Ok here is the extended thread on $XL I promised.

It is pretty straight forward.

For those that are new to stocks / options (because of the influx of interest due to $GME, $AMC, $SLV, etc), here are some terms you should google:
-Short Interest
-Call option
-Open Interest

/1

XL Fleet short interest increased from 50% to 72% in the latest reporting (came out Friday)

That alone piqued my curiosity in the company so I took a position in some Feb calls (in my robinhood account) and will be adding more in my TD account this coming week.

/2
Several days ago, Biden announced that he would be replacing the entire govt. fleet with electric vehicles
https://t.co/DNNMOwq6dv

$WKHS got a massive pump on this news but that was about it.

Who are the other likely candidates? $GOEV and $XL
Why is $XL one of the top candidates?
-Partnerships with Coke and Pepsi
-Board of Director members have strong ties with UPS and FedEx
-Management team is very connected in govt. associations for clean energy in wind, solar, and EV
- $XL is focused on transforming existing FLEETS
All of this can be found on their website

https://t.co/asiC2Gd0om
Next up, is Open Interest and float. Remember, $XL Fleet only has 8.25M shares of public float. Of that, 8.6% are institutionally owned (i.e. not going to be sold anytime soon)

That means there are roughly 7.6M shares of true float available.
At 7.6M shares, it only takes 76,000 call option contracts that are in the money (the strike is less below the current trading price) to lock up the ENTIRE FLOAT. This is very similar to what happened to $GME
So here is a quick table I put together so you can quickly see the Open Interest for call options on $XL
Notice how the OI spikes MASSIVELY on the C25 and C30, with a decent bit at C20 and C22.5

There are already nearly 40,000 contracts that are In The Money. Locking up 4M shares.

Total, there are over 144k option contracts that have been sold.
The crux of this comes when $XL hits $25/share. At that point, the contracts that are in the money lock up the ENTIRE FLOAT of $XL.

And that isn't including new contracts that will be purchased on hype as it moves back up.

If this hits $25, it quickly moves over $40 . . .
As shorts cover and new buyers enter the market.

All this needs is a catalyst. And with how clean energy friendly the new Biden Administration is . . . well, that seems like a likely catalyst to me.

I am already in Feb/March calls. Will be adding to position next week.

More from Trading

Many of you have seen the famous Westrum Organizational Typology model, so prominently featured in State of DevOps Research, Accelerate, DevOps Handbook, etc.

This model was created Dr. Ron Westrum, a widely-cited sociologist who studied the impact of culture on safety


Thanks to Dr. @nicolefv, I was able to interview him for an upcoming episode of the Idealcast! 🤯

It was a very heady experience, and while preparing to interview him, I was startled to discover how much work he's done in healthcare, aviation, spaceflight, but also innovation.

I've read 4+ of his papers, so I thought I was familiar with his work. (Here's one paper:
https://t.co/7X00O67VgS)

I was startled to learn he has also studied in depth what enables innovation. He wrote a wonderful book "Sidewinder: Creative Missile Development at China Lake"


Dr. Westrum writes about China Lake Research Labs: "its design and structure had one purpose: to foster technical creativity. It did; China Lake operated far outside the normal envelope... Sidewinder & others were "impossible" accomplishments,

I love this book because it describes traits of organizations that routinely create and maintain greatness: US space program (Mercury, Gemini, Apollo), US Naval Reactors, Toyota, Team of Teams, Tesla, the tech giants (Amazon, Google, Netflix, Google)

You May Also Like