One of the best ways to invest in an IPO is by not investing in an IPO at all.
That's because investing in IPOs is a coin flip. Some stocks explode higher, like Amazon. Others are IPO duds, as we initially saw with Ferrari.
Now, there's a potential IPO for OpenAI, which could get explosive.
The company has been raising capital from the heavyweights and, in due time, it might look to test its luck on the public markets. In fact, it just confirmed a $110 billion valuation, fueling speculation of an IPO.
As noted by Beincrypto.com, "OpenAI has raised billions in private funding over the past few years. Its most significant backer remains Microsoft, which committed multi-year investments reportedly totaling around $13 billion through structured equity and cloud partnerships. The new funding includes $30 billion from SoftBank, $30 billion from NVIDIA, and $50 billion from Amazon. Additional financial investors are expected to join as the round progresses."
While you can always take your chances with a bet on an IPO, there are easier ways.
One, invest in the First Trust US Equity Opportunities ETF (FPX)
With an expense ratio of 0.61%, the FPX tracks hot IPOs, giving investors access to new stocks during their initial, most crucial days on market. By buying it, not only can you avoid paying gobs of money for IPOs that may or may not work out, but you're also being exposed to multiple hot IPOs at the same time at lesser cost.
The delta and gamma numbers can be expressed into a graph for greater clarity. The delta graph is a result of a gamma graph, however being that these two option Greeks are so interrelated, the focus will be on the delta graph.
The image below shows the delta curve for the put on the left and the call on the right. The X-axis is the stock price raising price to the right, and lowering price to the left. The Y-axis is the delta value. Again, the delta is unable to go above 1.00 (negative for puts) or below .00. The ATM (at-the-money) location is marked, and always has a delta of about .50 (negative for puts).
A Straightforward Approach to Trading Weekly Options
As stated in the Wealth Building with Weekly Options book, the strategy depends on locating liquid, high dollar, fast moving stock candidates. In addition, it is important to be aware of the overall market environment.
The content of this newsletter endeavors to support you and those strategy goals. The newsletter comes out on Wednesday evenings since Thursday is the day of new weekly option listings.
This week: Wednesday's stock market action might have felt a tad dull for observers and investors. Yet behind the mostly drab finishes by key benchmarks, some leaders within various industries showed more exciting and encouraging action.
Outside the stock market, the geopolitical headlines continue to stun the world. Are we headed to World War III? Some think so.
Some financial instruments are highlighting the current drama in the Mideast. Crude oil futures soared again. Natural gas rose even more on the day. Precious metals took a rare backseat to the moves by fossil fuels.
If you missed the Weekend Winners Webinar with Blane Markham, you can still catch the replay below.
During the session, Blane walked through how he performs his weekend market scan to identify potential options opportunities before the trading week begins.
He also shared examples of how the strategy has historically identified momentum setups across stocks showing strong technical patterns.
Watch the replay now. Be one of the first 15 callers and get a $500 credit off either a 2 year or lifetime program PLUS one of Blane's proprietary indicators FREE!
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