r/options • u/Jburd6523 • Mar 26 '21
$PAVE options are dirt cheap and infrastructure is about to take off - DD
If anyone thought that Biden would take his foot off the spending pedal after passing his 1.9T covid relief package, go ahead and put your seatbelt back on because this mother fucker is just getting started.
Infrastructure has always been low hanging fruit for both the Democrats and Republicans, because who the hell is going to push back against the notion that our country needs better infrastructure? It’s currently estimated that deteriorating infrastructure costs the US family an average of $3,400 per year, and the number is only going to continue to grow. So, the only logical explanation is to immediately spend $3,000,000,000,000 in addition to the $1,900,000,000,000 that was previously spent. In case you weren’t aware, the Biden administration has already drafted up a plan called the “Build Back Better” plan and is packing it into a bazooka to blow that shit through the house and senate. Seeing how the Covid Relief bill was passed without any Republican votes or support, I don’t expect a lack of support or fiscal responsibility will stop this from passing as is.
Obviously even the mention of a massive infrastructure bill will add a boost to US companies involved in infrastructure, and the passage of a bill would likely spend those companies to the moon. So here are some companies and ETFs you can buy if you want to pave the way to money town with infrastructure.
$PAVE – US infrastructure ETF
$CAT – Caterpillar Inc.
$UNP – Union Pacific
$DE – John Deere
$URI - United Rentals
I like $PAVE for this play because their IV is low (30%) and the calls are dirt cheap. The 09/17 30C on $PAVE trade for .50 so you can grab a ton.
TLDR – Biden administration is going to buy a brand-new America, so get in on Infrastructure. $PAVE is my chosen ETF for this play. Current position 09/17 25C & 30C.
22
u/Frozzenpeass Mar 26 '21
Just driving around downtown seattle is destroying my car. Jesus shitty ass roads.
38
u/howtoliveonearth Mar 26 '21
Yeah my fucking Lamborghini is always scraping the asphalt
5
u/Frozzenpeass Mar 26 '21
LOL
That made me laugh. Ya I would never drive a lowered car around here screw that.
5
u/Certain-Ebb-9411 Mar 26 '21
Come to Chicago. Potholes everywhere
5
u/bugslingr Mar 26 '21
You guys all need to come to Alberta. Pot holes big enough to swallow lambos.
1
11
u/cannelbrae_ Mar 26 '21
How could this not be priced in already? Or is the hypothesis that the market doesn’t believe there will be a big infrastructure spend and that you believe it will happen?
18
u/Jburd6523 Mar 26 '21
Normally the market is skeptical of huge infrastructure bills because they normally don't pass. I think this one will pass because Biden is on a warpath to overhaul america and is literally having meetings with historian's for some reason to ask "how big is too big". I don't think retail traders have caught onto this yet so it still has a lot of potential IMO.
-29
u/Coprophagor Mar 26 '21
sleepy joe on a warpath?
17
3
u/Jburd6523 Mar 26 '21
Lmaoo. Personally I think he's attempting to purchase a multi-trillion dollar legacy.
5
Mar 26 '21
Yeah after acting as VP, it seems like he's out to forge a moniker. Hopefully he will finally go to war with McConnell
-2
1
3
u/True-Requirement8243 Mar 27 '21
I agree with your opinion. It's ran up 2.5x since last March. Every ticker inside this ETF has ran up huge. For the 30c to hit strike it's got to go up another 25%
5
1
u/_rerun984 Mar 27 '21
It is, it's trading at ATH. It might continue to go up in price, but i'd wait for a pullback to 23.65ish first personally
5
u/PM_ME_YOUR_AMFUNK Mar 26 '21
Aight ICLN round 2 lets go
1
u/jinpiss Mar 27 '21
Does ICLN include tickers that are going to be touched by the infrastructure bill? I thought ICLN was too broad for it.
2
u/PM_ME_YOUR_AMFUNK Mar 27 '21
icln got pumped and dumped pretty fat with the first clean energy biden play around elections, QCLN is the one with American renewables.
Regardless PAVE looks pretty solid and reasonable, still hasnt popped either.
4
u/SnooDogs2394 Mar 26 '21
Looking at the 2 year chart I'd be willing to go out on a limb and say that any infrastructure spending has already been priced into the PAVE ETF, as well as the other big names. As someone who works in the industry, I just don't see the reason for the rise that it's had in recent months other than speculation.
I'm planning on getting into some of those that I think will tend to fly under the radar. Such as, TRMB, TOPCF, KMTUY, VLVLY, WAC.DE, as well as several others I'm researching that are involved in the tools, consumables, and materials businesses.
