Created: Thursday, 01 February 2018 18:08
Written by Dave Meldeau
We are currently right in the heart of Earnings Season, and if early results are any indication, it is going to be a blockbuster one indeed. So far, we have seen stocks outproduce the predicted moves in impressive fashion. On today's Free Trading Demonstration Webcast, we looked at three unique types of trades, all of which have been performing excellently in recent weeks.
Here is an example of one of the trades we are following this week from our Monday Live Trading Class:
Boeing (BA)- 340.68 at 3pm ET on Monday
Earnings: 1/31 Before Open
Priced In Move: 17.80
Buy February Week 1 350/352.50 Call Spread for $.80 Debit
Profit Potential: $.1.70
Break Even Point: 350.80
Exit: Hold to Expiration
Asset Allocation: 2 Units
On the Live Trade Exits Class tomorrow, we will exit this and all trades placed this week. To join us, please click on the registration link to the right of this Blog on this page.
Also, we will be starting a Boot Camp Training Series next Tuesday. If you are interested in joining us for this, please email us at Support @ETNtrade.com so that we can give you the details to enroll.
Let's make 2018 our best year ever!
Created: Tuesday, 26 December 2017 14:38
Written by OptionDave
The Holidays are upon us and many people are busy hosting guests, spending time with family, shopping for those bargain deals and putting together their New Year's Eve plans as well as resolutions. However, as hectic as things may be, DO NOT neglect your portfolios.
If previous years are any indication, we may see a bit of a selloff in the final week of the year. This is often due to profit/loss taking by traders looking to report them on their 2017 taxes. They then often buy right back in after the first. Last year, we saw a dip in the Dow heading into the final trading days followed by a nice gap up after the 1st. I see no reason for us to expect anything different this year.
Today, in our final trading session of 2017, we looking at trade on GOOGL, DIA, GS, JNJ, AMZN, T and others. We used past performance as a high indicator of this week's potential outcome, combined with technical indicators to justify the moves.
As you are cleaning up your homes after the Holidays, make sure you do not neglect cleaning of your fiscal home as well. As always, we are here to help.
Join us this week for a free Live Trading Class, where we will demonstrate the incredible power of Option Spread Trading, take a look at how we did this past year, and set our sites on specific opportunities heading into 2018.
To join us, simply click here to register: REGISTER FOR FREE EVENT.
I hope to see you there!
Created: Monday, 16 October 2017 19:11
Written by OptionDave
As we officially enter into Quarter 3 Earnings Season this week, and are currently sitting at an all-time high in the Markets, we must prepare ourselves for what is likely to be a very interesting, volatile and profitable month of trading. If you are not familiar with the ETNtrade style of trading, you may be surprised to see that we primarily use weekly expiration options, out-of-the-money spreads and in many cases, cover both possible directions the stock may move. While many Traders struggle to find a consistent statistical advantage when trading during Earnings, ETNtraders are very comfortable with our approach, our simple analysis and calculations, and the trades we will profit with from week to week.
So, what is the secret sauce that allows ETNtrade Members the opportunity to make 100-300% ROR in 2 to 4 days? It all boils down to a few simple calculations that allow us to make important decisions on what we think the stock will do, and therefore what strikes to use, based on what the experts reveal to us. It is actually a very simple process, but it takes practice and patience to master. Let me give you an example of this type of trading style:
On Wednesday of last week, we identified that the market expected WFC to move approximately $1.17, or 2.1% by Friday at close. Now, it did not say that it was to go up or down by that much; it simple stated that they expected it to move either up OR down by 2.1%. So, with WFC at 55.50, we positioned ourselves in a trade that allowed us to not lose our max risk as long as the stock moved only $.50 either way, break even if the stock moved $1.00 either way and max 100% ROR on our investment if it moved $1.50 either way. Think about that for a second… As long as the stock does what the Professionals think it will, we make money! That is a perfect scenario.
So, what happened? WFC ended the week at 53.69. The trade returned us 100% on our investment (we put 4 units on the trade, or 4% of our portfolio). So, we made an overall 4% return on our portfolio in TWO DAYS. Annualize that one.
In my humbled opinion, if you are not trading this way, you are gambling. We have been proving these techniques to be profitable year after year since 2009. We will be hosting a 2 Week Training Series in the coming weeks, so if you are interested in joining us for that, make sure to sign up for the upcoming free introduction to ETNtrade webinar on the right of this page. If you have any questions, of would like to discuss opportunities in becoming a Member, please feel free to ask. You can email me at Dave@ETNtrade.com.
