Big Money Is Shorting the Market

Big money is shorting the market…

I saw this trader buying a massive put spread in iShares iBoxx $ High Yield Corporate Bond ETF (NYSEARCA:HYG).

This ETF, HYG, tracks the investment results of an index composed of U.S. dollar-denominated, high yield corporate bonds.

These spreads tell you when the bond market is facing pressure. 

When spreads widen out and HYG is taking it on the chin, that’s when markets fall apart. 

Bond market traders are smarter than stock traders – so if bond traders think HYG is going down, I’d trust their bet. 

To piggyback this move I could look for some cheap puts in HYG.

Not all big money traders are smart… and you have to know the difference.

The art of utilizing big money flow for retail profit is nuanced.

Fortunately, I’ve had decades of experience using my S.U.R.E. system to analyze and improve the SMART money plays I see. 

Here’s how it works:

Diving into each big money move helps me determine the best way to optimize the trade for retail traders. 

This next big money is a massive volatility play, and here’s how  I’d enhance it… 

I saw an aggressive volatility play going up today in DKNG…

This trader is selling a put spread in bulk…

Which means they are expecting a hard move either up or down very soon.

Here’s what the trade looks like mapped out:

How could a retail trader play a move like that?

I don’t like buying short-dated calls… but I think DKNG is heading up… 

The $17 calls are $1 and the $16 puts are $0.85 – 

So, during the live Profit Takeover show I made this suggestion if you like this big-money trade:

If you want to piggyback, you could open the DKNG September regular 2022 $17 call-$16 put strangle for $1.85 or less.

A strangle is a high-level trading strategy that involves holding both a call and a put on the same underlying asset.

We got a great question about DKNG:

I am glad you asked.

In my Inside Money Trader room, I come up with two straight calls or puts per week to piggyback big money moves…

Now this particular paper thinks that DKNG is moving either up or down. The call side is heavier, but it might not be the best candidate for a straight call or put since the move could happen in either direction. 

I am watching some big paper that IS a better candidate to piggyback a straight call or put for the Inside Money Trader members, and I’ll be dropping that trade tomorrow sometime before 3:00 p.m. (ET). 

And for a limited time, traders can get access for a month of Inside Money Trader for only $49. 

That’s cheaper than a tank of gas. 

So sign up right here to get tomorrow’s trade or call Gabe and his team to find out more at: 877-848-3418.

Until next time,

Mark Sebastian

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