SOLD 20K SHARES OF $SPCX FOR A NICE PROFIT GOING INTO FOMC! LET'S TALK

SUMMARY

TJ, host of TJ The Wheel Deal, discusses his recent sale of 20,000 shares of SPCX for a substantial profit, strategically positioning his portfolio ahead of the Federal Open Market Committee (FOMC) meeting. The session covers his trading philosophy, portfolio adjustments, risk management, and live reactions to the FOMC rate hike and its implications for various holdings.

MAIN POINTS

• TJ introduces his new focus on high-tier members and outlines the vision for Wheeler Academy, emphasizing positivity and large-scale financial goals. [1:30]
• TJ reveals he sold his entire 20,000-share position in SPCX at $151 per share, locking in a $390,000 swing trade profit over a $131 cost basis. [6:00]
• He explains the strategic shift from holding SPCX shares to selling $100 strike puts, raising cash and reducing double drawdown risk. [9:02]
• TJ discusses his focus on maintaining buying power, prioritizing cash on hand, and the psychological impact of large positions. [11:00]
• He details the importance of derisking before the FOMC meeting, closing puts, and adding to Micron, while outlining his core and target positions. [13:00]
• TJ evaluates portfolio concentration in Palantir and SPCX, expressing concerns about current valuations and the need for optionality. [15:00]
• He attempts to stream FOMC coverage, discusses technical challenges, and interacts with viewers about market expectations. [18:03]
• Live coverage confirms a 25 basis point Fed rate hike, with market reactions and implications for inflation and economic outlook discussed. [25:00]
• Bond market reactions and yield curve analysis are reviewed, with attention to geopolitical risks and the impact on high-beta stocks. [29:01]
• TJ explains macroeconomic effects of rate hikes, particularly on growth companies versus established firms, and the role of war in inflation. [33:00]
• Guest Isaac joins, and the discussion shifts to personal health, lifestyle changes, and the intersection of politics and trading strategies. [37:00]
• The conversation analyzes SoFi's prospects, the narrative around rate cuts, and the need for SoFi to deliver on its tech platform ambitions. [42:01]
• TJ critiques SoFi's management decisions, including acquisitions and dilution, and sets a long-term price target for the stock. [47:00]
• He shares the personal motivation behind his investment in SoFi and the influence of his son on adopting fintech innovations. [52:00]
• TJ reviews the day's trades, including cleaning up Enphase call ladders and detailing the mechanics of his options strategies. [56:02]
• A breakdown of SPCX trades is provided, highlighting the cumulative profits and the rationale for minimizing drawdown risk. [59:01]
• Live FOMC press conference is streamed, with Powell discussing economic projections, inflation, and the Fed's decision-making process. [1:01:03]
• Powell addresses the impact of rate hikes on lower-income Americans, emphasizing the Fed's dual mandate and the importance of stable prices. [1:14:00]
• TJ buys 5,000 more shares of Enphase, aiming for 100,000 shares, and discusses ongoing portfolio adjustments in response to market volatility. [1:24:01]
• He explains the evolution of his short call ladder strategy, focusing on hedging and managing psychological stress from large positions. [1:32:01]
• TJ outlines contingency plans for managing buying power and potential margin calls, emphasizing proactive risk management. [1:40:01]
• He reflects on the importance of portfolio stability, sticking to proven strategies, and the recent shift in SPCX positioning as a model for future trades. [1:50:01]
• TJ concludes by considering future decisions for Palantir and SoFi, highlighting the need for caution during periods of market euphoria. [1:52:00]

DETAILED ANALYSIS

TJ opens the session by setting the context: it is FOMC day, and he is broadcasting publicly for the first time in a while, having shifted most of his content to a members-only format through Wheeler Academy. This strategic pivot is driven by a desire to focus on serious traders and eliminate distractions from skeptics or those with smaller accounts. The overarching goal is to build a community of like-minded individuals committed to reaching substantial financial milestones, with aspirations to grow the portfolio to $100 million and beyond.

The central event discussed is the sale of 20,000 shares of SPCX (SpaceX), executed at $151 per share, resulting in a realized profit of approximately $390,000 over a $131 cost basis. This move is described as a deliberate derisking ahead of the FOMC meeting, with TJ emphasizing the importance of locking in gains and maintaining portfolio flexibility. The sale increases cash on hand to $5.4 million, raising the portfolio’s buying power to about 55%.

