Good morning,
It’s been an eventful couple of weeks. The QQQ 720c deserves a mention, although META, SNPS and DAL have all performed well, as have many other names I hold. I added to the QQQ calls at 4.4, taking total premium spent to 40bps of NAV, and have since sold half at 15. The remaining half last traded at 17.24.
In my post on the 14th September, I mentioned buying these calls as NQ approached 29k. And after the Fed hiked, I called it a clearing event and said I expect Mag7 to lead. The view was there before the move.
As most of you know, META has been a large holding for some time (10% weight originally back in late 2022 in the 90s, 9% now). In the September 14 post, I wrote about Muse and the threat to businesses that retain customers, because switching is a hassle. META is +31% on the month and +15% since that post.
Then there are some other recent names - SNPS bought at 376.5 and DAL at 77.40. Against Friday’s closes of 425.76 and 84.94, these names are up 13% and 10% from entry. Phase 3 is currently up 40% as well.
Anyway, things are going as I expected, yet there is a small detail in this week’s positioning that requires some attention before anyone decides the next trade from here is obvious. The main numbers make it easy to argue that funds still have plenty of buying to do, but if you look at what they already own, the picture looks less promising.
After the rally following the Fed meeting, I think it would be silly not to own downside.
