Secure Your Next Profit With This Volatility Power Play

Editor’s Note: If you’re watching the financial news networks, you’ve probably seen all the so-called experts trying to predict which earnings reports could “save the stock market” after its recent mini-crash. But they’re missing one small detail that could completely change the way you profit from earnings. And today, Tom Gentile is sharing the details you need to cash in on any earnings report- good or bad. Click here for details.

Dear Power Profit Trader,

Trading this market is like riding a bucking bronco.

For instance, the S&P 500 has dropped 11% in October which has led to many heading for the sidelines or watching like a deer in headlights.

On the other end of the spectrum, some are playing the downside by shorting stocks or buying put options.

However, this only works as long as the market keeps dropping…

But you don’t have to roll the dice in this volatile market because there’s a surefire way to grab gains no matter which way the market turns.

Here’s how you can easily turn volatility into profits…

Ride this “Bucking Bronco” Market to Profits – Here’s How

We are currently in the midst of extreme market volatility.  The month of October has seen the S&P 500 drop 11% to a low of 2603.  We have seen daily drops as high as 3% intermixed with rises as high as 2%.

Although many believe the market has further downside, some are left wondering when the market will bounce back up.

You see, going long (bullish) in this market won’t work if the markets continue to drop.

Shorting this market will hurt should it rebound.

So, in turn, this has left many people to retiring to the sidelines, shaking their heads, not sure what to do.

But regardless of the uncertainty, one thing remains clear: the market will remain volatile for now.

That’s why the one word I’m about to say is so important…


What it is: An options trading strategy where you buy an at-the-money (ATM) call and an ATM put with the same strike prices and expiration dates – at the same time, on the same order.

When to use: In high volatility and during earnings season

How to profit: When the stock (or other underlying security) moves either up or down

Maximum risk: The net debit paid (cost of both the call and put)

Maximum reward: Unlimited

Pre-earnings straddles: Exit before earnings come out

Post-earnings straddles: Exit within a few days after earnings come out

And it allows you to win no matter which way the market goes…

You see, when the stock goes up enough the calls make more money than the puts lose and vice versa.  This is illustrated in the straddle risk graph below:

Now, like with any trade setup, there is risk in a straddle.  If the stock stays flat, both the call and the put lose money.

But this can be avoided by identifying stocks that are moving a lot.

The best way to do that is to find stocks that have the highest Average True Range (ATR).  Average True Range, developed by J. Welles Wilder, simply indicates the stocks volatility over a 14-day range.  The higher the ATR, the more the stock moves around.

Here are my top 10 volatile (highest ATR) stocks for this month:

Now remember something… these stocks are the wildest movers in this wildly moving market.  In other words, the likelihood of them continuing to move is high.

The next step is to construct straddles.  Here’s what you do:

  1. Buy At-The-Money (ATM) Straddle  (strike price = stock price)
  2. Use 60-90 Day Options.
  3. Exit Conditions:
  • 25% Profit.
  • 25% Loss.
  • 30 Days to Expiration.
  • After Earnings Announcement.

Think of this system as grabbing chunks of money off the table when they’re available… similar to the kid’s game, “Hungry Hippo.” With the right stocks, you can essentially keep playing this game at infinitum.

Over time you will generate a stable of stocks that produce the best gains, so don’t be afraid to replace stocks that don’t perform.

And if you’re new to options trading, don’t worry.  The straddle is the safest option strategy available, particularly if you follow the exit rules above.

Now, there is one more critical piece when it comes to finding success with straddles – and it’s by digging into the slippage.

It’s critical that you avoid options with too much slippage.  Slippage is the difference between the bid (sell) and ask (buy) price and you don’t want it to be any higher than 10%.

For example, in the following straddle, the slippage is $0.25 ($3.05 – $2.80).

By dividing the slippage of $0.25 by the straddle ask price of $3.05 we get a slippage of 8.3%, which satisfies the 10% maximum slippage criteria.

This setup allows you the perfect profit opportunity – no matter which direction the market turns.

Now, the straddle is just one of the many strategies I recommend to my readers based on what’s happening in the markets.

In fact, I always have a plan no matter if the markets are up, down, or sideways.

Every single day the markets are open, I crunch through 10 years’ worth of daily transactions on 200 of the most liquid stocks and ETFs in the market.

And one I pinpoint the most lucrative high-probability, low-risk opportunity the markets can offer, I recommend a very specific move to ensure my readers can profit no matter what’s happening in the markets.

It’s how my readers have been seeing gains like 145.27% on AMZN in 17 days, 130.05% on AAPL in 9 days, 128.42% on BKNG in less than 24 hours…

And how you can set yourself up to grab thousands in cash in 30 days or less.

Good trading,

Tom Gentile

America’s #1 Pattern Trader

2 Responses to “Secure Your Next Profit With This Volatility Power Play”

  1. If it isn’t already published, you should publish a book or series of articles that will show a rank and skeptical newbie exactly how to trade in stocks, with insider’s jargon all carefully defined, and with well illustrated plans on how to respond to market changes and why, with an eye for turning modest investments into highly rewarding returns. Duh. Show me how to do it, but inform me before prices change, so I can continue to accrue wealth in safe ways that will not result in my money invested becoming someone else’s money return. Make me smart, but not an investment brainiac, when I likely will have too many ways to operate and too many choices and too many things to take into consideration that I can’t make any particularly good decisions that will further my agenda, to rule the world, conquering it, one person at a time. This will require some capital, so I need to make money to sustain my outreach effort and still have safe money quietly increasing my wealth. with investment in pot ipos to provide many rewarding spikes legible to the discerning eye that will recognize when it is time to sell.
    To summarize: I want to invest between $5,000 and $10,000 to generate almost instant wealth of some significance, and from that sum (5k-10k) invest in stocks that won’t let me down, that will ultimately result in a dollar multiplier for my wallet. I just want in, not to lose,
    inclined to win, and reinvest into trusted stocks or some that seem to have more value to exploit by clever trading as suggested by Money Map Press. That’s all I want, something for nothing maybe, safe, little risk, destined to be historical events that I will have a piece of,
    I (pay attn to the wording, cuz most people have it backwards) want to “eat my cake, and have it too.” The phrase is meant to indicate and impossibly demanding person whose conditions are simply impossible. The other way, most used, is, “Wanting to have your cake and eat it too.” Something that anybody can do. If you have your cake you can eat it, but if you have eaten your cake, naturally you don’t have it. If that’s what you want, fine. But I aspire to be one of the people who you shine the light upon for the purpose of demonstrating that it really does work. Show me (how to get) the Money. Last word: Can’t you do something to expand this typing space so that it is not so sensitive to the up-and-down arrows that entire sentences are lost with a single, very light-handed push. I need to read what I wrote, so I can decide if it is the right time for me to write about that which is foremost in my mind.

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