Buy Call LI

March 8, 2024
Sell Existing Position: Sell your LI June 40 Calls for $2.75 or more.

The time has come to finally lock in a MONSTER profit (approximately 500%) on our NTNX position as growth stocks have reversed fairly hard today. And at the same time, we are going to walk away from the final piece of our LI calls that have mostly been a waste of time.

To execute these trade you need to:
Sell to Close your LI June 40 Calls

Exiting both of these positions may be a mistake. However, I’m growing a touch concerned that the market may have overheated in the short term, and I want to continue to reduce our exposure just a touch.

February 27, 2024
Sell a Quarter of Existing Position: Sell a Quarter of your LI June 40 Calls for $8.80 or more.

LI stock is trading higher yet again today, which has helped push our half position in the June 40 calls to an approximate profit of 20%. And while I am thrilled this position has come back to life after being a total disaster for months, option activity into this big stock move higher is mixed to even bearish. For that reason, let’s sell another piece (this time for a profit) and then see how the stock performs going forward.

To execute this trade you need to:
Sell to Close a Quarter of the LI June 40 Calls

Stepping back, I have managed this position poorly … though with wild stocks, that happens from time to time. Let’s hope I manage this sale and the final piece of the trade better going forward.

January 29, 2024
Sell Half of Existing Position: Sell Half of your Li Auto (LI) June 40 Calls for $0.70 or more.

For the past several months, China-related stocks have not been able to get out of their own way, and that has not changed as the calendar flipped to 2024. Because of that, I am going to sell half of our LI calls and then will step back and evaluate the stock and the balance of our trade in the weeks to come.

To execute this trade you need to:
Sell to Close Half of your LI June 40 Calls

Hopefully, this sale is a terrible mistake and LI stock and the balance of our calls trade much higher.

September 21, 2023
Buy the Li Auto (LI) June 40 Calls (exp. 6/21/2024) for $8 or less.

The market is under pressure again today following the Federal Reserve event. We are going to take advantage of this weakness to buy the stock that has attracted the steadiest bullish option activity, Li Auto (LI), while selling two positions (FCX/SHOP) that are not working. Let’s dive in.

LI has seen wildly bullish option activity the past two weeks, including these trades:

Buyer of 2,000 Li Auto (LI) January 40 Calls for $4.25 – Stock at 38

Buyer of 7,000 Li Auto (LI) January 40 Calls (exp. 2025) for $10.40 – Stock at 38.5 (rolled down from the January 50 calls)

Buyer of 3,000 Li Auto (LI) June 30 Calls for $12.5 – Stock at 38.5 (rolled down from June 40 calls)

Buyer of 1,000 Li Auto (LI) May 55 Calls for $3 – Stock at 39

Buyer of 2,000 Li Auto (LI) June 32 Calls (exp. 2024) for $13.25 – Stock at 40.65

Buyer of 1,000 Li Auto (LI) January 40 Calls (exp. 2025) for $12.25 – Stock at 40.5

Buyer of 2,000 Li Auto (LI) June 35 Calls for $11.60 – Stock at 40.75

Buyer of 3,000 Li Auto (LI) June 35 Calls for $10.70 – Stock at 39.5

Buyer of 1,000 Li Auto (LI) January 40 Calls (exp. 2025) for $11.30 – Stock at 39.5.

Let’s get involved, targeting the June expiration cycle that splits the middle of sorts in terms of calls that have been bought by the hedge funds/institutions recently.

To execute this trade you need to:
Buy to Open the LI June 40 Calls.

The most you can lose on this trade is the premium paid, or $800 per call purchased.

The risks I see in this trade are simple: The market looks suspect, and China stocks look even worse. And for those reasons, there absolutely is risk.

That being said, I think LI looks mostly fine, this option activity is too strong for me to pass up, and without some risk there can’t be reward.