Selling 1 Small-Cap Name, Buying 4 as Market Selloff Calls for Finesse
Morning, gang. As you likely already well know, the portfolio is reeling a bit after the marketplace repriced the value it places on equity in Ocular Therapeutix ($OCUL). The broad market sell-off has extended to a number of portfolio names such as Planet Labs ($PL), Ondas Inc ($ONDS) Evolv Technologies ($EVLV) and SoFi Technologies ($SOFI).
What are we going to do about it? Well, with a portfolio with limited capital to start with that only uses the margin side of the account to short either equity or options, finesse becomes tricky. Remember, we do not use margin here to increase exposure to struggling long positions. As this portfolio is meant primarily to be used as a teaching tool for newer or younger investors and traders, we are, at our hearts, risk averse and do not want to rely upon the use of borrowed funds.
We are going to have to orchestrate an intelligent exit from Planet Labs or at least the possibility of one. Those of you who told me that you cut bait on that one even if I had not were correct in your thinking. I do want to add to EVLV. I do want to add to SOFI, and I would still like to add to OCUL and ONDS. Let’s see what we can do with the funds available.
Portfolio News
Ondas Inc ($ONDS)
On Tuesday, Nikkei Asia reported that the Japanese government intends to establish an organization as soon as next fiscal year that will invest in defense startups and promote exports, with a focus on making drones central to the effort. This is part of an effort to back domestic production of advanced technology. This would potentially draw investment away from U.S. startups in this space, such as AeroVironment ($AVAV), Red Cat Holdings ($RCAT) and Ondas Inc.
Tuesday’s Intentions vs Actual Trades
Intention: Purchase 40 shares of OCUL at $7.85 (limited) or better
Actual trade: Purchased 20 shares at $7.79, 20 shares left, nothing done
Intention: Sell one OCUL December 18 $9 call for $0.80 (limited) or better
Actual trade: Sold (wrote) one OCUL December 18 $9 call for $0.80
Wednesday’s Intentions
This trade must be executed first in order to create some cash:
Sell one PL November 20 $17 call for roughly $1.50 with a $1.40 limit.
Then:
- Purchase 10 shares of EVLV at $4.80 (limited) or better
- Purchase 10 shares of OCUL at $7.90 (limited) or better
- Purchase 10 shares of ONDS at $7.60 (limited) or better
- Purchase 10 shares of SOFI at $15.90 (limited) or better
Current Positions
Long 60 shares of ($ASPN) at $5.1083. Target price: $10. Last sale: $5.21.
Long 100 shares of ($EVLV) at $5.7883. Target price: $8.50. Last sale: $4.74.
Long 130 shares of ($OCUL) at $8.4928. Target price: $14. Last sale: $7.97.
Short one ($OCUL) $9 December 18 call at $0.80, Last sale: $0.87.
Long 250 shares of ($ONDS) at $8.0932. Target price: $12. Last sale: $7.55.
Long 100 shares of ($PL) at $20.3367. Target price: $26. Last sale: $16.52.
Long 60 shares of ($PTON) at $5.0263. Target price: $9. Last sale: $5.03.
Long 7 shares of ($RKLB) at $73.8629. Target price: $97. Last sale: $71.23.
Long 120 shares of ($SOFI) at $16.0609. Target price: $24. Last sale: $15.80.
Short one SOFI $22 November 19 call at $1.20, Last sale: $0.16.
Long 50 shares of ($SWBI) at $14.0414. Target price: $19. Last sale: $14.01.
Long 50 shares of ($VELO) at $10.265. Target price: $18. Last sale: $10.95.
Cash: $245.81.
Portfolio value: $9,443.45, -5.6% from inception on March 24.
At the time of publication, Guilfoyle was long ASPN, EVLV, OCUL, ONDS, PL, PTON, RKLB, SOFI, SWBI and VELO.
