David Lincoln: UVXY, Earnings, Facebook, and Tilray (of course) with David Moadel
that stick with that you don't need to be an expert in like crypto and gold and
silver and Fibonacci and RSI and all this stuff all you need to find is a
little spot in the finance world where you feel comfortable to specialize and
you can make a little money all right welcome to looking at the markets with
David Modell I've got a special guest and a return guest a repeat guest not
the first time and hopefully not the last time it is mr. David Lincoln he's a
youtuber like me he's a finance guy like me he likes his stocks he likes his
options he knows a little thing or two about options cuz he's a former market
maker I can't I can't boast that I've ever been a market maker but he has so
he's got the inside scoop and he's a stock twit sir is that a word I just
made a word he's a very popular on stock twits dot-com Twitter and check out his
youtube channel either type in David Lincoln or David Lincoln finance into
the youtube search box or just click on that link below in the description of
this video go to check out David Lincoln's videos do it you'll be glad
you did it all right mr. David Lincoln thank you for showing up on my show once
again well thank you for that amazing introduction David and yeah it's been a
little time since last time how long ago was it would you say like about maybe
six months ago that I came on last that sounds correct it's been about six
months you got over a thousand views on that video which is not bad at all
usually the you know the 1,000 views Club is reserved for people with the big
big followings and you're getting there you're making it happen I understand you
you have a connection with gorilla trades now is that gorilla trades com
yes there's this guy Ken Berman who basically it was a great stock picker
I guess in college and it's one of those stories where he turned you know X
amount into 200 times X amount I think it was like 50 grand into like 20
million or something crazy like that and I actually hooked up with them over a
YouTube sponsor type website that connects youtubers with potential
advertising partners okay well that's pretty cool so check out David Lincoln's
channel check out gorilla trades dot-com and tell him David Lincoln Sencha
alright so the big hot topic now of course is the marijuana stocks
I've been putting out videos about marijuana stocks my friend rich from
rich TV live.com he's big into those he's an expert I used to have Jeffrey
Friedland on here he used to talk very knowledgeably on my channel every week
about marijuana stocks and now well before it was canopy growth corp the the
pot stocks would all follow canopy like little puppy dogs if canopy when I was
like it was like Bitcoin you know with with all the alt coins following Bitcoin
everybody looked to canopy growth Corp as the leader they were played now
they're playing follow the leader with tilray
of all this is a stock that IPO and a couple months ago and now everything is
following tilray can you help me to make some sense of
this well I'm not a real knowledgeable guy in the cannabis industry and when I
was trained to trade to trade stocks I was told look it really doesn't matter
what the background story necessarily is behind the issue what matters is the
price action and what's going on in the options order flow and whatnot so I
don't know a ton about tilray I know that like you said it IPO die believe it
like $20 like to maybe in like July blasted up to like about 70 and then
last week just accelerated to the stratosphere
got up to 300 and back down and yeah like you said um it came sort of came
out of nowhere and became this this huge leader but I think that happens a lot in
new industries i if a lot of people have compared it to the dot-com sort of boom
and it's obviously not as big as the dot-com boom but you have all these
little mini players and but a lot of it is just the dynamic of a lot of these
players being in Canada where things have been pretty much legalized by now
I believe Justin Trudeau had the whole process has gone through the government
and it's been legalized for late-october recreational use of marijuana and as
many people talked about in the US there's been a lot of resistance from
the current administration towards legalization of marijuana so it's
everything sort of comes sideways into the US market from Canada and that sort
of dynamic has created a lot of just these like no-name players that have had
the opportunity to just accelerate to the top and tilray just happened to be
at one of the big ones sure but what an extraordinary story this is and you
mentioned it kind of resort people are saying it kind of resembles the dot-com
bubble the cryptocurrency thing that happened up until December of
2017 it's starting to kind of look like that way way up and now starting to come
back a little bit although today it went up pretty substantially and I saw it in
one of your videos recently that people were giving you flak on stock twits comm
which is a popular message board for stock traders and options traders people
were giving you flak because you weren't on board with everybody else who's
saying oh short tilray the tilray is going to go to zero it's going to crash
and you were actually bucking the trend and going you know thinking for yourself
and you're getting some flack for that is that true well certainly and I
I never claimed to know what's gonna happen in an issue I was trained as a
market maker to be delta-neutral which essentially means that you're not taking
a position to the upside of the downside in general but I kind of felt just that
this is gonna even if it's a long term short which a lot of people seem to say
