At this crisis point in history - what could possibly create these rare and extraordinary gains?

An Arizona multi-millionaire's revolutionary initiative is 
helping average Americans  find quick and lasting stock market success.

Since the Coronavirus came into our lives this slice of the stock market has given ordinary people the chance to multiply their money by 96% in 21 days on JP Morgan.

Stocks  | May 13, 2020

Shopify Inc has arguably been the stock to own in 2020. Buoyed by a global flight to e-commerce as a result of COVID-19, shares of the e-commerce platform for small businesses are up 43% in 2020. 

The Underlying Stock: Relative Strength

As you can see from the table below, SHOP has massively outperformed the S&P 500. While the stock sold off in March with the rest of the market, it has since rallied 130% to new all-time highs. 

With the stock rising as much as it has, there are bound to be people on both sides of the trade. If you aren’t sure whether the stock will continue going up or come crashing down to earth, here is an options trade for you. 

The Options Strategy: Credit Iron Condor

The trade card below outlines a credit iron condor, a strategy of buying and selling a put option and a call option to express a neutral view on a stock. 

This strategy involves four legs. You would buy a put option with a strike price of $615, sell a put option with a strike price of $690, sell a call option with a strike of $755, and buy a call option with a strike of $830. 

Based on Shopify’s historical price data, this iron condor has a 75% probability of profit. Also, putting this spread on will leave you with a theoretical edge (the expected average return of the trade) of 20.7%. 

Payout Diagram

The graph above is a payout diagram for this strategy. As you can see, the trade is profitable as long as shares of SHOP are between $664.10 (the strike of the put being sold minus premium received) and $780.90 (the strike of the call being sold plus premium received) by May 22. 

The maximum profit from this trade is $2,590 (the credit received for selling the spread), and occurs if SHOP is between $690-$755 at expiration. The maximum loss is $2,375 (the credit received minus the widest width of the spread) and occurs if both puts are in the money.

The Takeaway: 

Iron condors are a great way to take advantage of elevated implied volatility. SHOP’s current IV is at 58, which puts it in the 77% percentile over the previous 52 weeks. This trade allows you to collect premium off the expectation that the stock’s expected move is greater than the actual move by May 22. 

A revolutionary initiative is helping average Americans find quick and lasting stock market success.

275% in one week on XLF - an index fund for the financial sector. Even 583%, in 7 days on XHB… an ETF of homebuilding companies in the S&P 500. 

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