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October 14, 2018 | Here’s a Trade That Could Have Paid You 20-to-1 Last Week

Rick Ackerman

Rick Ackerman is the editor of Rick’s Picks, an online service geared to traders of stocks, options, index futures and commodities. His detailed trading strategies have appeared since the early 1990s in Black Box Forecasts, a newsletter he founded that originally was geared to professional option traders. Barron’s once labeled him an “intrepid trader” in a headline that alluded to his key role in solving a notorious pill-tampering case. He received a $200,000 reward when a conviction resulted, and the story was retold on TV’s FBI: The Untold Story. His professional background includes 12 years as a market maker in the pits of the Pacific Coast Exchange, three as an investigator with renowned San Francisco private eye Hal Lipset, seven as a reporter and newspaper editor, three as a columnist for the Sunday San Francisco Examiner, and two decades as a contributor to publications ranging from Barron’s to The Antiquarian Bookman to Fleet Street Letter and Utne Reader.

Last week’s avalanche on Wall Street provided some opportunities for Rick’s Picks subscribers to make easy profits, always with risk tightly under control. Although there was fear in the headlines, the 24/7 chat room was cool, calm and even jocular at times.  Click here to join in the fun for two free weeks. One reason some subscribers were feeling light-hearted while millions of investors got pulped is that they had taken my timely recommendation to buy call spreads in VXX, which tracks short-term volatility in the S&P 500. Because this trading vehicle rises when stocks fall, its ue quickly doubled, then quadrupled in as stocks began plummeing early last week.

The original recommendation went out on September 28, airing on the Rick’s Picks Facebook page the same day under the headline Leveraging an October Disaster with Cheap Calls.  Sound enticing? It was — and easy, too. One need only have bought soon-to-expire October 30/35 call spreads in VXX at the recommended price of 0.50 or less. It traded down to 0.21 over the next several days before taking a powerful leap that increased its value more than twentyfold by week’s end. Check out the Rick’s Picks Facebook page if you don’t believe it.  And see for yourself whether you could have done the trade based on the guidance I’d provided.

Here’s a Play for Next Week

While your there, click on my latest video, which details a tactic using ‘vertical’ call-option spreads to leverage a further fall in the Dow Industrials next week. I’ve suggested that traders pay 0.35 or less for the spread, but it has the potential to hit 2.50. The Indoos would need to plunge by more than 800 points for you to hit a home run, but you stand to make as much as $860 for every four spreads you buy for $35 apiece.  Granted, stocks might not collapse next week, even though I have projected a fall of at least 754 points (see my touts below). But the odds you’d be getting are better than six-to-one. That’s a great bet if you think there’s even a 50-50 chance stocks will continue lower next week. Check it out! And be sure to drop in on the chat room to see how much fun we’re having, especially when stocks are falling out of bed.

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October 14th, 2018

Posted In: Rick's Picks

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