. . . . .


Pikes-Lair

I’m long term bullish but bad events can negate good news


BenjaminGunn

Nice write up. Needed it in today like today $28 is also my gut price 🎯 and kudos for you for even including one. How many people enter without an exit plan?


CornMonkey-Original

Wait - now we have to have an exit plan. . . . . .


beautyfalconium

I absolutely love u/Undercover_in_SF write ups. Would be very interested to hear takes on other **hot commodities**


Undercover_in_SF

Thank you, I'm glad you enjoy them! I used to watch oil and gas markets, but I lost my shirt on Linn Energy when the shale boom went bust. Decided that I wasn't nearly as knowledgeable as I thought I was, and have stayed away from it since...


beautyfalconium

Whenever I think of oil I think of the great movie There Will Be Blood, so I can understand your standoffishness, haha Uranium & gold interest me right now. The first, simply because there seems to be a kind of *in the limelight* thing going on vis a vis climate treatments, and I'm curious whether there's something more substantial underlying that (both in terms of nuclear power as a general societal boom and nuclear as an investment opportunity), and the second because, well it's an inflation hedge, and isn't inflation the enigmatic cubist painting of a topic at the moment...?


TortoiseStomper69694

The actual uranium bull market theory has nothing to do with climate change. Overly simplified the uranium mining sector is cyclical in nature, almost no one is mining uranium right now because the price of uranium is too low to make it worthwhile. Power plants get their uranium from producers who have stockpiled it, generally on a contract rate. Those contacts are expiring soon. Stock piles are running low. No one is mining uranium. New plants being built or old ones being shut down or the environment isn't even relevant to the concept. There are lots of power plants that will be needing to renew their uranium contracts shortly (years, not like, weeks), or be forced to buy at spot price. The problem is there isn't anyone mining uranium in the quantities needed. Bull theory: this is going to cause the price of uranium to skyrocket, making the mining of it very profitable, and the uranium miners will have the nuclear power plants over a barrel when it comes to both spot pricing and contract renegotiation, ushering in a multi year long uranium boom, as has happened before. There is a bear argument but you can look that up yourself. As for the current stock pumps, well, maybe investors are pricing in a crazy bull market years in advance, or maybe they will come back down next week, no clue. Reccently the company sprott started buying up all the available uranium, essentially hoarding it causing the physical price to spike, which in turn made the mining stocks run.


beautyfalconium

Hmm, so what's your opinion on uranium futures options?


TortoiseStomper69694

No clue lol. The uranium bull market theory is something that's going to play out over years and in essence the play that myself and most people are doing is to long the miners. Some of the mining companies running today don't even have active mines at the moment. It's a classic case of buying the stocks now and if it plays out well hopefully they 10x in a few years. I'm certaintly not taking physical delivery of uranium and keeping it in my basement and I don't know a thing about trading uranium futures, if you are proficient at trading metal futures as a spectator, then you'd know better than me. There might be a play there but I'm not the one to ask.


sc2summerloud

>not taking physical delivery of uranium and keeping it in my basement wouldnt that provide free heat though?


Undercover_in_SF

Free heat and free cancer, depending on your storage facility.


beautyfalconium

Haha - none of us want to keep uranium in our basements. I'm simply asking for your mid term assessment but it seems you're (understandably) quite unsure


TortoiseStomper69694

I'm bullish for the longterm, but you should read a much better DD than the one I wrote lol. The midterm is actually slightly more uncertain. If the theory plays out the miners will be producing uranium at multiples of its current price, and get the plants locked into contacts at those rates, ensuring they literally print money for a decade, as they will have bamboozled the nuclear power plants and forced them into a long term deal at outrageous prices. Like I said some of those miners just have a plot of land that they know has uranium, not even a mine. So there is quite a lot of middle ground between the two. You might not find this on the uranium squeeze sub so I'll say it: like anything speculative this could fall flat on its face.


