AAPL and XLE Options are Cheap
Dear Profit Takeover reader,
What makes a cheap option a winner?
When you hear me talk about cheap options – I am usually talking about trades that fall into these two categories:
Inexpensive price – in Profit Revolution we generally trade options under $1
AND
MASSIVE profit potential – I look for trades that will be making bigger moves BEFORE the expiration date.
This profit potential is so big because we beat the expiration date…
For an option to be profitable – I have to beat the market makers at their own game.
Options are priced such that at expiration, they have a 70% chance of expiring worthless…
Therefore, to actually make profit, the move I predict –
Since options expire at an accelerated rate the closer we get to expiration.
So how do I find options that are “cheap” – like some I am considering in AAPL and XLE?
This is normally reserved for my Profit Revolution members, but I wanted to show you how I come up with my cheap option plays…
Image from wallstreet.io
Every Profit Revolution member has access to this trading software – wallstreet.io – and they are able to customize and view several indicators at once.
The red line above shows the implied volatility of the stock – which has a huge impact on the price of the options for that stock.
(The blue line shows the historical volatility – depending on how many days it’s tracked, and the yellow bars on the side of the candles show the volume profile.)
When implied volatility is low, you can find cheap options, and when it is high, you can sell those options for a profit…
If you want to trade cheap options with me – and learn how to use this software yourself…
Join us in the Profit Revolution show every Monday through Thursday at 2:15 p.m. (ET) and Friday at 12:00 noon (ET).
Or click here to find out more info about what we are currently trading.
See you tomorrow,
Mark Sebastian
Founder, Profit Takeover
VIX TRAFFIC LIGHT
My VIX traffic light today is YELLOW…
Which means, I am expecting to see wild moves in volatility.
VIX is currently at 27.03…
Image from Yahoo Finance
And it could swing in any direction so buckle up for some big moves.
THIS WEEK’S SCHEDULE (ET)
Thursday 6/2: 11:00 – 11:30 am Brian King Simulcast
Friday 6/3: 9:30 – 10:00 am Profit Takeover w/ Brian King
TODAY’S WATCHLIST
- Apple Inc (NASDAQ:AAPL)
if AAPL doesnt hold $150 its is going back to $140.
The stock is currently at $150.34 –
Image from wallstreet.io
Since the IV is low, I will be watching and looking at a play depending on whether or not AAPL holds $150.
- Energy Select Sector SPDR Fund (NYSEARCA:XLE)
Oil and XLE have been booming higher…
XLE is currently trading at $89.58…
Image from wallstreet.io
It is a little soft this morning, but long-term this is heading higher.
Since IV is in a good place, I’d look for calls here.
- AMC Entertainment Holdings Inc (NYSE:AMC)
Top Gun blew the doors off the weekend box office…
AMC got a nice pop.
It’s currently dropping now at $15.06…
Image from wallstreet.io
If options are going to be expensive, but I would look for a cheap way to play this move.
Comments
May 31 2022
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