RH Trade on Jun 10, 2021 15:33 from Marius: Tradervue User Stock Trades.

Equity markets continuing in "floatation" trend. Rotational trends in place with tech large cap + small cap growth seeing buying with value XLF, XLI, XLB seeing some selling. Worth noting that XLE and CL_F still seeing bids. CPI reports came in within transitory inflation guidance by the FED. Fixed income markets seem to be buying into this as well with 10Y yields trading at 3 month lows and the bond yields seeing buyers step up increasing after stabilizing for 1H21. Gold is consolidating in the mid-term. ECB with continuing dovish monetary support. Keeping in mind the US policies into 2H21 and the next FOMC meeting. Interest rates still low and future pricing in an increase in the near + mid-term timeframes is also low.

Fundamental Analysis

RH formerly Restoration Hardware reported adjusted EPS of 4.89 with revenue growing 82% Y/Y at 860.8M. Operating margin increased 22.6% from 10% in the prior year. The company stated they would be able to maintain their margins above 20% with their luxury positioned business model and sustain any economic downside scenario's. They will be expanding it's locations starting in Europe then globally. FY21 revenue guidance was raised to 25-30% from 15-20% with growth expected to accelerate into FY22 and forward. The company notes the robust housing market with low interest rates and strong reopening in the US.

Quantitative Analysis

Intraday Fundamentals

RVOL 6.74
AVOL 570.04K
ATR 27.68
Short Float 14.21%
Shs Float 18.87M
Inst Own 97.60%
Market Cap 14.83B

Options Statistics + Tape Reading

SI 5.793
IV 45.83%
IVP 20%
P/C 0.972
VWAP 701.253

Elevated options order flow with momentum on the call ASK side. Notable call side writing at the open possibly indicating institutional hedging given the high ownership.

Options Positioning

OI 215
VOL 337
Delta -.01
Theta -.17
Vega .01
Gamma .00
Prob T 2.31%
Prob ITM 1.17%
MMM +/- 21.362
IV Series 54.33%

Order book is thinner but position manageable when in-play. Positioned well within risk parameters but current brokerage side margining system needs to be looked into with these type of plays.

Technical Analysis

Notable gap-up with elevated volume over HTF resistance + short float at 14.21%. Most volume done on ASK with buyers in control and in relative strong close at HOD. Would like to see a close more higher at the EOD as it was being accumulated intraday. IV crush with lower expected movement.

Notable accumulation intraday but failed move higher EOD which may have indicated the next day's stuffed move. 695 was the level and above VWAP. Strong buying during the earnings call and pre-market + open.

Gap-up into ATH proximity over 650 R + above 2 AVWAP's from last two ER's + above VPOC's at 610, 635, and 685. Notable RVOL and buying.

EOD day 1 failed move close possible signaled the next day's move here with the sellers taking control and close at LOD. 695 accumulation level did not hold and daily candle looks like a bearish engulfing candle. Gap fill likely but keeping in mind the accumulation done on day 1. Also noting the lumber and housing sector's recent selling + weakness as this is a market sector rotational theme playing out.

Trade/Risk Management & Review

(A+) setup with (B) execution day 2 price action did not follow through as anticipated. Although positioned well within risk parameters this is another trade with elevated risk if I want to continue to build into it. This fit the criteria as an options scalp trade and I need to differentiate the variable's for a position up to 4DTE.

Also noting my brokerage system now calculates my margins similar to portfolio margining. Will be researching additional info as this is new to me hence part the reason for the close mid session day 2 (additional reasoning is seeing sellers take control of the 695 accumulation level). My margin was tripled into the following day and I was issued a margin call. I spoke with a Sr. Portfolio Risk Manager to clarify. More preparation is needed on my end as I work to establish continued growth and access to more sophisticated margin/leveraging systems.

Weekly Trading Review

I will be scaling down my trade positioning as the market enters a slower period at the tail-end of earnings season. Will continue to trade A+ setups within recognizable market moves. No need to press into trades right now in the market. Better to accumulate experience and knowledge here within elevated risks and new variables. Scaling down active trading but scaling up preparation for SMB options mentoring into the summer.