STONECO: Brazil's Fintech Fiesta (UPDATE)

Rolling Into The Next Phase.

Executive Summary

• Rolling the trade and stretching the call.

• Moving into a lower and later dated strike reduces sensitivity to immediate pullbacks.

• Total capital at risk remains the same.

1. Recap Situation

We tried to tame the Brazilian jungle with a long wide strangle, but we soon realized that we had chosen a maturity date that required StoneCo to move faster than it wanted. We could have allowed more time to breathe. We experienced a gradual decline in the stock price that, at one point, ate up more than half of our option premium while our long put position provided minimal protection.

It's perfectly ok to experience temporary drawdowns; they remind us of our humanity and make us feel alive. Thanks to Curupira, a Brazilian forest god symbolizing resilience and perseverance, we've found the strength to overcome those drawdowns. We are optimistic about the future and remain confident that good times are still ahead for StoneCo.

von Randow, J. (2023, August 1).

Whatever, von Randow, cut t…