Hello everyone! Today i want to share some option strategies with you!
1.
Trade idea on $Aehr Test(AEHR)$ for earnings.
Earnings date: July 8 after market close
Expected move: ~19% (avg. = ~25%)
Trade targets: STO July 18 expiry, 10 or 12.5 put strikes
Points to consider:
- AEHR has been putting in +/- 20% moves the past several earnings.
- Expected move from spot (as of Friday's close) drops price down to around the 12.5 area. A 35% move drops price down to around the 10 area. Obviously, this is subject to change based on where AEHR is trading on Tuesday.
- Daily timeframe dating back to past three earnings cycles has volume support and point-of-control just below 12.5.
- Weekly timeframe shows most of 2024 established the low 12s as point-of-control with a dip and reclaim of that level heading into this earnings release.
- Delta flip at 10 level. Currently, call gamma exposure outweighs put gamma exposure. Obviously, this could change this week.
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2.
Okay ... let's get to the good, bad, and ugly about what this "big beautiful bill" getting passed/signed means for $Eos Energy Enterprises Inc.(EOSE)$ ...
Good:
- Offers targeted benefits for EOSE through the preservation of the 45X tax credit and support for domestic manufacturing, which could enhance its production capabilities and market position.
- The bill’s broader emphasis on strengthening U.S. supply chains and industrial policy aligns with EOSE’s “made-in-America” battery production model. By prioritizing domestic energy solutions, EOSE could see increased demand from customers seeking to leverage these incentives.
- The bill’s provisions could benefit EOSE in the long term by supporting battery storage as part of a fossil fuel and nuclear-focused energy strategy.
Bad:
- The bill’s reduction of solar and wind incentives may limit demand for battery storage in the near term since battery storage is often paired with solar and wind to store energy. Hence, reduced investment in these sectors could decrease demand for EOSE’s batteries.
Ugly (more for us versus EOSE):
- One of the things that definitely sucks about the bill and its effect on EOSE is increased energy costs. The bill is projected to raise household and business energy costs by $170 billion, which could strain budgets for renewable energy projects, indirectly affecting EOSE’s market.
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