and every article says you should be shorted which is makes me think that
maybe you should be longer just for that reason as a contrarian but we know even
in a situation where something is overvalued and it's going to go down
that it's going to suffer many of these pops because what happens is all these
people short it and then somebody comes in and accelerates it's upside and then
all the retail people the weak hands just they panic and they buy back their
shorts and the thing you know has these squeezes where it's gonna pop up and we
saw that kind of this more yesterday afternoon into this morning I know there
has to have been retail people that were short from like a hundred last night and
then after the close it got down to about 95 and then it just ripped on some
pretty inconsequential news about them I guess giving like a couple doses of
medication to some people in Australia the thing rips up 20% and that just
seems like to be more of a sort of a short squeeze type situation in this but
yeah just to get back to it I'm sort of a delta-neutral trader but my idea was
that it is gonna have some point to bounce and so I I was long in the sense
that I sold out of the money puts and put spreads you know with a stock around
in the 1:12 range I was selling the 90 put and 85 75 put spreads a couple weeks
out and just looking for that that bounced it from somewhere it come from
300 it has you know it it's not gonna go straight from 300 zero it's gonna bounce
at some point and that was my play was to kind of play that bounce yeah or at
least play the time decay the theta decay if it just goes sideways if it
just drifts if it stabilizes you don't even need for the stock to go up
necessary you don't even need a balance it won't
hurt you if it does it'd be nice and that's the power of selling options
which I've been a fan of for a while now so speaking of the world of options what
is the play right now is there a play right now with a market that just
refuses to go down in any meaningful way is the is the economy just so wonderful
in the United States that we can expect this throughout the end of the year is
is it safe to sell sell puts at nosebleed market levels in the equities
markets what do you think well that's a good question Dave and I I think that we
first of all just have to acknowledge that none of us know what's going to
happen and if so if you interview someone and they come on they say this
is going to happen then you need immediately have to be a little
skeptical of it because the first you know a lesson learned of being a
long-term market participant is nobody really knows what's going to happen but
my message remains the same as it has been for about a year now which is
basically like I'm of the opinion that we're going to slowly move up until
further notice and that's the odds-on play for me now it's certainly not as
exciting a message as oh I see signs that we're going to crash in a minute or
two but that's just the feeling I have right now or not feeling but just my
market view right now is that the trend is an uptrend if we look at a 60-day
chart or a six months charter your chart you see a big uptrend and there's not
until that changes I'm still of the opinion that you don't you don't want to
sell puts with abandon but just say that markets old or new they're only be no
way to tell that until sometime in the future looking back on this market so I
remain with the court I've got boring prediction that we're gonna slowly rally
like we have been making money and the markets is usually boring actually being
profitable is not that exciting regardless of how some people try to
sell it people who do really they'll usually do it in boring ways not
always you get your amazing success stories but yeah the consistent income
should be kind of kind of boring and when you sell option premium you're
counting on the boring nature of the markets markets go they drift sideways a
lot more often than they go vertical vertically up or down would that be
accurate yeah totally and it's interesting have you seen this video
there's a very popular video that was going around for the last couple years
by this guy Anton creel who is a famous Goldman Sachs trader and he was talking
about how like the the kind of cowboy days of the a of the 80s and 90s are
gone and now to make money you have to do these like swing positions over
several sessions and I think some of these MJ stocks actually are proving
that Theory wrong I mean it's been extremely exciting trading not just
today but another issue and Bev recently and also just I think that Aurora is
going to be listed in the US market shortly now its symbol is AC BFF but
they had earnings come out today last night and they're the stocks turning
around 10 right now but I think these players are really exciting and it's
been amazing until right with the volatility up in the 200s there's not a
lot of liquidity in the options at all and the markets are super wide and you
can kind of come up with your own ideas and I've been just having a blast
trading that like for example how do you value a 60 level put a week out in this
thing is trading 112 well two days out probably a sixty level point is
completely worthless three days hours to cut probably
completely worthless so there's this kind of time period in a lot of these
options where they go from very valuable to worthless like almost overnight and
so there's really exciting plays out there in until right and these other
marijuana stocks that I really haven't seen that kind of action since the 90s
and so as is incredibly exciting regardless of what
the industry is that we have this action going on in the last couple weeks and
it's been extremely exciting for me there used to be no options available on