I look forward to trading with you all in the near future. Let’s finish 2017 with a bang!!!
Created: Wednesday, 01 March 2017 15:49
Written by Dave Meldeau
After what many are calling a turning point in the early days of the Trump administration, the Markets are breaking records once again. But is it a good thing for us Option Traders? Let's take a closer look.
President Trump addressed Congress last night, and the Markets are responding. As I write this, we are up over 300 points on the Dow, which is looking to finish at a remarkable 21,000+ today. So what is behind this move? Well, many don't realize that we have the first true Businessman running the country. Yes, the Bush family was involved in the oil and sports businesses, but they were also Politicians. Sure, some Presidents owned farms or law firms, but that is nothing compared to what we have here. So, it is really not that big a surprise that the Markets would react positively. But will it continue?
A continuation of this Market Rally is certainly something no one wants to bet on, or bet against. It is inevitable that the Markets will fall at some point in the next 4 years. While I do not give all the credit to the sitting President for a rally, I also do not blame them for a tumble, unless of course they specifically say or do something to cause it. That was the case today. The pro-business/ pro-America comments made by the President had an immediate impact on Investor sentiment, and thus stocks. Option prices spiked early in the day but have settled down, which is a normal response during a Bullish Market like we have here.
While I firmly believe we are due for some profit taking, I for one am not putting my money on it. We will continue to be non-directional, or in some cases hedged-directional, and grow our portfolios regardless of the Market direction. On Monday alone, our trades netted a 24% overall return, and our trades today are positioned to add to that healthily.
If you are not on board now, what are you waiting for? This is the best time ever to be investing in Options, and we are always here to help when you are ready to learn.
Created: Monday, 12 December 2016 17:09
Written by OptionDave
In one of the most highly contested elections in United States history, the results are in and Donald Trump is primed to be the next President. No, this is not a political forum, so we are not about to talk politics. Instead, we will do what we always do here at ETNtrade; let's talk about how we can profit from this information.
Typically, when a Republican is elected to the Presidency, stocks drop. That did not happen in this case. Why? Is it because for the first time in history, the President-Elect is a PURE businessman (yes the Bush's were businessmen prior to entering politics but they were indeed politicians as well). Maybe the Market is simply going up on the rumor, just to be ready to sell off on the news. Or, maybe this is a sign of what is to come and the future is bright. Instead of asking why, let's ask... "What is next"!
Two sectors that I have my eyes on closely are Defense and Financials. Let's start with Defense. Already, rumors have it that Trump is highly critical of many of the deals currently in place for defense spending, such as Boeing's deal to build the F-35 fighter jets. If he can successfully negotiate down those deals, outsource them to other companies, or maybe insource them, what will that mean for companies like Boeing, Halliburton, Lockheed Martin, etc.? I think there is a beautiful short opportunity here and we will all be kicking ourselves if we stay too blind to take advantage of it.
The other sector I mentioned is the Financials. Obviously, the elephant in the room is the FOMC. Will they raise rates or not. How would that effect stocks? Well, it all has more to do with future spending/ cost of spending than anything else. The one sector most vulnerable is the Financial Sector. Cost of borrowing can be a double edged sword for the Financials, as it cost more for them to borrow yet they collect more on their loans, but if you look at the charts, it is hard to make an argument for anything but a glaring downside. The only question is... WHEN?
So that leaves us with the Market itself. Personally, I am hedged for a Market Selloff. It will happen, but knowing when is half the battle when it comes to trading options. The best bet right now would be January Week 4 options. Buying Puts, Put Spreads, Put Flys, etc. using that expiration will allow one additional week past Trump's inauguration. That should be enough time to give the markets a chance to react. There will be two FOMC meetings between now and then and that too could help. Holiday numbers will be out, and I only see AMZN being a winner this holiday (their percentage of overall sales so far is staggering).
While I do not give specific advice, and this is not intended to be such, I am very excited about my downside trades on XLF (Financial ETF), BA (Boeing), HAL (Halliburton), LM (Lockheed Martin), and DIA (DJIA ETF). Using Out-of-the-Money Put Spreads make these trades very affordable, super profitable (over 200% return minimum), and very probable given all that is surrounding them. I look forward to checking back in with you all in January with some results. Until then, just remember that there are three types of people: those that make things happen, those that watch things happen, and those that say “what happened”. Which one will you be?
Happy Holidays everyone, have a great New Year, and let's make 2017 out BEST YEAR EVER!