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.

Uncategorized  | October 3, 2019

One of our favorite trades has been selling put options on Facebook in anticipation of the federal government trying to break up the company. So far, Facebook remains intact and the federal government seems to be coming apart as President Donald Trump faces an impeachment inquiry.

What may happen to the president remains unclear, but Facebook (ticker: FB) thus far remains one of the world’s true social-media monopolies. Investors who have sided with the company over the government’s antitrust investigation have been well rewarded for owning the stock and selling puts to potentially buy even more. So far this year, the stock is up 35%, trouncing the 19% return of the S&P 500 Index.

Though Facebook’s stock price is red hot, and the company remains mired in controversy, Facebook’s options are lukewarm. The puts and calls are trading without any kind of fear or greed premium ahead of an expected earnings report on Oct. 23. (Puts increase in value when the underlying security price declines, while calls increase in value when the underlying security price increases.)

This is quasi-unusual as the stock is down about 4% in recent sessions, the kind of move that often lifts implied volatility. Yet options that expire in two months with strike prices that match Facebook’s stock price are trading around the 50th percentile of the implied volatility range over the past year.

Anyone who has a strong view that earnings will cause the stock to make a sharp move faces a sweet spot. They can buy Facebook puts and calls without paying top dollar, a strategy that appeals to Shawn Quigg, J.P. Morgan’s derivatives strategist. He told clients to consider buying “straddles”—that is, buying a call and put that match the stock price and that cover Facebook’s expected earnings report.

With Facebook’s stock at $178.22, investors could buy the October $180 put for $4.50 and the call for $6 that expires Oct. 25. For the straddle to prove profitable, the stock would have to move more than $10.50.

The straddle strategy is typically used when options volatility is low, but the odds of the stock making a sharp move are high.

If the straddle moves seems like too big a big move for the trade to work, and you’d rather play the downside to add more to this winning position, just sell the Oct. $177.50 for $4.50 that expires Oct. 25. The put covers earnings, of course, and obligates investors to buy stock at an effective price of $173. Should the stock be above $177.50 at expiration, investors can keep the put premium. Over the past 52 weeks, the stock has ranged between $123.02 and $208.66.

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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