The No. 1 Strategy for Next Week... While we've taken several winners in the banking sector so far, the truth is that earnings season is just beginning. And that means it's time for some strangle action. For those who don't know, an option strangle is an investment strategy that involves buying both a call and put option on the same stock - with the same expiration date but different strike prices. A strangle allows you to profit from significant price movements in the underlying asset, regardless of whether it goes up or down. By purchasing a call option (an option to buy) and a put option (an option to sell), you're essentially betting that a large price swing (in either direction) will occur. If the price moves significantly, the value of one of your options will increase, while the other will decrease. The goal is to make more money from the increasing value of one option than is lost from the decreasing value of the other. Option strangles are often used when an investor expects high volatility in the market but is uncertain about the direction of the price movement. A strangle provides the opportunity to profit from a significant move while limiting potential losses if the price remains relatively stable. YOUR ACTION PLAN My colleague Bryan Bottarelli uses strangles regularly in The War Room. They've proven to help traders potentially double their money - sometimes in less than 24 hours. And with more earnings coming up, isn't it time you joined us in The War Room and got in on the action? Click here to unlock our trades and see how we're playing next week's earnings announcements. |
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