MILLIONS Flowing In These 2 Stocks
This is not the usual blog post you might be used to. If you have followed StockedUp for a while, you may have heard Mike talking about insiders buying stocks/options quite a bit. Following insiders can be a great strategy, and quite frankly, more traders should look for trades like these. In this post, we will go over two HUGE trades that have been spotted. The insiders featured in today's post are CEOs of their companies making some huge bets. On top of that, the stocks we will be getting into are low right now compared to highs. Sometimes following insiders can pay off hugely. This is a great article so definitely read through everything!
Docusign’s CEO Buys $2.4 Million in Stock
DocuSign, or ticker $DOCU, is a fantastic example of an insider loading up on a stock that is currently low. Their CEO, Daniel Springer, bought 18,700 shares on January 10th for an average of $128.89/share. This totals over $2.4 Million worth of stock that he just grabbed at a considerable discount. When writing this article, Docusign was trading around $129. This means you can still get into the stock pretty low right now. Look at the end of the post for the best strategies to play these stocks.
You can see how $DOCU has been dipping back down the past few months. Many growth stocks have been declining, and it isn’t necessarily their fundamentals causing this drop. The overall growth sector exploded in 2020 and 2021, as you can see, but is now consolidating a bit.
DocuSign’s Amazing Growth.
Docusign’s stock and company have been growing at a fantastic rate over the past few years. Going back to the chart above, $DOCU ended up moving around 200% in 2020 alone. Of course, covid helped them a bit, but that is still tremendous growth. We can see their revenue really picking up over the past three years on this chart from our new Stock Analysis Dashboard! DocuSign’s google search trends are also rising, indicating that overall they are getting more attention now. They do have some intense competition like Adobe, but they are still doing amazingly well in this market
One of the LARGEST Insider Moves We Have Seen: Asana
A few months ago, $ASAN or Asana was trading around $145, and it is now sitting around $60. Dustin Moskovitz, a co-founder of Facebook, the world’s youngest self-made billionaire, and CEO of Asana, has been buying the dip on this stock in a significant way. In the first 16 days of 2022, Dustin Moskovitz bought $129 Million worth of Asana stock. That’s only this year, and he made even more purchases towards the end of last year! This is a lot of capital flowing into this stock from an insider. He has been buying this dip a lot. Here is a chart from Finviz showing insider trades. We put a red box around some of his insane purchases.
Asana stock is growing at a pretty good pace, similar to DocuSign in a way. Seeing this continued buying activity from such a significant player like Dustin Moskovitz is a real confidence booster. As far as setups go, $ASAN isn’t the BEST by any means. It is on a down-trend right now. It has been falling with a lot of these other growth plays, but keep in mind Dustin is buying shares for the long term. SHORTING puts (not longing them) and buying shares will be the safest ways to play this setup. You can see on the chart below how drastically Asana stock has been dipping. The Implied Volatility (IV) rose higher relative to last summer. The higher IV means options will generally cost more now, making it hard to riskier to buy call options.
Asana stock is growing at a pretty good pace, similar to DocuSign in a way. Seeing this continued buying activity from such a significant player like Dustin Moskovitz is a real confidence booster. As far as setups go, $ASAN isn’t the BEST by any means. It is on a down-trend right now. It has been falling with a lot of these other growth plays, but keep in mind Dustin is buying shares for the long term. SHORTING puts (not longing them) and buying shares will be the safest ways to play this setup. You can see on the chart below how drastically Asana stock has been dipping. The Implied Volatility (IV) rose higher relative to last summer. The higher IV means options will generally cost more now, making it hard to riskier to buy call options.
How To Follow These Insane Trades
When these insiders buy stock, many retail traders instantly think they can get rich following them. In reality, that is not the case, but you can start buying shares or shorting cash-secured puts down here. When you short cash-secured puts, you are bullish on the company. Shares are a great way to play this situation as well. You would not want to buy call options down here on $ASAN or $DOCU. Both have a reasonably high Implied Volatilities. Higher Implied Volatility makes it harder for options to gain value. When shorting cash-secured puts, you want those puts to DROP in value. Even if those puts don’t drop, you usually end up acquiring shares at a super low price, or you just roll over your puts until the stock does pop.
Potential short put (cash secured put) opportunities:
DOCU 3/18/22 125 Puts - Currently at 11.40 - This means you get paid a premium of $1,140. If DOCU stays above 125 at expiration then you keep the premium and run. If DOCU is below $125 at expiration then you have to buy 100 shares at $125 each.
ASAN 3/18/22 50 Puts - Currently at 5.80 - This means you get paid a premium of $580. If ASAN stays above 50 at expiration then you keep the premium and run. If ASAN is below $50 at expiration then you have to buy 100 shares at $50 each.
Shorting puts can be difficult, especially for newer traders. HERE is a quick link to a great video explaining the strategy behind shorting puts.