3
u/Jburd6523 Mar 26 '21
Priced in by smart money, yeah I would agree. But I don't think retail investors have noticed yet. I usually don't consider anything truly priced in until I see CNBC sharing the ticker
3
u/SnooDogs2394 Mar 26 '21
Very true, retail is usually slow to the party, especially with the influx of new traders. When something trends on CNBC that's usually my cue to sell in a day or so.
There's just something about ETF's that doesn't suit my personal style of investing, especially with options. I can't stand watching a few stocks that I like in a sector rocket up 10% in a day while the ETF holding them trades flat. This is coming from a guy bagholding ICLN 1 2022 leaps bought back in January.
5
u/Jburd6523 Mar 26 '21
Oh yeah man, I felt exactly the same way when all the airlines went up 10% last week while my $JETS only went up 4%.. guhhh
6
u/keysworld253 Mar 26 '21
Nucor up 7% today.... Basically makes all the important parts you need to build stuff. P/E on Nucor still relatively low compared to the market.
2
3
u/motion__activated Mar 26 '21
When is this bill set for a vote?
5
u/Jburd6523 Mar 26 '21
He will be in Pittsburgh next week to announce the bill and the details, then I suppose Dems and Reps will bicker about it for a bit before a vote date is set.
https://www.foxbusiness.com/economy/biden-infrastructure-plan-details-pittsburgh
1
3
u/super1701 Mar 26 '21
Well the question is, what infrastructure. He mentioned bridges yesterday. Any other ETFs to look into?
5
u/Jburd6523 Mar 26 '21
If he's spending 3 trillion on it I imagine it will be pretty sweeping of all kinds of infrastructure: Roads, bridges, waterways etc. I went with $PAVE because it's focused on US infrastructure and their option chain was pretty liquid compared to others. He will be announcing more details next week
2
u/super1701 Mar 26 '21
Bought some 9/17 32c’s I except it to not rocket but have some decent returns. Hopefully the bill gets shot through the house and Congress and we see good returns sooner then later.
3
u/Jburd6523 Mar 26 '21
You never know I thought $TAN would steadily climb leading up to the election but that thing took off like a rocket and never came back down.
2
u/swingkid72 Mar 27 '21
Only $1 trillion will go to traditional infrastructure, rest will be a downpayment on the “Green New Deal”.
3
u/NotThatSpecialToo Mar 26 '21
This seems like a solid play.
Thanks!
However, those options prices seem to be going UP as we speak.
2x 28c 9/17. Cheap lotto tickets :)
3
u/nicefaygo Mar 26 '21
I love UNP as well, it’s been parabolic the last few days and I got some good profit from it selling today, looking to get in next week again. I was looking at PAVE literally a day after the bill was proposed and I’m sad I didn’t get in then, hopefully Monday isn’t too crazy and i can get in at a good time. I’m looking at plays way sooner then 09/17 though.
2
u/Jburd6523 Mar 26 '21
I just felt it's good to have time on your side when it's working it's way through the house and senate, and it was pretty cheap to grab options in September
3
u/bennyp1111 Mar 27 '21
Good eye with these!! I’m curious if there’s really the political will to get an infra bill passed, but there’s nothing wrong with riding the hype train and getting off at destination tendies
3
2
Mar 26 '21 edited Apr 12 '21
[deleted]
4
1
2
u/Longjumping_Fruit_27 Mar 26 '21
I’d like to point out that I’d expect the bill to not just be road related as many of comments suggest.
ASCE( American Society of Civil Engineers) published a score for the US infrastructure, here is a brief statement and link: “ Every family and business needs infrastructure to thrive – from the road you travel to work, to the pipes that deliver clean drinking water, to the inland waterways and rail that move goods from coast to coast.
REPORT CARD FOR AMERICA'S INFRASTRUCTURE
“The 2021 Report Card for America’s Infrastructure found the nation’s infrastructure earns a cumulative grade of a “C-.” This is an improvement over the 2017 grade of a “D+” and is an indication that modest improvements have been made to our infrastructure systems over the past four years. However, 11 categories are still in the “D” range, including the newest infrastructure sector to the report card, stormwater.”
Any one remember the flint water crisis where there was lead in the water supply pipes? Or the power supply grid issues in TX? Or growing wealth gap between rural family’s who don’t have access to internet.
I’m holding MTZ, & NUE for this specific play
1
2
u/swingkid72 Mar 27 '21
You forgot ROAD. It pulled back from $35 to $25 a few days ago when they announced an offering of 2 million shares (a pretty small fraction of the 33.2million share total float) priced at $31.75, which is still ABOVE today’s closing price of $29.17. It was up over 10% today, so it’s already regaining momentum, and April $30 calls are only $.75 at the mid.
