Global Energy Crisis and How to Profit: TELL, CLNE, and LNG
Greetings once more, degenerates! Not financial advice, blah blah blah, I'm not liable for your gambling addiction.A couple weeks ago I brought you advice on how to play gamma squeezes and why far OTM options are a bad idea. Please heed that advice if you choose to play these stocks. Options are cheap enough today to really make some money, at the money.
Today I am going to tell you how to profit from the current global energy crisis. If you haven't heard, there is a massive shortage in supply of natural gas, and the spot price is soaring.
I'm not going to bore you with a bunch of technical analysis or shit about earnings, profitability, growth, forward looking statements or any of that shit. No, we're going to grab a global crisis by the balls and squeeze out returns while people in China operate their businesses by candlelight. Yes, that is happening.
This is entirely based on the fact there is a massive increase in the price of natural gas, and we're going to examine option chains to see which of these has the most bullish outlook and highest potential for a run.
TL;DR: Natural gas shortage make gas price go up, buy ATM calls on TELL, CLNE or LEAPs on LNG if you don't have the stomach for risk.
Highest risk, highest reward: CLNE
Medium risk, medium-high reward: TELL (Goldilocks) - this is where most of my money is.
Lowest risk, lowest reward and longterm play: LNG
How to play options: Buy first strike ITM, first strike OTM. October if you're ballsy, November or later if not.
Europe and China are facing a massive energy crisis that is now going global. As a result, the spot price for natural gas is soaring. You guys remember when Sprott's started to corner the market on Uranium a month ago, right? Uranium prices soared and many of you guys made a killing. Let's do it again!
There are many factors affecting the crisis including high demand, supply chain problems (lack of truck drivers to move the liquid natural gas), and LACK OF INVESTMENTS. I know you guys aren't going to start driving trucks of gas across Europe and Asia, so do your part and begin investing. For this reason, I'm not focusing on a single company, but picking three big ones to spread my investments between. CLNE (because clean energy from cow farts is progressive), TELL (Houston based company in massive growth stage, run by the former CEO of LNG), and LNG, a powerhouse in the oil and gas industry. These are not the only companies that will benefit from a rise in natural gas prices. If you have a favorite and a good reason for it, please comment below, I'd love to look into it.
How bad is it? So bad, in fact, the UK has put soldiers on standby to deliver fuel as pumps are running dry. Gas prices are so high that many people are going to be facing cold homes and inflated energy bills this winter. People are LITERALLY fighting over this.
In short, the energy crisis is really, really fucking bad. Many people will be impacted negatively. YOU should try to make some gains in these trying times.
What stocks to play?
As of today, the stock price of TELL is a bit of a discount. The marketwide pullback yesterday affected everything, but energy stocks suffered the least and some saw gains. The continued uncertainty is causing more pullback today, but the demand for natural gas has not diminished.
I personally like TELL because of the low barrier for entry, and the options chain set up is heavily favoring a run as there is absolutely massive open interest on the $4, $4.5, and $5 strike prices. Heavy volume can send this flying, and in fact we can see instances of this in January and June where the stock squeezed upward, running even higher in June than January.
Take a look at the options chain, the number of call options is growing daily with a Put/Call ratio of 0.14! That's 98,869 calls to 14,169 puts. There's two 69's there so you know this stock fucks. Also, their mascot is an owl. Hoot hoot motherfuckers.
I like these guys. A bit of a meme stock, but they're trying to make clean energy from cow farts. I'm not heavily invested, but I really like the option chain set up for 10/15. Massive open interest at the $9 strike has the potential to push this stock up even higher. Much like TELL, this had a nice run in June. The put/call OI ratio of 0.18 isn't as good as TELL, but there are virtually no puts ITM at the moment.
I don't have a lot to say about this stock. Lowest risk of the bunch. These guys are a powerhouse and not going anywhere any time soon. If you want to go long and limit risk, buy some shares or LEAPs and check in later. The options chain for this is not set up for a good run and the put/call ratio is poor at 0.61. I'm not even going to bother posting the barchart info for these options, it's not particularly impressive and I don't recommend buying options unless you go for LEAPs.
Good luck, and be careful out there! The market has been bleeding red the past two days but energy stocks are holding on strong.
And remember, the world is going to need even more natural gas as we approach the end of the year, because: