Defined Risk Strategy on CHPT
The Biden administration approved the first $900 million (of $5 billion) in spending for EV charging infrastructure, sending stocks like QS, BLNK, FSR and CHPT soaring with the announcement and then neutralizing today. The 50 and 100 EMA's crossed, which some might say is a buy signal, but the RSI tops are sloping slightly down -- uncertain if it will trend down briefly.
Here's how I'm defining my risk, sacrificing a bit of upside for downside protection. This makes up to 22% (35% annualized) while also cushioning ChargePoint from a fall of up to 46% (to below $9.81, through 5/19 next year) before my investment breaks even.
Hedged options:
Buy 1 $18 call
Sell 1 $22 call
Sell 2 $10 puts
Exp 5/19/23
Capital Required: $1994.64
Here's how I'm defining my risk, sacrificing a bit of upside for downside protection. This makes up to 22% (35% annualized) while also cushioning ChargePoint from a fall of up to 46% (to below $9.81, through 5/19 next year) before my investment breaks even.
Hedged options:
Buy 1 $18 call
Sell 1 $22 call
Sell 2 $10 puts
Exp 5/19/23
Capital Required: $1994.64
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