PDD Trade on Nov 12, 2020 15:49 from Marius: Tradervue User Stock Trades.

Markets seeing some selling with the rotation back into large cap growth stay at home names. VIX rising with markets in the higher ranges. Still strongly bullish on the longer-term trend with dips being supported. Covid-19 climbing cases is the main fundamental driver at the moment seeing some states adding curfews. CPI report came out weaker than consensus signaled more prolonged central bank support as views as deflationary and far from targets.

Fundamental Analysis

PDD reported and beat on earnings with positive reaction despite the markets normal pullback selling. There was news effecting Chinese companies but looking at FXI and some of the larger cap names it wasn't too concerning. Viewing it as a temporary buying opportunity in the mid to long term knowing economic activity is strongest in this part of the world currently.

Quantitative Analysis

Intraday Fundamentals

RVOL 4.192
AVOL 7.659M
ATR 6.73
Inst Own 36.30%
Short Float 2.6%
Shs Float 669.62M
Market Cap 131.79B

Options Statistics

SI 3.985
IV 67.41%
IVP 58%
P/C Ratio 0.469
VWAP 134.21

Heavy call side activity with the positive earnings reaction with the market selling.

Options Position Metrics

OI 2,234
Vol 899
Delta -.01
Theta -.03
Vega .00
Gamma .00
IV series 83.66%
MMM +/- 6.202 (~1 ATR)

Tape Reading

Large call volume in the first hour of trading (close to 30M notional value). Noting if price will stay above that range ITM (125-130) into expiry tomorrow.

Trade Review

PDD traded higher in the pre-market and had an aggressive opening drive and trended higher for the day. The large calls from the prior day stayed in the money and ended closing higher. Going to keep this in mind going forward identifying possibly institutional positioning. First major signal of aggressive buying was on day one with the dip being supported and it consolidating above vwap for the rest of the day.

I hesitated on entry here due to seeing market weakness. Used multi variable analysis to put the trade on. Entered at a lower price because I was waiting. I think this is ok but keeping in mind that the more time I wait out of a position the more is left out of the winning trade. Better to stay patient here as end of the day participants and lead into the next days price action.

I also considered a short here with the overall market but did not do so because there was no clear back side, weakness, and or sellers taking full control throughout the day. Also noting the overwhelming bullish order flow position. Best to stay with momentum and positioning. Can anticipate a turn but wait to see it in variables before acting.