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SOS Limited: Elevated Short Interest, High Volatility Bring Opportunity

Apr. 09, 2021 6:36 PM ETSOS Limited (SOS)36 Comments
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SOS Limited (NYSE:NYSE:SOS) came to our attention in recent months due to the clear change in its volume trends. SOS traditionally provides emergency assistance services for its clients in distinct categories such as roadside, health and residential. As we can see from the


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Analyst’s Disclosure: I/we have no positions in any stocks mentioned, but may initiate a long position in SOS over the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

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Comments (36)

Just checking on whether the bullying to buy this scam stock is still on.
With company so unpredictable and potentially a fraud why would you be suggesting to even trade this at all. Slight error and you are busted
@WebPsycho very curious to know why you think this company is a fraud?
@Em_kay I have got it verified by a friend in China. It’s a small two room call center company which is just riding the Bitcoin hype. I have a counter question what makes you believe it is a legit company. How do you validate the claims they do in 99 cent PR news.
Individual Trader profile picture
@WebPsycho you are never busted if you control your risk at order entry. The key is in staying small
Sold 6.5 Put Apr 16 @1.54
Think it will be assigned. i am okay for that.
Good stock to play both ways, and your strategy has a lot of upside, I just don't think it's the best.

I'd be more in favor of buying a spread than a synthetic long. You can buy a call spread right now that would be huge returns closing at max profit and cost less in collateral/margin if you're retail. This actually has pretty low beta with bitcoin, but I also don't really like selling the near put and buying the long call. I think BTC channel break, not calling the direction, is pretty much impending. If you don't think so, maybe just play calendar spread, which profits from the iv decay a lot.
Individual Trader profile picture
@ZeroSome Very interesting. A lot of validity to your strategy
Very interesting article! What do you mean by volatility erosion?

"we (being mindful of volatility erosion) could immediately roll out the position either down and/or out in time to reduce our cost-basis"
@mendo The stock is hot right now, increasing the implied volatility of options. That is, premiums are high, the % change to make profit at expiration is large. It makes it better to be a seller than a buyer, but you would also be taking on high risk since this moves pretty regularly by 20% or so in a single day. He expects the implied volatility to decrease over time. This is pretty likely, as stocks don't stay hot forever. People are fickle, it will regress towards median values over a long time, making options you purchased less valuable but also the options you sold.
Individual Trader profile picture
@mendo Defense becomes much harder when IV contracts because it becomes difficult to roll for a credit. The one big variable is this which is why IV should be watched carefully at all times, in each cycle, etc
mterra profile picture
I like SOS. If all they're saying is true, then it'll be the largest BC miner. Another thing, Bloomberg et al is saying the Chinese government, our friends CCP, is supportive of BC. SOS is clean green with hydro power, and respectable Americans on the board. So, I'm in for the long haul, and hoping to do well.
Individual Trader profile picture
@mterra Hope it works out for you. You may be right. Market likes what it sees at present
Post Hoc Analytics profile picture
@mterra I hate to break this to you, but even IF all they're saying is true they're 7th (out of 8) in hash rate among the listed miners I follow and by EOY will be a distant distant 8th.
$SOS.Feeling a Huge Squeeze is coming
ActivMGMT profile picture
@TheeSoluution Fast forward a few weeks. Now i see the squeeze sir. Hope your holding.
“Sos is a pump and dump” “trash china stock” “its a scam” “they are not real” “trash” “they have class action lawsuits” ... I cant wait to call out all the people that made these naive comments about SOS. I’ve been in this stock way before the hype and knew it would increase in value regardless. SOS deserves to be higher than RIOT and MARA combine. 🖕🏼Hindenburg.
Bull & Bear Trading profile picture
Thanks for the excellent article.

Long SOS!
Individual Trader profile picture
@Bull & Bear Trading What is your upside target here?
Bull & Bear Trading profile picture
@Individual Trader
Using forward Price/Sales ratio. About $1.10 revenues per share. Zero debt. 400% revenue growth in 2021. Profitable in 2019 and 2020.

This market can assign a P/S of 70 by the end of year. $$77 price target by eoy '21
mrmedusa profile picture
SOS has weekly options, so a call is less likely to be called with the shorter time frame.
GordongekkoCrypto profile picture
Interesting article. Well written. How to reduce risk and potentially get a high reward without being completely exposed.
Individual Trader profile picture
@GordongekkoCrypto Strong upside potential but limited dfownside risk. The current IV, strong options liquidity and low-priced nature of the shares faciltate taking some risk in here
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