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April 7th, 2024 | Issue 229 |
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Today, I'll share a blend of practical trading insights and personal experiences, starting with my recent $PLAY trade and the strategic maneuvers involved, which came on the heels of my latest London trip that brought a fresh perspective and energy to my trading desk. This week, I did a long butterfly on Dave & Buster's Entertainment, Inc. ($PLAY), a company that owns and operates entertainment and dining venues across the United States and Canada. I employed a long butterfly strategy, something I have been doing more of lately as mentioned in my recent newsletters, focusing on the $70 strike with a high positive vanna. Now, you might wonder, what's Vanna? In simple terms, Vanna measures how the delta of an option changes concerning changes in the underlying asset's volatility. A high positive Vanna indicates that if the stock price increases, the option's delta also increases, which can be advantageous for certain strategies, like the one I used. See the $PLAY Vanna exposure chart here: |
Anticipating a solid 10-15% rally, the market responded well as $PLAY surged 10% to $65, aligning with our expectations. This strategy allowed me to profit if $PLAY's stock price stayed close to the $70 strike, with limited losses due to the structured nature of the butterfly spread. For those less familiar with the strategies: - Butterfly Spread: This involves buying and selling call options at different strike prices, centered around a middle strike. It's a way to profit from a stock price that stays close to that middle strike, with limited losses.
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- Condor Spread: Similar to the butterfly, but with additional options at strike prices further away from the middle. While it offers a wider profit range, it requires a slightly higher initial investment.
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Now, let's switch gears to my London trip. It was a simple joy to bike through the city, catch a show like Les Misérables, and explore the National Gallery. But the real highlight? Spending quality time with my daughter, away from the usual routines. Returning from London, I feel refreshed and ready to tackle new challenges. Just as navigating the city's streets demands adaptability, so does navigating the ups and downs of the financial markets. Keeping this in mind, let's approach both trading and life with practicality and resilience. By leveraging our experiences, we can chart a course toward success. |
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WE ARE NOW ON THE X PLATFORM Every day, I highlight our best strategies and potential trading setups via the X platform. Check it out! Click Here>> |
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Unlock a promising opportunity with $SLV, identified by our AI as the next big mover. Don't miss this chance to enhance your portfolio based on smart, AI-driven forecasts. Discover More & Act Now |
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Chief Investment Officer/Founder |
(A portion of Yellow Tunnel sales will go to directly help the Ukrainian people) |
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TRADE IDEA OF THE WEEK AI Forecasts a Notable Rise in $SLV |
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In this week's trade of the week, we turn our attention to silver, specifically the iShares Silver Trust ETF ($SLV). $SLV is designed to track the price of silver bullion, offering investors a convenient way to gain exposure to the precious metal. With market volatility persisting amidst uncertainties surrounding inflation and geopolitical tensions, silver has regained its status as a sought-after safe-haven asset. |
As discussed in our analysis of market conditions, silver's intrinsic value as both a store of value and an industrial metal positions it favorably amidst uncertain economic landscapes. With silver often viewed as a hedge against inflation, the current environment of elevated inflationary pressures further enhances its appeal as an investment option. Moreover, silver's utility in various industrial applications, ranging from technology to renewable energy, adds another layer of demand that could drive prices higher. As global economic recovery efforts gain momentum, the demand for silver in these sectors is expected to increase, contributing to its potential appreciation. |
Against this backdrop, AI has forecasted a notable rise in $SLV in the coming week. This forecast aligns perfectly with the prevailing market conditions and underscores the rationale behind considering $SLV as a strategic addition to investment portfolios. By leveraging the potential upside of silver through $SLV, investors can position themselves to navigate market volatility effectively and preserve their wealth in uncertain times. Just take a look at the 10-day Predicted Data for SLV: |
As we approach the upcoming week, the decision to buy $SLV could prove to be a prudent move, providing investors with a hedge against inflation and diversification benefits. With silver's historical resilience and the current market dynamics in mind, investing in $SLV offers a strategic opportunity to safeguard against market fluctuations and capitalize on potential upside in the precious metals market. |
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| Vlad Karpel
YellowTunnel and Tradespoon Founder |
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P.S. Click here for access to the Power Trading Live Strategy Roundtable Recorded every Thursday. |
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DISCLAIMER: Vlad and his team may have a financial interest in the picks as they trade many of the same equities and options they pick. Vlad Karpel and YellowTunnel (Company) is not an investment advisory service, nor a registered investment advisor or broker-dealer and does not purport to tell or suggest which securities or currencies customers should buy or sell for themselves. All investing strategies are made available to the general public on a regular basis. We do not provide personalized financial advice or investment recommendations. As an investor, you know that any kind of investment opportunity has its risks. There is no such thing as low-risk stocks and we recommend you invest wisely and that only risk capital should be used to trade. Investing in Stocks and Options is highly speculative. No representation is being made that the use of this strategy or any system or trading methodology will generate profits. No representation is being made that any account will or is likely to achieve profits or losses similar to those discussed here and on our website. PAST PERFORMANCE IS NOT INDICATIVE OF FUTURE SUCCESS: It should not be assumed that the methods, techniques, or indicators developed at YellowTunnel will be profitable or that they will not result in losses. Nor should it be assumed that future picks will be profitable or will equal past performance. All of the content on our website and in our email alerts is for informational purposes only and should not be construed as an offer, or solicitation of an offer, to buy or sell securities. Remember, you should always consult with a licensed securities professional before purchasing or selling securities of companies profiled or discussed on YellowTunnel.com. Performance results that are discussed above are from the Live Trading Room. Multiple YellowTunnel tools were used to achieve these results. Trade % Gain/Loss is calculated by dividing the $ Gain/Loss by the Max Risk, which is the posted Stop Loss for the trade. Yellow Tunnel's performance data represents the average return on all trading recommendations from January 1, 2020, to today. *Win rate percentage reflects the average that Yellow Tunnel's software helped me identify a profitable investment strategy.** Triple-digit returns are not typical and are not intended to reflect the likelihood of similar returns in the future. |
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