RH Trade on Mar 25, 2021 15:25 from Marius: Tradervue User Stock Trades.

Markets coming of more selling and choppy price action but with a bounce in the mid-term.

Fundamental Analysis

RH is a retailer in home furnishings and has been in an area of the market that has been stronger because of the correlations with the housing industry. They beat EPS 5.07 vs. 4.78 and revenues 812.6M vs. 797M. Both metrics are posting notable increases YOY. Guidance was also notable due to the strong economic rebound in the job + housing market. They expect to grow more with the solid momentum in place.

Quantitative Analysis

Intraday Fundamentals

RVOL 3.57
AVOL 429.06K
ATR 29.34
Short Float 12.94%
Shs Float 18.25M
Inst Own unk
Market Cap 10.17B

Options Statistics + Tape Reading

SI 3.33
IV 48.53%
IVP 6%
P/C 0.744
VWAP 509.547

Elevated RVOL in the order flow but smaller in terms of trades I'm usually in. Noting the higher call volume at the ASK confirming price direction and momentum. Seeing a couple large call buy orders above 500 and at 600 at the open.

Options data stats/notes day prior to catalyst (n/a)

Options Positioning

OI 368 1129
VOL 362 519
Delta -.01 -.01
Theta -.15 -.29
Vega .01 .01
Gamma .00 .00
Prob T 2.59% 3.61%
Prob ITM 1.31% 1.84%
MMM +/- 16.269
IV Series 55.50%

Not as tight spreads here in the chain and lower volume but relatively higher and ok in terms of an in play stock. Added to the position after trying to bid in at a lower strike but not adding the same amount of risk of the initial position. This was also a higher OI area.

Options data stats/notes day prior to catalyst (n/a)

Technical Analysis

IV crush, elevated RVOL, and more activity on the ASK. 500 was sold into but quickly back above.

VPOC above 500 and AVWAP from last earnings. Current price momentum to the upside supported by fundamentals, order flow, and momentum. Analysts upgrades today as well.

Trade/Risk Management & Review

This is my largest scalp options position to date. I received an alert from my broker about my concentrated position at the open. I have seen this in the past before and will be reviewing my risk management parameters. This was an A+ setup in my playbook. The options order book was less liquid than I'm accustomed to so there was a slippage concern in case of exiting positions which is probably relevant to the alert.

The trade was executed as plan with an alternate scenario in which if it would have traded against my position similar to GME. The order flow model was used in conjunction with my discretionary analysis as usual.

I did notice that the breakout had continued momentum. The trade yielded what it was designed to do but I think there may be something else I can position to capitalize on movements when there is continued momentum. Option writing has been a key developing area within my playbook.

Will be exploring additional edges in the new mentorship program and working with the SMB options tribe team. Humbled and looking forward to continue growing and collaborating with others to bring trading to the next level.