SPLK Trade on Dec 3, 2020 15:11 from Marius: Tradervue User Stock Trades.

Markets still trading in similar theme as the beginning of the week. VIX and protective options order flow starting to pick up some bids but nothing notable as of yet. More names reporting but market not moving too much from those catalysts.

Fundamental Analysis

SPLK came in notably under expectations with Q3 reports. Missed EPS and REVS. They also guided lower for Q4. In previous quarters the company stated that it would come in performing and guiding better. This has not been the case and the companies guidance was not as great this time around. It has a very high institutional float and in an area of cloud / SAAS technology which most of its peers have outperformed for the year. Notable downgrades with revised estimates accompanying the report from analysts followed.

Estimate Trends

Price Target

Downgrades

Quantitative Analysis

Intraday Fundamentals

RVOL 10.995
AVOL 2.764M
ATR 9.28
Short Float 5.08%
Shs Float 159.45
Inst Own 94.20%
Market Cap 24.7B

Options Statistics

SI 19.305
IV 49.40%
IVP 36%
P/C 0.504
VWAP 160.148

Noting higher call volume with a marginally more traded at the BID possibly implying more selling. Delta's for the corresponding are more from 0-40.

Options Positioning

OI 363
VOL 2,105
Delta .02
Theta -.09
Vega .00
Gamma .00
Prob T 2.54%
Prob ITM 1.25%

MMM +/- 9.328
IV Series 104.69%

Positioned in a high liquidity area where R/R made sense in my playbook. Much more different trading characteristics than my previous trade when IV was around 190% and more on a technical/quantitative side of a playbook.

1Y Implied Volatility Chart

Seeing the peak in March but fairly stable since.

Options Position last 20 days

Tape Reading

Heavy call side selling in the 170's and 200. Put side large orders with higher delta's maybe implying more buying and protective positioning.

Sizing + Scaling Trade Management Notes

Originally I had sized in half position into the trade. As the trade developed towards the end of day I hit the bid and faded price as it traded into vwap. Noticed a flurry of sell orders immediately after my order possibly a sign of other participants seeing + executing on the same signal, computer model orders, and or market maker adjustments. Something pretty cool to see in realtime which was confirming my size-in and directional conviction.

Technical Analysis

Longer-term time frame on the daily price is almost to where it had traded 1 year ago. 175 is a major support area and seeing price gap down below that is notable because this can mean that positions established in there can be stuck and underwater. The institutional ownership of the shares float is 94.2% which is very high. If those are indeed institutional positions then more likely if price trades back to those levels there may be more supply met with demand and original positions waiting to offload/sell. This is in conjunction with the fundamental developments caused by the recent year company performance, earnings, and guidance.

Trade Review

Trade was held as planned. Keeping in mind the supply at 175 and the institutional float of about 150M shares at 94.2%. Staying open minded to the fact that this is widely held by institutions and cognizant of order flow from larger traders. This is a shorter-term time frame trade integrated with key longer-term supply/demand technicals and fundamentals in play. The +10 RVOL yesterday reflecting about 30M shares traded is notable institutional foot prints exiting positions.

Based on the price action today it looks that there is accumulation and price compression seen with the price action against the VWAP benchmarks. I still think price trades lower given the overall context but still at a logical level of demand looking at VPOC.

Grading this trade as an A++. My highest conviction trades with both systematic and discretionary process show strong edge in earnings trades accompanying supply/demand flow dynamics. I was fully sized by scaling into the trade with current capital allocation. Something I can continue to work into the future as most of the time with scalps I'm already in large relative size. Always keeping in mind the capital allocation as stock trading characteristics can change abruptly and planned capital can be used quickly. (as in the earlier case this week with MRNA at 190% IV)