This liquidity is seen as critical for navigating potential market turbulence, particularly given the uncertainty surrounding the Fed’s upcoming decision.

Rather than simply holding cash, TJ redeploys capital by selling $100 strike puts on SPCX, collecting $837,000 in premium. This approach allows him to potentially re-enter the stock at a much lower price, which he considers attractive, while being compensated for the risk. The strategy is framed as a way to avoid the double drawdown risk associated with holding both long shares and cash-secured puts on the same ticker, especially during periods of heightened volatility and rising implied volatility (IV).

By separating his premium-selling activities from his core long positions, TJ aims to optimize risk-adjusted returns and avoid margin call scenarios.

The portfolio’s current composition is detailed: long positions in SoFi, Micron, MSTR, Palantir, and Enphase, with aspirations to add SPCX, Riot, and CleanSpark at favorable prices. TJ notes that while he was previously overweight SPCX and Palantir, concerns about stretched valuations prompted a reduction in exposure. He highlights the importance of owning productive assets, singling out Micron as the most attractive due to its strong earnings and customer pipeline, despite the cyclical nature of the memory market.

Throughout the session, TJ interacts with viewers, troubleshooting technical issues related to streaming FOMC coverage and discussing the broader market environment. He provides a live reaction to the Fed’s 25 basis point rate hike, noting that the decision was widely anticipated and largely priced in by the market. The discussion extends to the implications for inflation, bond yields, and the performance of high-beta stocks.

TJ and his guest, Isaac, analyze the macroeconomic impact of higher rates, particularly on growth-oriented companies versus established, cash-rich firms. They also consider the role of geopolitical events, such as war, in driving inflation and shaping Fed policy.

A significant portion of the conversation is devoted to SoFi, with TJ critiquing management’s execution, particularly the acquisitions of Galileo and Technisys, and the decision to dilute shareholders after assuring adequate funding. He argues that SoFi’s future success hinges on its ability to deliver on its promise of becoming the “AWS of fintech,” and sets a long-term price target of $100 per share by 2032. The analysis is grounded in a realistic assessment of market expectations, the need for rerating as a fintech rather than a traditional bank, and the importance of delivering tangible results from the technology platform.

TJ’s trading philosophy is further illustrated through a detailed breakdown of his options strategies. He explains the mechanics of the short call ladder, designed to hedge downside risk while generating income. This approach is contrasted with traditional hedging via protective puts, which he avoids due to the cost.

Instead, by layering covered calls at increasing strike prices, he creates a structure that offers partial protection against declines while capping upside. The strategy is dynamic, with adjustments made based on market conditions, portfolio concentration, and the evolving risk profile of each position.

Risk management is a recurring theme. TJ emphasizes the importance of maintaining sufficient buying power, modeling potential responses to adverse market moves, and having contingency plans for freeing up capital in the event of a margin call. He demonstrates this by walking through hypothetical scenarios, identifying which positions could be trimmed or closed to restore liquidity.

The proactive approach is likened to digging a well before becoming thirsty, underscoring the need for preparation rather than reaction.

The session also touches on personal motivations and the psychological aspects of trading. TJ shares the influence of his son in embracing fintech innovations and the emotional resonance of SoFi’s “get your money right” tagline, which became particularly meaningful after a personal loss. This narrative adds depth to the investment decisions, connecting financial strategy with life experience and long-term goals.

As the session concludes, TJ reflects on the importance of consistency and specialization in trading. He draws an analogy between running a stable business with a fixed menu and the temptation to chase new opportunities, advocating for mastery of proven strategies over constant experimentation. The recent shift in SPCX positioning—from long shares to premium-selling via puts—is presented as an example of adapting to market conditions while staying true to core principles.

The discussion ends with a forward-looking perspective, considering future decisions for Palantir and SoFi, and reiterating the need for caution during periods of market euphoria.

Overall, the session provides a comprehensive look at advanced options trading, portfolio management, and the interplay between macroeconomic events and individual investment decisions. TJ’s approach combines tactical execution with strategic foresight, balancing risk and reward in pursuit of long-term financial objectives.

LINKS

• Referral link to sign up for Tastytrade, an options trading platform.
• StreamYard referral link offering a $10 discount for new users.

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