Look, you don’t have to go far to find a lesson in risk and reward—sometimes it’s right under your feet on a paddleboard.
There we were, parked right on the beach, doing the full redneck-riviera setup. Tide's creeping in, my wife's a little nervous, but hey, car’s close, breeze is blowing, and I’m bodyboarding waves on a standup inflatable paddleboard that’s got no rails and a big ol’ handle in the middle that wants to leave a tattoo on your ribs. My son gave it a shot, board dipped, he flopped twice and tapped out. But for me, man, it was a rocket ride. Catch a wave and it’s pure joy…until it’s not.
That’s the thing about riding anything with momentum—surf or stock—it’s thrilling until you’re suddenly too far forward, nose down, and the whole thing tips.
And that brings me to today’s real ride: RGTI, the stock we’re here to talk about…
We’ve talked about this stock for weeks. And today it rips a three standard deviation move. Not the kind of thing that happens in boring land. No, this is the surf zone of Wall Street—where fundamentals take a back seat to fear, greed, and sometimes plain old nonsense.
Let’s be real. RGTI is not a company with the numbers to justify a $4 billion market cap. They brought in $9 million in revenue last year. Stock-based compensation? $14 million. You tell me what kind of business model that is. It’s like selling lemonade for a buck while paying your buddies $5 to hold the sign.
But what keeps it alive? No debt and a market of dreamers willing to fund that dream by buying shares that are being diluted faster than a watered-down soda.
So, what do you do when this thing pops 26% in a day?
Well, here’s where experience helps. You don’t chase. You hedge. You trade smart. Buy call spreads, not the stock. Risk 35 cents instead of $35. Because just like a wave, the RGTI pop looks good—until it doesn't. Nine times this year alone, this stock has broken out of its expected move range. Nine times. That’s not a pattern, that’s a lottery ticket.
We saw 300 million shares trade hands when the float is under that. That’s hot potato territory. You get in, you better have a plan to get out.
And if you’re asking if you can chart this thing? Stop it. This isn’t a blue chip. This isn’t GE. It’s a story. A hope. You’re playing sentiment. Charts don’t mean squat if the valuation is a joke and everyone’s holding a stick of dynamite wondering who lets go last.
Just like that paddleboard—get too far forward, and you're going for a swim. Stay back, manage your weight, and ride the wave as far as it’ll take you. But remember: no wave goes on forever.
Trade safe, enjoy the beach, and keep your eyes on the tide.
By Brandon Chapman, CMT