Nio gets USD740million investment

 One may get exited with the news. To me, this is not something to celebrate. Here are my reasons:

1. This will result in further dilution of the shares.

2. Nio has been actively raising capital for the pass couple of years. They listed in both HK and Singapore stock exchange. They should have more than enough cash for them to expand the business for quite sometimes.

3. I mentioned this before and will reiterate, Nio has not been managing their cost effectively. Their business model of building NIO houses are very costly. I don't think they have generated positive business returns.

4. The battery swap and BAAS are new technology and business model. However, they incur high costs to build and need additional batteries allocations to the over one thousand of battery swap stations. They need to make sure the business and financial terms on BAAS will yield positive ROI and benefit the consumers as compared to the conventional charging networks which is widely adopted by all other BEV brands, so as to attract more interest.

Initial Jobless Claim coming up.

Initial Jobless claims to be released today 22nd June 2023. Stock was sideway to slightly down over the pass two days. Momentum was quite strong and positive last week. It did not continue this Monday and Tuesday. I hope reason being market is anticipating the initial jobless claims data. So, I hope the number is favourable to the market. 

#NIO.

 

Nio has gone up 25% over the past 5 trading days. Next resistance level is $10.025. Certainly hope it will break the resistance on Friday.

Cepton (CPTN)

Cepton (CPTN) has gone up over 50% for the pass 5 trading days. Last night posted 28% up. Stocks market seems to be on the upside over the course of the week. Is this the sign indicating market has priced in the weak macro condition and try to stage a come back, or it is just temporary upside follow by a bigger selloff? It is too early to tell.

Nio today announced cutting prices on all of its models. It will also end free battery swapping services to new buyers. More details can be obtained from link: https://cnevpost.com/2023/06/12/nio-william-li-responds-to-price-cuts/

I see this as positive news. I was expecting them to cut prices few months ago in view of overall sluggish EV sales and competitors had been cutting prices as well. This is inevitable. 

Even with the price cut. NIO is still priced as premium vehicles as compare to other Chinese EV company like Xpeng, BYD etc. I hope the amount of price cut will be able to generate more sales to more than offset the lower vehicles margins as the result of the price cut.

So far, market had reacted positively in HK stock exchange. US stock to be opened in about 1 hour time and premarket now is up 4.5%.

Is NIO going to register Q2 YOY drop in vehicles delivery?

Nio delivered 25,059 vehicles in Q2 2022. In 2023, Nio delivered 6658 and 6155 vehicles in April and May respectively. To match 2022 Q2 delivery of 25,059 vehicles, Nio would need to deliver 12,246 vehicles for the month of June 2023. If Nio misses this mark, it will be quite negative blow for the Nio. It would also put the CEO's remark of Nio potential turning profitable by end of 2023 into question.

SunHydrogen Inc. (HYSR) huge movement

SunHydrogen Inc. (HYSR) has gone up over 35% for the pass 5 days, with above average volume. They is no accompanying news I could find. Short term indicators match with movement of the stock. Will see how it pans out going forward. Hopefully, there will be encouraging news on the commercialisation of their technology.

It has been a frustrating couple of years. Had my eyes on NIO. Did great initially. From $18 to $60+. Since then it has been dropping and currently traded at $7.56. I have had my positive and negative views on NIO. 

The positive:

1. It has good products and their battery swapping technology. 

2. It is expanding into Europe and hopefully to USA soon. 

3. Potentially good business model in battery as a service or BAAS. 

On the negative side:

1. Given the history as a relatively new auto company, I am not sure if there are enough consumers willing to pay for such premium price for a new company with premium products.

2. Their NIO houses are expensive to operate and maintain. Most NIO houses are located at prime locations in China and Europe. Not sure the concept generate enough interest to attract more buyers from this aspect. In another word, not sure of the ROI from NIO houses.

3. Battery swap stations also come with additional cost to build and operate. They need to supply and maintain additional batteries at all the battery swap stations, thus an added cost.