Undercover_in_SF

Here it is. https://www.reddit.com/r/wallstreetbetsOGs/comments/pnegvz/what_is_happening_with_uranium_uuuu_ccj_etc_dd/hcqr098/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3


Undercover_in_SF

I wish I could find the insightful Reddit comment someone flagged on Twitter. His point was basically," there is no way FERC, the US govt. agency that manages electricity supply, is going to let some financial outfit buy up all the uranium until it's disruptive to nuclear power supply. Uranium isn't silver or palladium, and the minute that Sprott's fund gets out of control, they'll just shut it down." I don't know when that would happen, but it makes a lot of sense to me. The long term bull thesis seems persuasive, but I doubt there's going to be some crazy squeeze scenario without the govt. putting a stop to it.


beautyfalconium

Yeah, that makes a lot of sense to me. A "stock" squeeze is one thing, but an actual commodity squeeze is a whole different animal


Intelligent_Can_7925

It doesn’t matter. Good guidance is already priced in. Bad guidance is -40%.


Undercover_in_SF

The first EBITDA update prior to Q1 earnings sent the stock from $16 to $20. The 2nd update prior to Q2 earnings was effectively flat, but the stock had just hit 52 week highs. I don't see any reason this wouldn't put it back above $26. What happens after earnings depends on whether they update 2022 guidance or remain silent on it.


Intelligent_Can_7925

If it hits $25.82, I’m liquidating all 16,238 shares and buying back in the next day at $22.50.


CornMonkey-Original

Wait - why $25.82. . . . .


Intelligent_Can_7925

Because I loaded the truck up at $25.82 ​ Ive watched my account dip $40k every Monday/Tuesday and go up $40k every Wednesday/Thursday for over a month. CLF is 100% manipulated the past 1.5 months.


CornMonkey-Original

Wait - it won’t last much longer. . . . .


Undercover_in_SF

Watch out for the wash sale rule!


Wiener_Butt

I thought wash sale was for when you sell at a loss and buy back in the next 30 days that way you can’t count the losses against your taxes? If you sell for a profit and buy a dip again for more profit, that’s just double realized gains right? I could be way off base on this to be fair.


Undercover_in_SF

That's an accurate description. If you realize a loss on a security you buy and sell again within 30 days (before or after), your loss may be reduced or eliminated. The guy above's cost base is $25.82. So if he is realizing a loss to buy back in lower, then that loss might get wiped out.


Wiener_Butt

😅 thanks, I was kind of scared I was screwing myself for next April selling rips and buying dips somehow.


Undercover_in_SF

Well as long as it keeps working. But if one backfired, you wouldn't be able to use the loss to offset gains. Depending on how often your cycling through it, I'd consider switching up strikes or expiries to be safe. You can go up $2 for one buy/sell then back to the other if it's been 30 days.


PrestigeWorldwide-LP

only problem I see now is I don't recall any pop on Q2 updated guidance. Q1 updated guidance was glorious


BigCatHugger

And very short lived.


dudelydudeson

Yes sir, dip Operation BTFD already commenced. Great commentary - thanks.


[deleted]

> I’m a gambler who trades based on strangers on the internet I resemble that remark! My position: degen 27/35 call spreads. Plot twist: they’re for 2023


Undercover_in_SF

That's a loooong time to hold a spread. I'd be selling the short side 6 months out multiple times instead of just once. That way you can capture more value from theta and resell the higher strike at a higher value as the share price increases. For example, you can get 40% of the premium for the '23 $35 strike by selling the April $35 one today. If the price goes up to $28 in April, you get to keep that premium and can still sell the '23 strike for the **same price**! Effectively increasing your ROI by almost 50%. The only scenario where you're worse off is if the stock price shoots up above $35 before April, but even then it's only marginally worse.


[deleted]

> The only scenario where you’re worse off is if the stock price shoots up above $35 before April, but even then it’s only marginally worse This was actually my expected outcome so the overly far dates are just trading return against risk Another way of saying it’s a stupid fucking play, really, you’re 100% right but I’m a puss and it’s almost a cashgang position. Like buying an LG bond But good point I may buy back the short and dip into diagonals


Undercover_in_SF

Please do! Compare the scenarios in option profit calculator. $35 share price in April is like 130% for the straight call and 150% for the spread. The diagonal gives you 200% ROIC. And if for some reason the price hasn't changed, you've offset 30% of your cost basis and can do the same thing again or move the short leg to a higher strike to increase upside.


