When Will BNGO Reverse? A Look Into S&D For NASDAQ:BNGO By Braydenboyko


NASDAQ:BNGO

Hey all, quick article immediately in regards to the play of Supply and Demand on BNGO . My present positions as at all times can be listed on the backside of the web page.

The legal guidelines of Supply and Demand recommend that the 2 are inversely associated, When provide will increase demand decreases and vice versa. When taking a look at BNGO we’ve seen a gentle decline in value during the last eight or so months. The attention-grabbing half to me is the truth that traders have purchased way over promoting on this decline. How can the worth of one thing proceed to say no at the same time as folks purchase it. If traders started promoting out of the inventory closely, and persistently, a drop in value could be to anticipated, as the availability of sellers far out matches the patrons. However within the case of BNGO The availability of sellers continues to be beneath that of the demand of the patrons. We should perceive that the inventory market is much extra advanced than simply the legal guidelines of supply and demand , however these legal guidelines tie closely into human nature. Can we calculate for after we will hit an equilibrium? Sure:

In response to the equilibrium value system, whereas utilizing the present value and volume as our demand curve, and the common value and volume because the begin of the decline. The output of these calculations is as follows:

Demand curve: P = 3.85 – 6,470,000 Q

Provide Curve: P = 5.79 + 9,447,878 Q

Equilibrium Value: 4.64

This means we’re at the moment beneath purchased, often known as being within the “Provide Scarcity” Zone. Because of this quickly sufficient there can be far to little shares to purchase and no sufficient sellers, and the one approach to pull again to the equilibrium value is to lift the worth of the shares. All of this considers that the demand for BNGO will proceed to rise, if the demand for BNGO had been to show damaging, this value wouldn’t be correct.

So what do you consider a 4.64 value goal? Does it align along with your quick time period ideas on the place this value will go?

(The S&D graph is displayed in blue on the chart)

Present Positions In BNGO:

Inventory positions @5.97

Inventory Positions @4.00

Brief Name choices @1.21 for a strike of $5, for 21-01-2022.

Lengthy Put choices @0.22 for a strike of $4, for 17-12-2021. That is to hedge towards quick time period draw back misplaced.

Lengthy Put Choices @0. 05 for a strike of $2, for 21-01-2022. to guard towards a serious free fall in value.

Brief Name choices @0.21 for a strike of $6, for 21-01-2022. That is my most up-to-date addition to proceed producing revenue on my lengthy position- and to assist pay for the continuation of buying put choices towards a free fall.

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