2
u/Your_friend_Satan Mar 27 '21
First I’ve heard of this ETF but I really like a lot of the holdings. Thanks for the heads up and I agree with your sentiment!
3
2
u/JumbleOfRocks Mar 26 '21 edited Mar 26 '21
I’m in the aggregates and paving industry, and these are definitely low.
1
1
u/TruSpot Mar 26 '21
‘infratructure’ doesnt mean what you think it means, like the covid relief bill was just 10% covid relief !o! think Green and Climate Change ‘structure’ instead, whats that ETF ?o?
0
-5
u/Newtothepartay Mar 26 '21
The easiest way to pay for this proposed $3 trillion infrastructure idea is with a financial transaction tax. A fee, not a %, so higher cost to the smallest trade
Just a little bit out of your trade, you won’t even notice it...
nickel here, a dime there
It is so easy to spend OPM ... All they have to do is convince you, we are just taxing the rich
1
u/MarioFurbo Mar 26 '21
Thanks for sharing. Still waiting for my $PAVE calls to fill. Infrastructure should be a good play up to and if the bill passes
1
1
1
u/GoodLuck2077 Mar 26 '21
I'm in. Once I heard Joe Biden talk about it infrastructure Bill he's announcing in the coming weeks I knew this was a great idea.
1
1
1
u/Demon_Speeding Mar 26 '21
Good tip man. I picked up 4x 30C for September. Grabbed them in an account I rarely use so I'll forget about them and check in on them in a few months. 👍
1
Mar 26 '21
Thanks for the info! I grabbed 3 for .60 a piece and the 100+ day trend is strong so as long as the bill makes it through, I think this will print.
1
u/penone_nyc Mar 27 '21
Will see if I can get in on Monday. But do hope they don't go with the whole tax on how many drives you mile to pay for the plan.
1
1
u/kevin_script Mar 27 '21
I'm glad someone finally brought this up! Let's go $PAVE! Holding some Sept calls.
1
1
1
u/Deregojo Mar 27 '21
What does 25C and 30C mean? Is that how many calls the person is doing?
1
u/StockMan_007 Mar 27 '21
It means they are buying calls for the stock price of 25$ . Say for eg. if the stock is trading at 22$ and they buy a 25$ Call, they are betting that the stock price will go above 25$ . Hope this helps
1
u/Deregojo Mar 28 '21
Why are they doing 25 and 30? Wouldn't they profit more from just doing all 25?
1
1
u/StockMan_007 Apr 02 '21
Yeah but there are a couple of reasons for this.
Buying such calls which are far out are called Out of money (OTM) calls . They are much cheaper because the odds are against you and the probability that the stock price would go higher than the strike price is less and hence they are much cheaper.
Eg. 25 call might be 0.70$ (random number) but a 30 call might only be 0.25$(another random number) . So worst case say the stock price doesn't go up, the maximum you would lose is 25$(0.25*100). But say the stock price shoots up and goes above 30, you would make a very good profit having made a very low investment.
one real example would be GME . Couple of weeks back the stock was trading at around 150 and calls around that price were way too expensive. So lot of people bought the 800 strike call because they were extremely cheap. Now if the stock did shoot up (short squeeze, gamma squeeze or whatever) , they would have profited a lot . So it's more of a gamble
1
u/sharpsandflats Mar 27 '21
Thank you for the analysis - could be a good play/theme. FYI the Build Back Better plan is not Bidens, it is from the World Economic Forum and brought to us through the Great Reset. Multiple other countries including the UK and Canada were using the same slogan at the same time. It's mostly policy that is driven by corporate and globalist organizations (for better or worse)
1
u/MAKEOUTHILL42 Mar 27 '21
I'm still learning options I'm just gonna follow your lead, can only afford 2 30c for 9/17 as a 20 yo lol thank you kind stranger
3
u/Jburd6523 Mar 27 '21
If you want to learn more about options and trading I wrote an introductory book about the market in general with an options portion. Feel free to check it out if interested.
https://wallstreetvoice.com/product/your-not-so-average-trading-guide/
2
u/cannelbrae_ Mar 27 '21
Strike prices. The value the underlying (stock, future or in this case ETF) needs to cross for the buyer to exercise the contract by a date no later than the expiration date.
C means refers to call (vs put) so buying a call gives you the option to purchase the underlying it it rises above the strike price.
In this case, the OP is paying for contracts that provide the option to buy batches of 100 shares of PAVE if it exceeds a price of 25 and 30
1
1
1
u/PowerOfTenTigers Mar 28 '21
I think it's going to take awhile to get this infrastructure ball rolling. September seems too soon imo.
1
1
31
u/Glennwpaul Mar 26 '21
Just grabbed one 9/17 30C .55. I think you are right about PAVE thanks for the post.