The retail apocalypse continues to swell.
And despite the fact that we just finished off the holiday season – what is typically known to be the brightest time of the year for retail – the numbers rolling in are still shockingly low…
Especially for the major “anchors” of the sector.
For instance, Macy’s just posted numbers that showed 2018 was their worst holiday season yet – and it’s not showing signs of turning around anytime soon.
But you don’t have to fall victim to this collapsing retail infrastructure.
And it all boils down to this simple strategy…
E-Commerce is Redefining Retail – And Your Profits
Macy’s shares tanked nearly 18% last week, marking their worst day ever, after the department store chain reported weak holiday sales and then cut its earnings outlook.
And this timeless giant isn’t alone in struggling to keep the doors open on their brick and mortar locations open.
Over last year, the struggles of other giants, like Sears Corp. and Toy’s R’ Us were headlining financial news networks and pointing all signs to even more decline in the retail sector.
But it’s not all bad for retail…
It’s no secret online shopping is increasing by the day. And even though brick and mortar retailers are beefing up their efforts to sell online, Amazon.com, Inc. (AMZN) is still the online retailer most responsible for their declining sales.
AMZN is innovative in their approach and with the new Alexa and their Dash buttons (which allow consumers to re-order their favorite products over and over). And currently, analysts are calling for the stock to beat earnings, once again.
But while AMZN is the biggest name in online retail in the U.S., there’s another global online “e-tailer” that can go toe to toe with this juggernaut: Alibaba Group Holding Limited (BABA), the Chinese online commerce company.
Now shares in both AMZN and BABA may be too expensive for most people to stockpile (pun intended), even though the disparity in share price between the two is huge, AMZN is trading over $1,686 per share and BABA over $152 per share.
The good news is that’s where options can be used…
Options are a way to leverage the future price moves of these stocks, but even options on these companies can be pricey when you’re simply trading long calls.
The way around that is the “call debit spread” strategy.
This is where you buy-to-open a call option at one strike price and then sell-to-open another call option on the same stock at a strike price higher than the one you bought, at the same time as a single trade. This creates a debit when you open the trade.
The goal is to have the option that you sold trade just higher than where you believe the stock will be at expiration, that way the spread gets exercised, and you make the difference in the strikes of the spread into your account (minus the initial cost).
You can even price out spread ideas to see how the spread will work.
Now assuming AMZN stays just above the strike price of the option you sold, it should have the potential to yield you a rate of return you are happy with.
And BABA can work just the same. The stock continues to trend higher despite facing a small pullback at the beginning of the year.
So, while brick and mortar continues to struggle and scrape together whatever sales they can in this new global “e-conomy” – rest assured the e-commerce giant like AMZN and BABA are the future of the retail world and the future of your profits.
But before you’re ready to score some major profits, you’ve got to cover the basics…
Finding a broker – the right broker, one that’s capable of handling each of your particular needs – requires a variety of considerations.
Everything from account minimums, acceptable trade types and commissions fees… to trading platforms, customer service availability, and regulatory standing. Then comes getting your options clearance.
It may seem confusing at first, but I cannot overstate how easy this all is…
And to help, I’ve created a special guide that walks you through, step by step, exactly how to do it. Everything you need to know to learn how to get started is right here.
America’s #1 Pattern Trader