It’s time to end the trading week with a special edition of Ask Me Anything.
Every week, I answer questions straight from Profit Takeover readers.
Why? Because it doesn’t matter what I have to say – not if I’m not delivering what my readers want to know.
Let me be frank – I’m not like these guys on Wall Street. But I used to be. In my old career on the floor, all my coworkers and I cared about was helping ourselves…
And helping the rich get richer.
But now, I’m on a new mission. The moneymaking shouldn’t be reserved for the Wall Street elites. For the first time, these trading strategies are up for grabs for regular traders like you.
The point of Profit Takeover is to help you harness those strategies into real, fast, asymmetrical profits. I’m here to help you. And I have a great round of questions today that won’t just help the people who asked them.
Want to know how long you should give a trade before exiting?
Care to learn about more ETFs, like UVXY, that would benefit from a put trade?
How about where to spot your next asymmetrical trade recommendation?
Well, I’m baring all – plus, we’re exiting a trade that we’ve been in since April…
Richard is brand new to options trading – welcome!
Profit Takeover is one of the best places to be as a new trader. This way, you’re starting out the right way…
With the financial power in your hands.
Well, Richard, you’re in luck – because if my recommendations on Verizon Communications Inc. (NYSE:VZ) and American Airlines Group Inc. (NYSE:AAL) were your first option trades, then you just booked an incredible asymmetrical winner.
This week, we closed out of our AAL call for a 110% profit. Congrats!
Now, what about VZ? This trade is currently at a loss. You can track its performance right here. So… why haven’t we exited?
Well, we paid under $1.10 for each of our VZ positions. And they still have over three months until they expire. Typically, I don’t start to worry about longer-dated out-of-the-money (OTM) calls that aren’t working until about 30 days to expiration.
If I get to that 30-day mark and there’s no glimmer of hope on the calls, then I’ll kill them.
But for now, we’re holding tight.
For shorter-dated trades, you have to be a bit more aggressive when it comes to closing losers. In that case, I typically cut bait once I’m down 30-50%.
And on that note… our iShares Silver Trust (NYSEARCA:SLV) June 18, 2021 $26 calls are sitting at just over a 45% loss today.
With expiration coming up, we’re going to close this one out…
And roll it into next month.
See, this trade didn’t work. But I’m still bullish on silver, and I think next month, we could wipe this month’s loss out with a new asymmetrical gain.
With that said, here’s an update…
Buy to open the SLV July 16, 2021 $26 calls for $0.85.
You can track our new trade in the Profit Takeover portfolio, right here.
Speaking of trades – this week, I sent our newest Profit Takeover recommendation – a put on the Proshares Ultra VIX Short-Term Futures ETF (BATS:UVXY).
See, the UVXY underwent a reverse split last week. That, combined with dropping volatility, will push this ETF lower over the next few weeks. And with a put trade, we can profit on the downside, leverage that movement into an asymmetrical return.
But Sam wants to know more…
About every leveraged VIX ETF is a loser in the long run. But I chose UVXY for a reason. It is, hands down, the worst – by a long shot.
And that’s because the underlying asset is also a loser long term. UVXY is a leveraged version of the iPath Series B S&P 500 VIX Short-Term Futures ETN (BATS:VXX). Two years ago, VXX was $140. Today, it’s $35.
In that time, we saw the VIX go all the way to 87. Yet, the VXX is still down 75%.
VXX past two years, courtesy of stockcharts.com
Over that same time period, UVXY is down $342, good for over 85%.
So, yes, there are other ETFs losing money. But UVXY is the one that’ll give you the most bang for your buck – which is why we’re trading it.
Want to know how to spot our next trade? Then listen up…
First off, I’m so happy that our trade on the Invesco S&P 500 Equal Weight ETF (NYSEARCA:RSP) worked out for you.
Our return on this trade may not have been asymmetrical – we recorded a 36% gain – but it was still a win nonetheless – congrats.
I’m sorry that you missed the instruction to close this call. Going forward, any and all trade recommendations that will be added to the portfolio – whether it’s to open or close a trade – will be bolded…
And on its own line.
That way, you’ll never miss another Profit Takeover trade.
Which brings me to your question regarding the oil stocks I talked about this week.
In Wednesday’s article, I gave you the top three cheap oil stocks I’m watching right now. I even mentioned a particular trade idea on RIG.
None of these, however, were official recommendations.
Here at Profit Takeover, I like to give you the chance to take trades on your own as well – and I want to make sure that I arm you with the tools to do just that.
If I ever want to recommend a specific trade, however, I’ll make that clear (bolded, centered, and on its own line). So, no, none of the oil stocks I told you about this week will be added to the portfolio…
Yet, that is.
I’m always on the lookout for new profit opportunities. Just keep an eye on your inbox for your next trade recommendation.
And in the meantime, have a fantastic weekend,
June 04 2021