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Webinar Replay: Market Chat with Keith Harwood and Nick Medina
by OH Editor | Mar 9, 2023 | Webinar Replays
Listen in as Option Hotline President and Chief Options Strategist, Keith Harwood, talks with futures trader and Principal at Mayfair Capital Investments, Nick Medina, about today’s markets and what they see going on with futures and options. Keith and Nick chat about the differences and similarities between options and futures trading and how each of their approaches to the markets work for them and can work for you!
Especially with electric vehicle sales set to accelerate. According to the International Energy Agency (IEA), “Global sales of electric cars are set to surge to yet another record this year, expanding their share of the overall car market to close to one-fifth.”
In addition, the IEA noted, “The new edition of the IEA’s annual Global Electric Vehicle Outlook shows that more than 10 million electric cars were sold worldwide in 2022 and that sales are expected to grow by another 35% this year to reach 14 million.”
Better, according to Stellantis CEO Carlos Tavares, there’s not enough lithium go around for the industry’s plans. “We know that we need lithium. We know that we are not producing as much as we need. We have right now 1.3 billion cars (that are) internal combustion engine powered on the planet. We need to replace that with clean mobility. That will need a lot of lithium,” he said, as quoted by The Detroit News.
Albemarle (ALB)
Not only is ALB getting a boost from the lithium supply-demand story, the company just announced a definitive agreement with Ford Motor. ALB will deliver battery-grade lithium hydroxide to support the automaker’s ability to scale electric vehicle (EV) production, according to the press release. Albemarle will supply more than 100,000 metric tons of battery-grade lithium hydroxide for approximately 3 million future Ford EV batteries. The five-year supply agreement starts in 2026 and continues through 2030.
An interesting concept is the synthetic stock strategy. This is the use of options to set up a position that acts exactly like a stock, but without having to trade in the stock. The synthetic does require collateral for a short option, but it allows you to take the same opportunity and risk profile as a stockholder, while limiting your risk exposure.
Because no stock ownership is involved in a synthetic stock position, a loss on the short side can be rolled and replaced easily. You cannot accomplish this if you are holding shares of stock, so the synthetic position is advantageous. Secondly, if you are bearish, a synthetic stock position allows you to set up a position that acts just like short stock, but without requiring you to actually go short. That is a high-risk position that can also be expensive. When you short a stock, you have to borrow stock from your broker and then sell it. As long as this short position remains open, you have to pay interest on the borrowed shares. You hope the share price declines, so shares can be bought to close at a profit. However, if share prices rise, you could end up with a high loss as well as having to repay your broker. This problem is solved with the synthetic stock strategy.
Earnings Season is winding down. Fewer and fewer noteworthy releases are scheduled for this upcoming week. Here are the ones which have options worth trading. At least worth considering trading.
Tuesday, May 23 Before the Open: AutoZone (AZO), Lowes Companies (LOW)
Wednesday, May 24 After the Close: Nvidia (NVDA)
Thursday, May 25 Before the Open: Best Buy (BBY)
After the Close: Costco (COST)
The one I am most personally interested in is Nvidia (NVDA). I’m interested because Nvidia has more than doubled in price this year. Not “in a year” but since the beginning of this year 5 ½ months ago.
Nvidia is at the forefront of “AI” (Artificial Intelligence). And I happen to be intelligent enough to realize that AI is what’s driving the market right now.
PLEASE READ: Auto-trading, or any broker or advisor-directed type of trading, is not supported or endorsed by TradeWins. For additional information on auto-trading, you may visit the SEC’s website: All About Auto-Trading, TradeWins does not recommend or refer subscribers to broker-dealers. You should perform your own due diligence with respect to satisfactory broker-dealers and whether to open a brokerage account. You should always consult with your own professional advisers regarding equities and options on equities trading.
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