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Here’s why SOFI selling to continue for next 1-3 weeks and how I’m trading it

***My positions are at the bottom for full transparency and this is just my personal opinion.***

Selling pressure is going to continue for the next few weeks because so many shares became unlocked. But here’s why – and I know from experience:

When insider shares become unlocked, typically an insider (employee or executives etc.) overnight now has so much of their net worth tied up in these shares that even if they believe in the company long term, it’s irresponsible to have that much of your net worth tied up in one single company. So they sell to diversify. All the financial consultants that these employees hire to navigate this new wealth and taxes tell them this.

So no matter what, a lot of insiders sell a lot of their shares because it’s the responsible thing to do when your net worth grows 2x-20x overnight – or so says the industry.

I know institutions will be cautious and wait for a little bit for the bulk of the insider selling to subside and this also makes a lot of sense.

I have one family member that went through this process and I have another family member starting to navigate this same process. They had a lot of stock options at a large tech company and when they went public, as soon as the shares became unlocked, they and almost all of their friends at the company sold a lot to diversify their wealth over the next 1-2 months. They did keep good sized positions though.

Selling will subside over the next few weeks and when that bottom comes, buying will resume, hopefully by institutions. Hopefully by ARKF too!

There are also next quarter earnings coming out around September as well. If those earnings look anything like the June earnings, watch out because this will fly.

I’ve been loading up a lot lately and here’s where I’m at:

* 150 $50 2023 LEAP options for the long-term and I’ll keep buying these under $18.5.
* 3500 shares that I’m selling far out of the money calls on b/c IV is so high
* Selling puts on 7,000 shares that if assigned I’ll turn around and sell very tight to the money calls on b/c IV is so high

How are you all handling the SOFI dip?

What do you think?

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28 Comments

  1. I guess I’m an investor now. My bag has blossomed into $40k in losses. 10,000 @ $21.02, no margin. Time to turn off my phone and enjoy the Summer and see what happens in the Fall.

  2. I like it and I’m going to continue “dollar cost averaging” till my position looks good on paper. I think it’s a $25 stock by October. Great growth and a lot of the customers are pretty hardcore fans (check the FB groups for example). Galileo is their secret leg up and whenever the bank merger goes through they’ll be even more competitive with their services.

    I use SoFi to buy SoFi because I heard I like SoFi.
    But seriously it’s a cool app as long as you’re not looking for options trading (yet). I like having my money all in one place and anyone I’ve shown it to likes it as well.

    Just my personal opinion but I like the stock.

  3. Like a sheep with blinders on, I completely bought into the sofi hype a few weeks ago. I’m now way down and I know deep down I deserve it for being such an idiot. But I’m guessing at some point it will again rise above my break-even point.

  4. I’m just buying more shares to lower my average position. I got in at $22ish and have watched it tank since then. But market analysts (and common ape sense) show this being worth $25-30. I’ll keep buying low (same with CLNE) to lower my position every month it continues to tank and then just bag hold. This stock is bound to go back up eventually.

  5. I’m just buying shares in little batches and playing swings with calls. I had sold puts, but I won’t do that again until we are back up around $22.50 because I’m getting assigned on some.

  6. Thanks for that insight OP! It has been bewildering to watch this beauty just slide sideways and gently downhill for the last couple of weeks. Your explanation really sounds like a solid sum up of what (most likely) is happening. I’m excited for the bank charter becoming official too

  7. How the hell are you selling covered calls when the stock has been dropping for 8 days in a row lol. Even the $20 calls are worth 0.1. What exactly are you selling?

  8. I have a couple hundred shares currently. My thinking is that I actually want to get assigned on the puts I sold to increase my exposure during this dip.

    Debating buying LEAPS but wondering if i should just buy more shares instead. Thoughts?

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