marijuana stocks and now canapé has options tilray has options
Chronos has options so it's really opened up quite a bit and options on
marijuana stocks that's volatility upon volatility
alright that's moot that's leverage upon leverage really so it's it's really
something I imagine those those can really move and you got to be careful
so definitely small position sizes right yeah you definitely want to make sure of
to limit your risk I've basically mostly been doing limited risk spreads like a
call or put verticals but it's very exciting like I said it's a in a sense
sort of a sexy product in that people are into trading it and you know the
stock market is a real popularity contest and doesn't really have rhyme or
reason at times until Ray you know the valuations have been huge on it you know
as far as the the price the stocks go onto and people say well this shouldn't
be and these numbers and these pages don't do this but in the end you have to
throw away all those numbers and everything and just trade what's
happening in front of you and react to what's happening in front of you and
like I said the markets a popularity contest you know Tesla and paper
shouldn't be where it is in stock price you know they don't make money they're
burning money but it's popular it's sexy well marijuana stocks you know it's kind
of an outlaw sexy thing and it's brought in this amount of capital and actually
kind of not so smart capital in there so there's chances to make money there's a
lot of retail people who have no experience with trading this sort of
issue that are jumping in with you know full full force and that creates
opportunity for all of us so I'm extremely excited about it and hope
there's more issues like this moving forward you're so polite the
not-so-smart money most people would just say the dumb money is coming in and
the Robin Hood traders oh no I'm going to lose some subscribers for that one
now Robin Hood's great but yeah yeah it's true would you say that people who
buy who would buy an asset any asset after a 100% or 200% run-up would you
would you hesitate to call that dumb money I mean considering both of us are
contrary in nature how do you if a client came to you and said I'm thinking
about taking a position in something that went up that much what would you
say to them well I mean when you put it that way it doesn't sound like like a
very smart move at all I know that a lot of these people are just kind of
thinking of well on this one little burst I'm just going to jump on board
for a little bit of it and get out before the top of the burst but I can
see people getting just killed and especially the stock end Bev it traded
last week from one dollar up to two then to five then to 10 and it traded a ton
of shares just a ton of shares and also had this other marijuana stock I think
it's cross CRO n same thing trade a ton I mean it
was like 28 million shares in in Bev and I know a ton of people bought six and
sold for and what it is is the phenomenon of chasing after it turns and
what that is is like people hear on TV oh wow this thing doubled yesterday and
they go oh wow I want to I want to double my money and so they go into it
and they follow the returns it's the same thing as people back when mutual
funds are popular going into your money magazine you look at which mutual fund
made the most returns last year and you put your money in that one well that
doesn't really make sense because it's already going up a and those are the
returns from the year before what you want to do is which I know the way you
trade Dave is to to find value of things that are depressed things that are
offered things that nobody wants and buy those things so that you can get that
move as opposed to chasing after a move that's already happened right but only
in great companies assuming we're talking about stocks representing
companies here only by something that's depressed if it's a
great company and even then you might not buy it GE General Electric I
wouldn't buy it now I still think it's a good company but I'm gonna wait until
the market is done punishing it before I even consider going in if I choose to
because General Electric could become the next Kmart or Sears for all I know
or Kodak so but on the other hand if a great company like if a Starbucks goes
down for no good reason if it go let's say Starbucks goes below 50 I'm gonna
pick some up because it's Starbucks for goodness sake that's just one example
Nike today Nike had good earnings went down
anyway want to talk about that for a minute
is there any reason ever to buy option premium before earnings and you know
what my answer to that is probably gonna be by the way I phrased it but would you
ever make an earnings play before earnings well I mean a lot of people
will do a play like by buying premium about two weeks before earnings and then
you hold on it to it up until earnings if something happens during that period
you get the ride and a lot of times if you buy premium two weeks before
earnings volatility will continue to climb higher in a sense if you buy a
call for two bucks it might stay at that to box without decaying for those last
two weeks okay and so if you get a move before earnings then you can capitalize
on that move and dump it but so hold it through earnings a lot of times even the
move is not going to be enough to cover that collapse and premium because we get
a collapse and options premium right after earnings and it's a real crapshoot
and it's a real just a gamble so can be can be really dangerous and if I was
going to do anything I would be short premium through earnings but once again
that's a risky play it's not a it's not really an intermediate play even it's a
risky play and you really have to be dialed in to your particular issue like