4. Legacy auto makers, especially German's (Mercedes, BMW, VW group), are catching up FAST in their BEVs offering. They have their decades of premium branding to go with. Further, they have had their worldwide presence which are ready to export and sell their BEVs. They are able to expand their BEVs worldwide much more rapidly as what they are presently doing.

5. Battery technology are improving at a much rapid pace in terms of higher capacity with longer range and faster charging time. From consumer perspective, having battery swapping technology and BAAS may still be relevant in terms of the flexibility of changing to newer battery, and be able to swap/rent a higher capacity battery when needed. But the gap is closing in term of the time taken to charge as compare to swap a battery.

6. Management tend to paint a much rosy and overly optimistic expectation on NIO's future direction. When expectations are not met, there would be reasons given. (Not going into detail on this)

So, I hope things could turn around and soon. NIO has been in red. NIO CEO had mentioned that NIO may turn profitable by end of 2023. We will see about that. I truly hope so. But, realistically, I have my doubts and I hope I am wrong.

 I have my eye on Cepton (CPTN). Promising chart.

Week of Sept 30 2013

As I mentioned, one of the things I got into recently was technical analysis. It was a slow learning process but I think I get the hang of it. Other than doing the charting myself, I also rely on stock screen to quickly identify certain stocks that would fit my preset criteria either fundamentally or technically. One very good site that I use for stock-screen is finviz.com. Check it out.

On one of my fundamental screening, a few attractive tickers appeared. One being NetSol Technology (NTWK). At the point, it was traded at $10.58. There were long list of parameters I put in thus not going to list out here, however it consists of PEs, Ratios, Margins.

When I came across the stock, it just released a positive earning and the stock pop up and dropped back since then. It was last traded at $10.14. 

I entered a leap call on this and hope it pays off.

Cheers.

Returned.

Hi! After disappearing for so long, I decided to restart my blog. What had I been up to? Previously, I was a skeptic on technical analysis. After opened to learn more about technical analysis, I am beginning to see the benefits. It is a good tool to have with you to complement your fundamental understanding. Aside from that, I tried out different approaches in option trades. Some worked out quite well but others didn't. I am beginning a more systematic approach on my investment research combining both fundamental and technical analysis. Hopefully, it will help me to pick companies with good fundamentals and valuations. I use technical analysis to time my entry. So stay tuned. I will share my pick in coming posts.

Citi Options Become Crowd Favorite

Just came across this news. Quite a significant piece of data for Citi Option.

http://www.nytimes.com/reuters/2010/04/20/business/business-us-citi-options-volume.html?_r=1&dbk

Week of April 19, 2010

Last Friday was something really unexpected. Solid results overshadow by Goldman Sachs' issue. One good thing was my AIG April $31 Put has given me the return of 5%. I opened this almost exactly 1 month ago.

Updates on my status are:
Short positions:AIG April 17 2010 $31 @ $1.7 (Opt expired. I made 5.14% nett. This is good)
AIG May 22 2010 33 Put @ $7.15 (current premium $0.88 - Looking good)
STP June  19 2010 16 Put @ $3.80 (current premium $2.50)
ARAY June 19 2010 7.5 Put @ $1.15 (current premium $1.35. Still at -ve)

Long position:
C Jan 21 2012 5 Call @ $0.65 (now traded at $1.11)
C Jan 21 2012 4 Call @ $0.77 (now traded at $1.57)

NEW TRADE: C Sept 18 2010 3 Put (I opened this position as hedge my long position on C)

Wishing you all a prosperous week.

Articles Posted at EzineArticles

I submitted my Option Basics article to EzineArticles and it has been accepted a few days ago. Check it out at:
http://ezinearticles.com/?Option-Basics&id=4109315

Week of April 5, 2010

The finance stocks are moving up again which works well for my trade. Comparing to my last block about a month ago, there is definite improvement. I just can't wait for the April window to end to close my AIG April Put and use the fund for my next trade.


