Before we log off for the holiday weekend, I have a fresh round of Ask Me Anything questions straight from our Profit Takeover readers.
And personally, I think the following questions are the best way to arm your trading arsenal before the market closes for the next three days.
Today, we’re chatting about lowball option contracts…
Exiting our VIAC call
Remember – you can always ask me anything right here on the Profit Takeover website. And I’ll do my best to reply to all of your questions.
So, without further ado, let’s get to it…
First up, we’ve got a great question from George regarding an option trading strategy…
Hey George – this is smart thinking.
As long as the story hasn’t changed on the underlying stock – and as long as you’re still bullish or bearish, depending on whether you bought a call or a put – then buying lowball option contracts is a great strategy…
Especially if you’re targeting asymmetric returns.
However, you have to be careful. If the option keeps dropping, you don’t want to keep piling in more cash. You could end up losing a ton of capital that way.
Really, it all depends on how confident you are in your trade. But if you think your trade is still a winner, despite falling 50%, then this is a great way to double down for cheaper.
Here’s one thing that’s important to ask yourself – are you adding to the trade or averaging down?
If you’d still buy that option – even if you hadn’t made the first purchase – then you’re adding to the trade. And that’s a strategy I like.
If you’re only buying the second option to lower the cost, well, that’s averaging down. And I hate that strategy.
Now, let’s take a deep dive into the Profit Takeover portfolio…
I love questions about our open Profit Takeover portfolio. That’s where we’re putting the trading strategies I tell you about to work – and as you can see with our VIAC call, it’s working.
Looking at the portfolio, however, we recorded a $4.00 entry price on this trade. And we’re targeting asymmetric returns – that’s over 100%.
So, I’m not seeing the same 120% profit as you. That must mean you got into this trade for even cheaper – congrats! But I can’t give you any personalized trading advice on whether or not you should sell.
That said, this trade does look ripe with profit. So, let’s exit now ahead of the holiday weekend.
Here’s what to do…
And now, I’ve got a brand-new trading opportunity to tell you about…
Clearly, Peter’s seen Money Morning Live.
VWAP stands for Volume-Weighted-Average-Price. It’s an indicator that tells you the average price a stock has traded at throughout the day based on volume and price.
And according to Money Morning Live co-host Kenny Glick, it gives you “the only trade you’ll ever need.”
Now, I’d like to argue with him. I’ve spent my years as a trader studying the VIX. But Kenny says the VWAP is the indicator of all indicators. And he’s got the proof to back it up.
But don’t take my word for it – see for yourself.
Kenny just launched his own newsletter, This Is VWAP.
Every day, he’ll send you the top VWAP trades to help you become a successful day trader.
Click here to get all the materials you need to master the art of VWAP domination!
That’s all for now, folks. Have a great holiday weekend – you deserve it.
June 30 2021