Economists have forecast some dire statistics created by the COVID-19 pandemic that brought the U.S. and global commerce to a virtual standstill, including:
- U.S. GDP growth may very well contract by 50%, a contraction not seen since the Great Depression.
- Unemployment peaked at 14.7%, and it’s currently 11.1% and will average 9.3% for 2020.
- Inflation will average .8% in 2020 and rise to 1.6% in 2021.
It’s clear that the U.S. economy is hurting and will continue to hurt until COVID-19 is contained.
With the close approaching presidential election and this historic earnings season, we could be one news story, one tweet, or one poor bellwether company earnings announcement away from a major correction.
In short, there is volatility on the table and we’re just a heartbeat away from another market crash.
Now, this sounds bad on the surface, but this is a great opportunity for traders.
If and when we get this correction, those positioned to profit will profit big.
And I am going to show you one play to lock in double-your-money gains right now…
Weekly Put Options are the Best Way Play the Unpredictable Market
Think of weekly options like Formula 1 race cars that go from 0-60 in 1.6 seconds.
Just like these cars, weekly options move fast.
Weeklies will reach a double with less movement in the underlying stock – often as little as under 5%.
And today we’re focusing on put options, which make money when the underlying stock drops.
For example, on July 21, 2020, I got a bearish signal from my Weekly Cash Clock scan on JD.COM (NYSE: JD).
The stock had just touched $65 resistance and the short, medium, and long-term channels collided, providing an excellent pivot point for a fast double.
With a five-day bearish forecast, we bought the JD July 31, 2020 $63 Puts for $2.10. This option had only 10-days of time left, so for this trade to work, the stock needed to move fast.
Now, on July 21, 2020, the stock opened for $65.07. That means for 100 shares, you would have needed to shell out $6,507.
Instead, my subscribers gained control of 100 shares of JD for just $210.
Only three days later, on July 24, 2020, JD dropped to less than $59 intraday – a 6% downward move that you can see in the chart below.
Now, typical longer-term options would not have doubled with such a small move down in the stock… That’s why the trick is to use short-term weekly options.
To find these, you can look for simple technical indicators like a break below support on increasing volume and moving average crossovers.
Once you have a directional opinion, buy seven- to 14-day options at strike price or two Out-of-the-Money (OTM). For puts, this means buy the options one to two strikes below the current stock prices. Then, all you need to do is exit within five days – or when you hit that fast double.
Weekly options offer versality that you can use to profit on the rise or fall of the underlying market.
And in times of high volatility, they’re the best risk-management system you can find.
You can very quickly – and very easily – create a potentially unlimited stream of income by simply adding options to your portfolio. And the best part is… you’re not limited by market direction, either.
Whether the market is up, down, or sideways, there’s always a way for you to profit using options.
“I started my account with $10,000 two months ago. Today, I have $13,080.”
“Just started two weeks ago. Started my account small with $2,500. Now, I’m up to $2,809.”
“This was my first trade. Started with $100, ended up with close to $200 in one day.”
Believe it or not, these readers are all talking about the same trading strategy – weeklies.
I send my Weekly Cash Clock readers a new weekly trade recommendation every Monday. And each one has the potential to profit by Friday.
In fact, since June 24, readers have had the chance to take home 50%-plus profits on five winning trades in a row.
This is some of the fastest cash in the trading game. To learn how you can receive my next recommendation, click here.
Talk soon,
Tom Gentile
America’s #1 Pattern Trader