Updates on my status are:
Short positions:
NEW TRADE: AIG April 17 2010 $31 @ $1.7 (Current premium $0.08)
AIG May 22 2010 33 Put @ $7.15 (current premium $1.55)
STP June  19 2010 16 Put @ $3.80 (current premium $2.10)
NEW TRADE: ARAY June 19 2010 7.5 Put @ $1.15 (current premium $1.85. Bummer)

Long position:
C Jan 21 2012 5 Call @ $0.65 (now traded at $0.90)
C Jan 21 2012 4 Call @ $0.77 (now traded at $1.32)


Overall, I am in blue except for ARAY, a stock I came to know about recently. A lesson learned to do more due diligence next time.

Week of March 8, 2010

WOW... is all I could say for this week. What a run for finance related stocks.

I managed to close one of my positions.

My current stand are:
Short positions:
AIG March 20 2010 30 Put @ $4.45 - Closed at $0.25. (~13% net gain..Hooray)
AIG May 22 2010 33 Put @ $7.15 (currently traded at $4.05)
STP June  19 2010 16 Put @ $3.80 (currently traded at $3.30)

Long position:
C Jan 21 2012 5 Call @ $0.65 (now traded at $0.79)
C Jan 21 2012 4 Call @ $0.77 (now traded at $1.13)


I am glad for the turn around. What I have been waiting for for 2010.


I hope this week would end with positive notes. See you soon..

Week of March 1, 2010

This is my first new post since moving from optiontalks.blogspot.com. I move here simply because I like this name better "optionists.blogspot.com".

Enough said on that. I stop my update for quite a while. Anyway just wanted to share some updates.

Feb 2010 was not a good month for me. I was down 4% mainly due to AIG and STP. Nevertheless, I did roll over the positions.

My current stand are:
Short positions:
AIG March 20 2010 30 Put @ $4.45 (+ve)
AIG May 22 2010 33 Put @ $7.15 (-ve)
STP June  19 2010 16 Put @ $3.80 (-ve)

Long position:
C Jan 21 2012 5 Call @ $0.65 (-ve)

I am trying to increase my position on Citi, which I think have high potential to regain it's business.

Cautiously optimistic on the economy amid still high unemployment rate at close to 10% in the US.

Happy trading folks.

OPTION Basics (3) (CALL and PUT - Sellers' Perspective)

Now, we turn our attention towards “sellers” perspectives.

Call Option

Sell Call: When an investor sells a Call, he is selling the right to Call buyer, or granting the Call buyer the right to buy 100 shares of the underlying stock at the striking price from him, any time prior to the expiration. Another way of putting it is the seller is obligated to sell 100 shares of the underlying stock to the Call buyer at the strike price.

In contrast to the Call buyers, Call sellers collect the premiums.

Example 1:

Mr. A sells “1 AIG Aug 12 Call at $1.50”.

Mr. A is selling the right to the Call buyer, say Mr.B, to purchase 100 shares of AIG at the price of $12/share between the point of transaction till the expiry date from Mr. A.

The call seller, Mr. A would collect the $1.50/share (the premium).

Suppose at the end of the expiration, AIG stock was traded at $10/share, the option would expire worthless and the Call seller, Mr.A, would earn the full premium.

So a Call seller is bearish on the stock. He will earn the full premium if the shares expire below the strike price.

Uncovered Calls/Covered Calls

When you sell a call but you do not own 100 shares of the underlying stock, this option is call “naked option”; “uncovered option” or “uncovered call”. This type of trade is extremely risky as the share price could have unlimited up side.

Given the earlier example:

Mr. A sells “1 AIG Aug 12 Call at $1.50”.

Suppose the share of AIG has gone up to $30/share. The buyer exercises the option. Mr. A needs to buy 100 shares of AIG from the market at $30/share and sell them to the Call buyer at $12/share.

