Friday, December 16, 2022

♟ He Made $16,000 in Two Days This Week!!

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Options. Short Strangle

"A strangle allows you to play both sides of a trade, with the expectation that the total gain will outweigh your initial investment."

Karim Rahemtulla, Head Fundamental Tactician, Monument Traders Alliance

Karim Rahemtulla

Last week in Trade of the Day, I wrote about how you should play the upcoming economic news. There wasn't just one event I had in mind - there were three!

The first was the producer price index report last Friday. It came in lighter than expected, and stocks took off. Next was the CPI report on Tuesday. It came in light too, and stocks took off some more. Then came the biggie, the Fed announcement on interest rates on Wednesday, after which the market sold off some before tanking yesterday.

If you made a directional play - and guessed right - you could have made a ton.

But if you did a strangle, playing the flurry of news both ways, you would have cleaned up first on your calls and then on your puts.

A strangle allows you to play both sides of a trade, with the expectation that the total gain will outweigh your initial investment.

My advice was to play the puts and calls on the Invesco QQQ Trust (QQQ) or the SPDR S&P 500 ETF (SPY), 5 points out of the money. Well, both moved well over 10 points in each direction, giving you ample opportunity to cash in.

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Here's just a sampling of how War Room members did playing these moves last week:

"Thank you, Karim, for the QQQ strangle(s). Played successfully several times."

- Fabrice K.

"I played with this and added a SP STO DEC $291 PUTS & record - $2.42, lowering my cost to $5.34. I then called the LC for $8.24 for a gain of $2.90 (37% gain on the original strangle). Now left with a BULL PUT and a credit."

- Thom

Perhaps the biggest winner was SAINT, one of our War Room Coaches, who has been calling the market direction with precision:

"I'M BACK: How do you like those puts now! I'm UP $16,000 today (one trading day)! Why didn't I do like some of you smart warriors and buy some more at the peak just 2 days ago?? New chart coming up! All went well in Baton Rouge!" (Starting stake: $23,934.73. Holding time: three weeks.)

- SAINT

Now that's a nice chunk of change!

And it's also a perfect example of how you can play volatile markets to your advantage.

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YOUR ACTION PLAN

The market and the Fed are not done with volatility yet. 2023 could prove to be even MORE volatile than 2022. And there's only one place to get the best information and trade ideas in REAL TIME... I invite you to join The War Room. We have a 77% win rate in 2022, and right now we're guaranteeing members will receive 252 winning trades in their first 12 months of membership.

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FUN FACT FRIDAY

The size of the average U.S. car loan continues to break records. Post-pandemic supply squeezes have been the main culprit. But don't discount the impact of low-rate loans. Car dealers were able to offer insane deals when interest rates were at practically zero. Now the tune is changing. Supply chains issues are easing, and rates are rising. This brings major headwinds to the automotive sector. This is one trend to track closely in 2023.

Average Amount Financed for New Car Loans
 

 

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