No Friday the 13th scaries here – we’re wrapping up a stellar week.
I showed you how to play Robinhood’s vertical call skew…
Revealed a big impact money trade on TAL Education Group (NYSE:TAL)…
Explained a backdoor way to profit on clean energy…
And went live for an exclusive trading session.
Now, let’s spend Friday morning answering the top three reader questions of the week.
We’re talking Clorox stock, our RIG option, and UVXY.
First up, Oscar’s asking a question on everyone’s mind. When COVID first struck the U.S., Clorox Co. (NYSE:CLX) was one of the biggest winners.
Now… not so much. Year-to-date, this stock is down more than 17%.
The answer here is simple – because CLX has cost issues.
The cost of their inputs are increasing faster than they can raise prices. In addition, now that it has become clear COVID travels through the air, the demand for wipes and bleach has decreased.
I do think the stock is oversold and will run higher. So, I would be buying here.
But it is time to apply some reality to the world of bleach…it does nothing to curb the pandemic!
Next up, Anthony is checking out our portfolio – and he wants to know what’s up with our oil trade.
RIG has had real problems, there’s no denying that. It’s down 22% in the past month, and that’s why our call is struggling to stay above water.
But the Biden admin just asked OPEC to increase output to try and reduce oil costs. And if oil stays high, which it will, I still think RIG could take off.
Now, we aren’t straying far from the portfolio for our last question of the day. Albert’s wondering the point of our UVXY put:
Well, Albert, our UVXY put is not there as a hedge. It doesn’t technically “protect your portfolio.”
In fact, it does the opposite – it is a leveraged short position on volatility.
When I buy puts in UVXY, I am aiming for volatility capture, not portfolio hedging. That’s why we were able to secure two profits on the ETF already!
And that’s all for now – let’s kick off the weekend on this Friday the 13th!
August 13 2021