Thus for Call seller, it is always good to own 100 shares of the underlying stock.

So when you own the 100 share of the underlying stock and when you sell the Call, you are covering your position. Such trade is called “Covered Calls”
Put Option

Sell Put: When you sell a Put, you are granting the Put buyer to sell you 100 shares of the underlying stock at the strike price. Should the Put is exercised, you are obligated to buy 100 shares from the Put buyer. 

Put sellers collect premium.

Example 2:

Mr. A sells “1 AIG Aug 12 Put at $1.50”.

Mr. A is granting the Put buyer to sell him 100 shares of AIG at $12/share.

Suppose at the end of the expiration, AIG stock has risen to $15/share. The option would expire worthless and Mr.A would collect the full premium.

Thus, Put seller is bullish on the stock. He hopes that the share price would close above the strike price, thus the option would expires worthless so that he could collect the premium.

OPTION Basics (2) (CALL and PUT)

There are essentially two types of options:

1. Call Option

2. Put Option

For each of the Call/Put, there will be buyer and seller. Let us look into each of the scenario. We will go through “buyer” perspective for both Call and Put before touching on “seller” perspective.

Call Option

Buy Call: When an investor buys a Call, he is buying the right to purchase the underlying stock (100 shares) at the specified fixed price (strike price) by the specified date (expiration) in the future. To re-iterate the examples given.

Example 1:

Mr. A buys “1 AIG Aug 12 Call at $1.50”.

Mr. A is buying the right to purchase 100 shares of AIG at the price of $12/share between the point of transaction till the expiry date.

Mr. A pays $1.50/share (the premium) to attain this right.

So a Call buyer would profit if the share price goes up. A Call buyer is bullish on the stock.

Suppose at the end of the expiration, AIG stock has risen to $17/share, the buyer would close the transaction and make $5 gain ($17-$12) on the stock, “EXCLUDING” transaction fees and premium paid.

Put Option

Buy Put: When an investor is buying a Put, he is buying the right to “sell” the underlying stock (100 shares) at the specified fixed price (strike price) by the specified date (expiration) in the future.

Example 2:

Mr. A buys “1 AIG Aug 12 Put at $1.50”.

Mr. A is buying the right to Sell 100 shares of AIG at the price of $12/share between the point of transaction till the expiry date.

Contrary of buyer of Call, the buyer of Put is bearish of the stock. A Put buyer would profit if the share price drop.

Suppose at the end of the expiration, AIG stock has dropped to $9/share, the buyer would close the transaction and make $3 gain ($12-$9) on the stock, “EXCLUDING” transaction fees and premium paid.

On my next post, I will touch on sellers' perspective for both CALL and PUT.

OPTION Basics (1) (What is an Option?)

One of my plans is to use this blog to share what I know and learn on option trading, other than creating a place to welcome anyone to share their experiences and success stories and even set backs.

So...What is an Option?

An option is a contract that provides the buyer/seller with the right to buy or sell the underlying stock (100 shares) at the specified fixed price (strike price) by the specified date (expiration) in the future.

A unit of an Option is called a contract. A contract consists of 100 shares of the underlying stock.

Strike price refers to the price which the buyer/seller agree to transact on irrespective of the actual price of the stock in the future.

E.g.

Mr. A buys “1 AIG Aug 12 Call at $1.50”.

1 – number of contract (100shares/contract)

AIG – the underlying stock

Aug – Option expiring month (Option expires on the 3rd Friday of each month)

12 – is the strike price

Call – Call option

$1.50 is the premium Mr. A pays for this contract. This $ is stated as per share basis.

So $1.50 X 100 shares => Mr. A is paying $150 of premium (excluding transaction fees)

In essence, Mr. A is buying the right to purchase 100 shares of AIG at the price of $12/share between the point of transaction till the expiry date.

Mr. A pays $1.50/share (the premium) to attain this right.