2 Jul

How I Took Advantage Of A Sucker’s Bet In FB

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What a way to kick off the second half of 2020…

With the adjustments I made to my trading in June, it paid off.

I started with about $150K in trading capital at the start of June, and finished with $109K in realized gains.*

 

 

About $70K of those profits came from my momentum trading strategy and Monday Movers.

The rest of those gains came from my Weekly Windfalls strategy.

The reason why I love my options trading strategy and plan to use it a lot more is that it allows me to stack the odds to my favor…

And “set it and forget it”.

The thing is…

Options may be difficult to learn at first.

However, I want to teach you an easier way to trade them… the best way I know how to…

Through a real-money case study in Facebook (FB).

I’ll show you how I identified the trade, set it up, and locked in $3,800 in it.*

 

The Sucker’s Bet In FB

 

Facebook received a lot of backlashes recently and companies are boycotting ad placements.

The company has had a tough time dealing with hate speech on its platform… and after news got out some major companies were pulling their ads…

The stock got rocked.

 

Source: StockCharts

 

Of course, when the stock gets hit that hard…

A lot of traders who are long, as well as speculators, were bidding up the puts.

There was a lot of fear and greed going on there… and when a stock gets hit hard like that, there’s one thing I think about…

Selling options.

I get it. Selling options sounds scary. I thought the same thing when I first started learning the strategy.

However, I knew that there are many options traders who make money selling options premium…

If I let a self-limiting belief prevent me from learning how to utilize this technique, I’d be kicking myself for missing out on what I believe is easy money.

Let me break it down for you…

Take this Facebook trade for example.

I noticed a key support level around the 89-day exponential moving average (EMA), right around the $209 level.

I figured even if it breaks below that, buyers would step in and quickly buy shares on the cheap.

You see, Facebook has thousands of advertisers… and just a handful pulled out.

Not only that, it’s not the company’s first rodeo with scandals. It was hit with the Cambridge Analytica scandal not too long ago, and shares quickly rebounded.

I believed this was the same idea.

Rather than buying calls, which actually can stack to odds against me depending on which strike and expiration date I select…

I placed a bullish bet by selling puts.

Here’s how I set it up.

 

 

Now, to understand this, let me explain.

I sold the $210 puts. 

That basically means that I expect FB to close above that price by July 2nd. 

I simultaneously bought the $205 puts as insurance if, for some reason, the stock went against me.

That way, I hedged my bet and defined my risk.

All in all, this trade risks about $9000 to make about $6000.

Now, the beauty of this is that you’re not locked in. 

I can close out the trade if things change, or I can take profits when I see fit.

Not only that, but it’s scalable.

Let’s say you don’t want to take on a whole lot of risk… well, an idea would be to only get into 3 contracts. In that case, the defined risk is $900 to make about $600.

On the other hand, if you had high conviction FB could bounce and can stomach the risk… you can trade more contracts.

You have to make that choice for yourself though.

With this specific trade, I actually closed it out the same day I placed it… and was able to lock in a $3,800 profit.

If you want to learn more about this strategy and how it all works…

Then you’re in luck.

I created a special training guide detailing the “bookie” advantage and why I believe this strategy is so powerful.

Grab it here.

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