New Trade Rec to Play the “Airline Rerun”
Last weekend, more than two million people were screened at U.S. airports – the highest number since before the COVID-19 pandemic.
The return to normal isn’t just a pipe dream anymore. Every day, we’re seeing evidence that it’s the reality.
Airline travel is being propelled right now by “domestic leisure” – AKA people like you and me finally heading on the vacations we had to reschedule last year.
What we haven’t seen resurface quite yet is business and international travel, as many companies are sticking to remote work and some countries’ borders remain closed.
But to me, that just means one thing: the airline industry has even more room to grow from here. That two million number, in fact, is still 545,000 less than the same day in 2019.
And today, we’re jumping on that growth, leveraging my favorite airline stock into an asymmetrical return by mid-August – plus, we’re exiting a trade set to expire on Friday.
Now, before we get to our newest portfolio addition, it’s time to take one off the books…
And that’s the CME Group Inc. (Nasdaq:CME) June 18, 2021 $217.50 calls.
We put this trade on back at the end of May as a backdoor way to trade the crypto craze. But today, it’s down over 50%. And with just two days until expiration, it’s time to exit this trade and focus our energy towards another one.
Here’s what to do:
Remember – we target low-risk, high-reward trades. Meaning when we lose, it only takes one more winner to wipe that loser out.
And we’re looking at another potential win with today’s trade…
It should come as no surprise that we’re using American Airlines Group Inc. (Nasdaq:AAL) to play the airline rerun. We’ve already taken a 100%-plus profit on this stock…
And now, we’re getting ready to do it again.
Remember – if this trade does not fill at or below the $1.75 limit price by market close on Friday, it should be canceled. If this trade does fill, you can track it right here on the Profit Takeover portfolio.
I see AAL heading to $25 by this option’s expiration – turning this trade into another asymmetrical profit in no time.
Going Live: Tomorrow, June 17 at 2 PM
Friday is quadruple-witching day.
That means we’ll see four types of contracts expiring in one day: single stock futures, stock index futures, stock index options, and single stock options.
This only happens four times a year, in the last market hours of the third Friday of the last month of each quarter.
But don’t let the eerie name fool you. Quadruple-witching day isn’t scary… it’s a profit opportunity.
Trading volume tends to shoot higher on days like Friday. And when volume is high, so are the chances to make money.
So, on Thursday at 2:00 p.m. ET, I’ll go live right here to show you the best trades to play Friday’s expirations. You don’t want to miss it – be sure to bookmark this page.
Today’s Impact Money Trade
Check out the big money flowing into Citigroup Inc. (NYSE:C) today…
Click To Enlarge
I’m seeing quadruple-digit contracts here on the bank after the stock dipped on this morning’s open, 6% lower than yesterday’s high.
But this buyer is bullish on C. They bought the January 2022 $82.50 calls and sold twice as many $90 calls to lower their cost of entry all the way to $0.16, making for a cheap trade that you can easily piggyback if you’d like.
Call spreads are a great way to cut your risk without sacrificing reward – and it’s a strategy I’ll dive even deeper into in the coming weeks.
Mark’s Watchlist: Oil Stocks
Yesterday’s Watchlist theme is continuing into today.
Oil prices rose even higher yesterday, settling at about $72.12 per barrel for a 1.55% jump.
And as oil prices rise, so will these stocks:
- Energy Transfer LP Unit (NYSE:ET)
A recent favorite of mine, ET shares are up more than 3% over the past five days. But at $11.28, this stock still has room to run as oil prices rise. If oil heads to $75 a barrel, then this stock is headed for $15 a share.
- Exxon Mobil Corp. (NYSE:XOM)
At $64.48 per share, XOM is a pretty penny more than ET. But as one of the world’s largest publicly traded oil and gas companies, XOM stands to gain from oil’s rising prices. It’s already gained 56% in 2021, and with second-quarter earnings expected to top analyst estimates, this stock’s got multiple drivers pushing it higher.
- Transocean Ltd (NYSE:RIG)
RIG is another cheap favorite of mine, running for $4.22 as I type. Because it’s cheaper, it has even more room to run than XOM. It’s easier for a $4 stock to double than a $64 stock, right? And RIG is on its way to doing just that, up almost 82% year-to-date.
- Petróleo Brasileiro S.A. (NYSE:PBR)
It’s two days in a row on the Profit Takeover Watchlist for PBR, the Brazilian petroleum company that sits higher again today. Yesterday, I gave you a trade idea on PBR. And I’m still bullish on this name as oil prices continue to rise.
VIX Traffic Light
It’s here, ladies and gents – VIX settlement day. The day that will bring the VIX even lower than the low levels we’ve already seen the past few weeks.
Now that June options on VIX have expired, we should see the indicator at around 16.50.
And that’s exactly why my VIX light is once again red today, as the VIX heads to sub-15 levels by the Fourth of July.
Have a great rest of your day. I’ll see you live tomorrow at 2 p.m.
June 16 2021
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