Issue 8: Twenty More Days Until Insiders Can Sell - Masters in Trading Digest

TWENTY MORE DAYS UNTIL INSIDERS CAN SELL

Welcome to Issue 008 of the Masters in Trading Digest.

In today’s FREE MIT Digest, we discuss the IPO Lock-Up trade.

In preparing for our Monday member-only options class I came across a few good candidates for Lock-Up trades to share with members. After getting our Week Ahead trades prepped for the community, I felt it prudent to explain to all subscribers of our Digest – what is a Lock-Up trade?

What is an IPO Lock-Up?

“An initial public offering (IPO) lock-up period is a caveat outlining a period of time after a company has gone public when major shareholders are prohibited from selling their shares. During the IPO lock-up company insiders and early investors cannot sell their shares, helping to ensure an orderly IPO and not flood the market with additional shares for sale.

Lock-up periods usually last between 90 to 180 days. Once the lock-up period ends, most trading restrictions are removed.”  – Investopedia

To summarize – the IPO Lock-Up makes sure insiders can’t dump shares on the market as stock rallies after it's IPO.

Once in a while, a stock will rally right into it's Lock-UP, and as insiders are allowed you’ll see the underlying stock immediately trade down.

Good investing,

Jonathan

$GLBE Lock-Up Trade Explained

Over in our Insights, I shared a post a short while ago about Options Trade Strategy and the $GLBE Lock-Up Trade. I was recently thinking about this and I wanted to make sure that if you hadn't already to head over and check it out once you're done reading this issue of the digest. There is also a video you can watch as well! Enjoy.

HEARD IN OUR MEMBER DISCORD

Excellent conversation in our Bond discord the other day –

Here you can see Jose working with Steve Williams discussing Bond correlations, Bond Butterflies, and various spreads along the yield curve.

The foundation of Futures Trading at Masters in Trading is taught through Bond Futures.  

Once traders learn our approach to Bond Futures, learning the other asset classes becomes a breeze.

IMPORTANT OPTIONS EDUCATION

When an options position moves in your favor what should you do?

If you cover positions too early, you risk missing out on HUGE profits.

Missing the big move is almost as frustrating as having a losing trade.

Has this happened to you?  It certainly has happened to me.

This video will teach why you should NEVER give up your optionality.

3 Ways to Manage an Options Contract

  1.  Cover Your Options Position
  2. Turn Your Options Position into a Spread
  3. Scalp Gamma

FINAL THOUGHTS

WHAT TO EXPECT IN THE NEXT MIT DIGEST

The next issue of the MIT Digest will be released Wednesday, January 5th, 2022.

Here’s what we’re following:

  • U.S Covid cases continue to skyrocket.
  • College, universities switch to online classes starting the new semester.
  • Which industries will feel an immediate impact?

Keep your feedback coming into support@mastersintrading.com.  We’re excited to share your feedback along with fantastic suggestions for upcoming issues.

Until Wednesday, trade smart and always manage your tail-risk.

I hope you had a wonderful holiday season.

Thanks for reading,
Jonathan Rose

 

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Masters in Trading Digest - Issue 8

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