14 May, 2020 seen 47On April 27, 2020, I sold a bull put credit spread on SDC stock with expiry in 32 days. SDC is a new stock in my…
Welcome to another interesting video in which I'm talking about my investments in SOLO (Electrameccanica Vehicles Corp), portfolio margin, credit spreads, and what I think about this penny stock in a longer-term.
Hello, my name is Reinis and I'm your covered calls guy. Today I'm going to cover a topic about a stock I personally like a lot - SOLO. Solo is a little stock, I call it little because the price is cheap, it's under right now it's kind of a penny stock it's trading like $4.30.
So Solo is involved in electromobile manufacturing and they're famous for their three-wheeled little electromobile
if you haven't been living under the rock for the last few years you probably know all this buzz with those electro mobiles with TESLA being the largest and most prominent player in this field, followed by NIO, some Chinese electro mobiles, like XPEV, LI auto and KNDI, and many many more.
But the solo stock, it's I guess it's Canadian, Canadian, an American company, quite frankly I don't know many details about who owns what but they are from north America , I guess.
I first heard about this stock at the end of November 2020, and I said I like the stock, and I will invest about five thousand dollars in this stock. The stock was trading a little bit above ten dollars at that time and there was uh this analyst rating from uh lemon or uh something like lemon citron management, some analysts said this is a junk stock and this is a joke stock that should trade around two bucks per share and it was trading around ten dollars at that time and I said okay I will invest five grands in this stock and let's see what happens um, but instead of buying uh this stock at 10 bucks per share, I decided I will sell a credit spread.
Credit spread is one of my favorite um ways of entering a trade when I don't know how the stock is acting and what's happening and so I was like selling credit spread uh that I will buy this stock for $7.50 and also I bought the put protection at $5 so it was like $7.50 credit spread with expiry in december at the end I got assigned seven contracts I believe I did these were seven contracts for $7.50 and I started selling covered calls and it generated quite good money
But then after a couple of months at the start of march I guess the SOLO stock and not only SOLO stock, all those electromobile stocks TESLA, XPEV, LI auto, NIO neo they started to dip dip dip dip dip dip going uh lower lower lower lower and in the case with SOLO the stock went like from eight to seven six five four and at one moment it it it touched like three it was trading like $3.80 and when the stock was trading around $4.60 I started to sell off some of the solo holdings, uh just to free up some cash um because as I'm trading with a portfolio margin there's a huge the the more that the stock is dipping the more margin I need to pay and um it just started to affect my overall portfolio and I just it was cheaper for me to get rid of this stock right now to free some margin and make some other trades and one of those trades I was doing I sold more credit spreads on solo stock with lower strike prices like $5 / $3 $4.5/$3.5 and this kind of helped me to offset the loss i was taking from the stock sell, until today it's april 27 and i have a few contracts with uh this friday's expiry april 30.
i need to buy 300 shares paying five dollars per share but there's one month this stock right now trades at 4.30. so if i will get assigned it i will lose technically 70 cents per share but i am thinking now um not taking all the stock not all this not all those three contracts i'm thinking of taking just one and the rest to roll forward those credit spreads keep collecting premium and let's see what happens next and overall i'm pretty bullish on SOLO stock
i believe we will see double digits in a year uh i haven't watched lately what analysts are talking about this stock let me check it quickly what analysts are saying about SOLO stock so let's talk forecast looks quite good actually all the analysts are saying the stock should trade above the current price they're saying the stocks range is like seven up to 12 bucks per share so right now solar looks a good investment to me but don't listen to me take your and investigate this stock look on this stock if you feel it's good but some small money into it and yeah quite bullish
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