for example Tesla I would never do it no matter what because it's a monster that
can do anything at any time yeah absolutely
so I mean if that worked if buying option premium two weeks before earnings
and then selling it when the the volatility component of the option
premium is at its peak right you know five minutes before the earnings
announcement if that worked I think everybody would do it so it's probably
not as simple as that and as soon as everybody does it it doesn't work
anymore so yeah I've heard that before so and I've heard different timeframes
but yet two weeks fair enough but I definitely would not recommend
buying option premium and definitely not a strangle or straddle because then
you're paying twice as much you know right before an earnings play that's
that's going to be very expensive and then of course it becomes like a flat
tire you know or you're letting the air out of the balloon as soon as the
suspense is gone because when they make the in earnings announcement then it's
not exciting anymore and people are not willing to cough up as much money for
those options very good point and want to talk about since you're one of the
renowned experts on this which is Vicks products yeah since the reverse split in
SVX why okay that that's becoming it and interesting I mean it's it's so is it
just me or is it weird looking at a chart of SV XY and you know seeing it
not at like $13 you know it feels weird but I'm getting used to it all right now
I mentioned or you mentioned in a recent video that you've been staying out of UV
x y and favoring I should say V X X because of the just the volume issues
could you explain that to people yeah well the markets are just really
wide and UV XY right now and they don't have a whole lot of rhyme or reason so
you really have to have your pricing in your mind if you have your pricing down
in your mind and if you have good computer models for options pricing and
valuing then by all means jump in there and don't pay an offer for anything or
hit a bid but put your bids and offers mid market and get in there and it has
it has some opportunities but it's a it's
tough there's not there's a noticeable lack of liquidity right now in you vxy
but as far as the overall short vowel trade in general it is kind of a sleeper
trade right now that will make you money you know contango is back and we've
gotten over five six percent these days and it's quote-unquote a boring trade
but this stuff really is the king the short vowel trade does work and it's
something that can make you money day in and day out if you're disciplined with
it you wait for a little pop you can put on there a short call spread or a long
put spread in a VXX or you vxy and it it will work for you you know we've learned
to have limited risk after the vom again we all have to lick our wounds from that
but it remains a place where there is edge for somebody to get involved and to
make consistent money so and people aren't really talking about it and when
you hear me talking about trades and things what I like to tell people is
just find a way that you yourself can make money maybe it doesn't matter what
anybody else is doing you hear all these ideas on Dave show and all these
different ways different people trade find your own little things that can
make you yourself money and focus in on that stick with that you don't need to
be an expert in like crypto and gold and silver and Fibonacci and RSI and all
this stuff all you need to find is a little spa in the finance world where
you feel comfortable to specialize and that you can make a little money and
just dig in on that by yourself and you're I'm not gonna be able to tell you
what that is for you and neither is David you're gonna have to get out there
and just try some stuff very small and figure it out for yourself because
that's the way that to be successful as a trader is to just try some stuff by
yourself and kind of specialize in your own little thing and because following
anybody else isn't going to work man that's really well said and those types
of insights you're gonna see them every day on David Lincoln's channel so once
again as soon as you're done with this video click on that link in the
description below this video to subscribe to David Lincoln's channel
there also check out is - its profile is Twitter profile links
are gonna be there but most importantly check out his YouTube because that's
where he really has an opportunity to speak to the audience I'm a fan of
YouTube but and videos in general because I can really speak to people
directly whereas with Twitter and stock twits you get those two hundred and
eighty characters it's harder to express myself but I love them - I'm cool with
and and Facebook and all that good stuff are there any people always want stock
picks are there any stocks either long or short that you're looking at right
now that might be a good play well I've traditionally been a terrible
stock picker so I might not be the best one to ask on this but I have been kind
of eyeing Facebook a little bit it's it has had you know tough times with their
second trip to in front of Congress and it's in the I believe it's in the
mid-16th it's a component of almost every passive
trading strategy and every long strategy and so all these funds that invest
people's paychecks every week have to buy Facebook and as soon as the negative
energy and the push downward is not so strong it pretty much has to go back up
and I have a friend who I'm still jealous of who bought it for 40 bucks
he he he basically put his life savings into it invested 250 grand at the $40
level and rode it to here and he's still long it and I think it's it's bound to
continue moving higher but like you you've said this is a long-term game and
