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APT - Afterpay Limited

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Nice move by APT. Sold Nov $80 Call as it inched to $80.

Remember our intention is now to get rid of the shares. We only acquired this as part of our TP from previous as our put was assigned to allow for covered calls.

The play of the TP was either short put > expired worthless (the ideal situation) OR short put > assignment > covered call > assignment which requires
- margin
- ranging support and resistance
- patience
- discipline
- profit on the covered call to pay the commission from both assignment

Now, the risk of a short put for October vs premium, what can we risk.
- we do not want to risk assignment
- what is the macro market doing
- other competitors/regulations
- ATH at $90

If October is no good, shut that idea and move to the next month. Do not force the play or you will be burnt.

Open to suggestions and feedback...we only know what we know.
 
Don't forget the long $60 Dec Put expiry.

Ideally we need to be out of shares as part of risk management particularly if price is hoovering where it is now.
 
So far price is hovering between $80-85 where previous support was $75.

No puts placed for October yet as the ROI is not good and entry has not been favorable. Do not think this is a waste to not sell a put as we have the insurance of the long $60 Dec P, the unexpected could blow you away.

Lets look now for Nov or Dec PUT. What do we think is happening?

If you prefer some graphs to paint a picture of what is happening please let me know particularly if new to options.
 
I expect the christmas buying season to be absolutely nuts for afterpay.
 
APT very nice run.

For those following the options trade, despite being patient, our legging in was 1 week to early.
Hindsight is the friend that whispers in our ears.s

It is unlikely APT will fall to with the market at the same magnitude. For that reason, lets be assigned and strategize the next trade.

Lets see what happens in midweek.
 
Is it time to short the BNPL sector and it's #1 flag bearer?

From what I read APT needs to build it's customer base substantially more in order to grow its sales book. I've no doubt that APT will increase it's customer base but doubt that it'll do it quickly enough to justify it's current share price.

APT gets its fees from the vendor (4%) and the vendor can't add a BNPL surcharge as it's illegal to do so. Vendors are allowed to charge CC customers a surcharge for using their cards. Will the regulations change to allow vendors to apply a BNPL surcharge? If this happens, will customers continue to use BNPL if the vendor adds 4% BNPL surcharge?

There's concerns about the pace of growth, regulatory risk concerns and then the fickle nature of customers who hate paying more than the list price of an item.

I'm a chartist so should probably stick to that. Comparison chart over the past three months.
APT is holding up much better than the others (Z1P, SZL, SPT). This is probably due to APT's status as #1 BNPL.
The BNPL bulls may think that it's time to buy the others hoping for the catch up. I'm suggesting shorting APT as it may be overbought.

 
It looks as though the BNPL sector, is starting to develop the same issues the credit sector has, people spending money they don't have causing long term debt issues. It wont be long before regulation starts to bring these new players back to the field IMO.

One in five consumers using buy now, pay later miss payments, ASIC says

Australia's corporate watchdog says some consumers are suffering harm from using buy now, pay later, warning one in five consumers are missing payments, allowing six companies it examined to rack up more than $43 million in late payment revenue over one year.
www.abc.net.au
From the article:
Australia's corporate watchdog says some consumers are having to cut back on essentials such as meals because of debt they have racked up from using buy now, pay later, warning one in five consumers are missing payments.
But the Australian Securities and Investments Commission (ASIC) has stopped short of recommending that the sector be regulated in the same way as credit card companies, despite concerns from consumer advocates that it is just another form of credit that allows people to take on too much debt.
Key points:
  • ASIC has stopped short of recommending that buy now, pay later players be regulated in the same way as credit card companies
  • The corporate watching's review into six buy now, pay later players found that some were causing consumers harm
  • The industry is also developing a code of conduct, but consumer advocates have warned that self-regulation does not work
 
Watch this journey and see where the adventure takes us.


1. Long April 88 Put.

2. Waiting for short Dec 90 Put to execute.

If your an options trader, don't be shy. Lets bounce around ideas and rekindle that pioneering flare to fulfill the never ending pot of wisdom.
 
I generally stay away from options but I hold and have no plans to sell.
 
S&P/ASX 20 Index (XIJ) – Effective Prior to the Open on December 21, 2020
Action ... Code ... Company
Addition .. APT .... Afterpay Limited
 
Yeah this one's been great. The other ripper has been xero.
 
Was having a chat with a neighbour, young bloke in his 30's, a few months ago. As we do, got to talk about the market, and he recounted a tale worth repeating.

He was sick of odd jobs and attached Super accounts, the count of piddling paperwork got to 10, and he decided to do something about it. With less than $40K, he combined all his super funds in a SMSF, and did it his way. Bought 2 shares, Mesoblast and APT. So here he is, just under a year down the track, serendipity in his corner all the way, with a healthy SMSF over $600K. Now, the inability to access it for decades (at least 3!) brought the observation, when APT was $95, he thought he might diversify, take some off the table, but hasn't so far. He did sell MSB locking in some profit, but then went into the Adore float ($7, now $5). Which proves you can't win them all.
 
Dona Ferentes said:
With less than $40K, he combined all his super funds in a SMSF, and did it his way. Bought 2 shares, Mesoblast and APT. So here he is, just under a year down the track, serendipity in his corner all the way, with a healthy SMSF over $600K.
Click to expand...

I think he's done pretty well
 
Yeah all that dude needs to do from here is drop it in a index fund & walk away.
 
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