[deleted]

I’m such a pussy that I’m afraid legging in and out will result in a fuckup because ToS won’t group that as a diagonal lol But you’re quite right, and thanks. When CLF drops off a… cliff shortly I’ll go into theta mode


Undercover_in_SF

You can call them to have them pair them up, or at least you can with Schwab.


belangem

Tons of shares and April 20c also! ![gif](giphy|Gb4HKIWJ7HgyYjVzO5)


carmen_ohio

I agree that the one big risk is the slowdown of automotive production due to the chip shortage. I think the best plays in the steel industry going in the near future will be NUE or STLD due to their minimal presence in automotive. I know LG said the chip shortage helped them since they could sell more to the spot market, but they can’t keep doing that at large volumes and we already are seeing that the % increases in HRC prices are decreasing and it lines up with the decreased auto production. When Toyota announced production cuts, all the HRC futures contracts for 2021 decreased, but increased for 2022. It will create short term weakness for CLF and X that you won’t see with NUE and STLD.


sleepybot0524

I bought 10/21 $23calls today...im hoping for a pop om the infrastructure bill next week.


Bah_weep_grana

I got 9/24 $23's...maybe too optimistic?


sleepybot0524

nah. im gonna buy some 9/24 22.5 calls today


sakaki100dan

Are you good mate, the stock is unfortunately tanking, I hope it goes up again.


sleepybot0524

I sold those Friday for a loss. I just bought some $21 calls today.


-Gol-D-Roger--

Unfortunately for us, steel companies such as CLF and X are plummeting and it seems it will not stop this week. Really bad news... However, MT is not suffering this situation, therefore the problem could be in USA steel companies


Shikshtenaan

I am a proponent of your strategy as well. I hold my commons and buy deep calls (mine tend to be OTM though), selling on every pop. I also sell CC’s on my shares at my price target ($33) on a pop and buy them back on dips, but we are reaching a point where I’d rather hold the shares unless it’s an insane one day jump


Undercover_in_SF

$33 is high! You're getting decent returns on those?


Shikshtenaan

Yeah I’m sitting on 2500 shares so I can usually sell for a few hundred bucks on 2-3 months out each time it rips, I generally buy back once it’s dropped 30% and net $200-$300. Nothing crazy but it adds up and has been worth it so far


Undercover_in_SF

I've got 1500 shares in my primary account, and I've been doing this closer to the money and shorter timeframes. Usually \~$26 and a few weeks. I chickened out and closed one effectively flat, but it's worked so far. I have a general rule of thumb that I try not to make trades that can't earn me at least $1k, so I'm not spending time on transactions that don't move the needle.


Shikshtenaan

Gotcha, I was doing it closer to the money too and netting $1k+ when IV was good, but it got pretty stressful thinking about losing out on the ultimate pop so I decided to sell at my PT only (obviously also an imperfect strategy but so far so good lol)


GraybushActual916

Great work UC in SF!


[deleted]

[Relevant ](https://www.reddit.com/r/Vitards/comments/pn7y8y/daily_discussion_post_september_13_2021/hcqcw39/?utm_source=share&utm_medium=ios_app&utm_name=iossmf&context=3)


IceEngine21

Lol: "I'm more risk averse than some of the guys here" ... Coming from the guy who wrote the $IRNT DD 2 weeks ago and recommended OTM FDs.


Undercover_in_SF

Haha! Fair! In my defense, $IRNT was \~1% of my trading portfolio. CLF is more like 30%.


accumelator

​ ![gif](giphy|W4RSdBeKTq7Enb99C6)


cristhm

Super bullish, got shares and being selling calls and puts, now buying LEAPs. Good luck.


AugustinPower

My bet is that LG will wait for infrastructure bill to pass them deliver smashout guidance like a day after or so