you need to you know warren buffett says you know the stock market is the
transfer of wealth from the impatient to the patient and but I go to my business
associates gorilla trades to get a lot of pics because they're better than me
and that's not my forte I know what I'm good at I'm good at options valuation
and by picking stocks is certainly not my forte so I'm probably not the best
person to um what have you heard from other people
about that lately David I need to pick your mind as far as sure where is the
best place to put a thousand bucks right now what would you think yeah I like I
do like Facebook I don't necessarily like the company but I like the stock JD
dot-com which is where people in Asia go shopping online a lot of the time that
you know if you're willing to go there Alibaba I don't want to be Asia centric
but those two China in general the markets down you gotta if US equities
are too high we're not the only nation in the world we can look at you can buy
F X I which is the China ETF if you think China is going to go back up after
this trade war after these trade War tensions finally pass unless you think
the trade war tensions are just gonna last forever but I don't think they will
I think we have world leaders who create conflict and then set themself up to be
the hero by relieving the conflict and it almost happens on a daily basis now
create tension release the tension hey I get to be the hero right
so you can play that you don't even have to look to US equities you can you could
just go straight with the spider's SP y-you can play it that way but if you
want to play other nations you can look to Brazil you know yet to the the ewz
ETF there--but BRZ BRZ yeah yep or IEM e/m is a good one to markets sure Mexico
ww and so yes equities if you're saying there are a little bit overpriced in the
United States you're making a great point you're gonna have to look
elsewhere and that's okay to do that so that that's what I'm looking at right
now I've got a very short watch list until some of my favorite stocks like
Starbucks goes down I'd like to see Home Depot go down it just doesn't want to
okay that's one of my favorites things like that and gold and silver miners
you have the guts to do it if not just just get some SLV the silver ETF get
some IAU which or GLD those are the two most popular gold ETFs and this is a
great time to the gold to silver ratio is in the 80s that's insane
so one play right now is long silver short gold just a thought
but because the gold the silver ratio is normally around 50 right now it's above
80 and it's done that four times since we went off the gold standard in 1971
doesn't that's very interesting yeah I had somebody yeah I had somebody ask me
a question about sov actually today and how to play the options and volatility
is very low in there so in that case you could buy like at the Mike Hall in like
January if you want to play that to the long side and that's a great way to do
it on the cheap so to speak yeah yeah I don't recommend anybody try to sell
options on SLV or anything like that you just you're not gonna get much but it's
a if you want to buy a debit spread great weather whether it's a vertical or
calendar spread or diagonal or whatever it's you know SLV calls are pretty cheap
if you want to go along silver short gold you can just buy you know buy some
calls or call spreads in SLV and then buy some puts or put spreads in IU or
GLD and that way you don't even need silver to go up or precious metals to go
up you just need silver to go up or down less fast compared to gold so that's
that's one thing that I'm looking at right now the opportunities are out
there you gotta find them and and and then bitcoin if you have the guts to do
it some people are waiting for a magic number I remember an interview in which
tone Vaes the cryptocurrency expert predicted that's going to he said it's
definitely going bitcoins definitely going below 5,000 maybe down to 1300 and
then he said it's going to go back up by the end of 2019
I believe he said it's gonna go back up to all-time highs 20,000 I don't know
who knows I'm a seller of that one yeah I mean I don't believe in that one but
I'm a seller of that theory so like you said comes down in the end to our
followers our followers or what what make us you know exist actually in this
reality and it's our followers who really allow us access to all these
people and I'm really just grateful for all that you know there's a few basic
people to just start it with me and it's built from there and I'm really grateful
to all these people who consistently are there every day and some of you I know
your names and others I don't even know your names but I know that you're there
every day and you create us so so thank you so much thank you to the everybody
out there who subscribes to my channel also subscribe to david lincoln's
channel while you're at it his name's David Lincoln and he's killing it in the
markets right now he's up over a gazillion percent so there you go
alright thanks a lot to everybody for watching this whole presentation
subscribe to my channel subscribe to his channel
don't hesitate subscribe to Aaron T Scott's channel subscribe to rich TV
live all that good stuff I'll put links for everybody because this is our
community we're making it happen let me know what you want next on looking at
the markets we're gonna bring this guy back on here and leave comments on Holly
Ollis videos cuz he's putting it out there and you know he's making it happen
he's doing it for you all right David Lincoln thank you so much I appreciate
we'll see you next time on looking at the markets thanks a lot Dave thank you
you
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