The Double-Agent Strategy: Spying on Wall Street and Retail for Big Bucks
Forget FAANG, oil, and retail – the sector that took Wall Street by storm this year wasn’t any of the market’s old kings.
The top “sector” of 2021’s debut months was what I call meme stocks.
After millennial traders took to Reddit and Robinhood to push the price of GameStop Corp. (NYSE:GME) and other defunct names through the roof, this group of stocks clearly established itself as one to be reckoned with.
The trend was fueled by a collective David vs. Goliath mentality, “little guy” retail traders attempting to ban together to crush the fat-cat Wall Street short sellers.
And it worked… for a minute.
It didn’t take long before the bigwigs caught on. Hedge funds started watching the flow of retail money – your money – and profited off the same people trying to take them down.
But now, we’re getting ready to turn the tables. I’ve found a way to profit by keeping tabs on both groups: retail and Wall Street.
You don’t have to stalk online forums or keep your eyes glued to the business media’s headlines. There’s a reliable pattern you can follow – one that tracks meme stocks like GME – and today, I’ll explain the double-agent strategy you can use to spot your next big winner.
The Reddit Army Isn’t Your Road to Riches
Before we dive in, the first thing we need to establish is this: You aren’t going to get rich simply by chasing Reddit boards.
Of course, there are some people who bought and cashed out on trending stocks like GME or AMC Entertainment Holdings Inc. (NYSE:AMC) at exactly the right time in January. And while they successfully took over the hedge funds conspiring against them, they did it with pure and simple luck.
Which means their chances of a repeat performance are slim to none.
By and large, many of the Redditors who jumped in on GME’s way up in January weren’t savvy enough to time the top – or come even close – and wound up watching the shares fall back to earth in the first half of February.
Retail traders lost thousands, in some cases millions, on GME. But I’m here to ensure you won’t become the meme stocks’ next victim.
While copying other traders on Robinhood might get you a big win or two every now and then, odds are this strategy is more likely to blow your trading account faster than it takes to say…
Sebastian. Mark Sebastian.
OK, OK, so my name isn’t quite as snappy as James Bond’s. But you need more than luck to have longevity in the trading game – and I’m here to show you exactly how to generate consistent profits, building generational wealth with every win.
First up, you need to have a repeatable strategy that works more often than it doesn’t.
The trick is determining which of these trending stocks will be the exception. And you do that by being a double agent.
See, buzz stocks that go on to rally aren’t just being bought by Redditors. Dig a little deeper, and you’ll see that they’re also being bought by impact money. That’s big institutions with big bucks, like Goldman Sachs.
The big banks watched the flow of retail money into GME. And after a few hedge funds lost big dollars, they spun their strategy – and ended up banking even more on the upside.
It’s the side of the story that wasn’t reported by the business media. But if you’d spied on both sides, you would’ve raked in even more profits than the big bankers did.
The trick to spotting rallies with legs isn’t just by spying on David’s money. You also have to watch Goliath’s.
Specifically, you want to see if institutional dollars from hedge funds are buying options in the same direction as retail traders on Robinhood.
Because without those “impact” dollars, GME doesn’t go to $500, it goes to $50… if it’s lucky.
How to Spy on Wall Street – and Find the Impact Money
There are several ways to spot institutional money. TD Ameritrade, for instance, has something called a “Sizzle Index” available to all traders on the platform. This index screens for stocks seeing unusual options volume.
Essentially, when you see large block trades – I’m talking 10K or more option contracts traded in one fell swoop – you can usually assume you’re looking at “impact dollars” from Wall Street’s biggest institutions.
And you can use that secret intel to score a major winner.
Trade Alert is another potential resource for hunting smart money, like the 10,500-contract block of uranium company Cameco Corp. (NYSE:CCJ) calls seen here:
There are a lot of numbers there – but we’re looking at that five-digit 10,500. That signals that someone (or something) just bought 10,500 shares of the CCJ June 21 $20 calls. And if you follow that money, you’re about to have a profit coming your way.
You’re going to steal Wall Street’s cash right from under their nose.
When you find crossover between both Wall Street’s big money and retail traders, you’re locking in two-factor identification.
You know how sometimes when you’re entering a password on your computer, it’ll send a text to your phone as well? You put a secret, four-digit code into your computer, and voila – you’re in.
That’s because security is key. And just one password isn’t enough.
The same is true when it comes to trading. Except instead of securing your password, you’re securing your profit. You’re making sure what you get out will be bigger than what you put in – ensuring your return will be asymmetrical, just like Wall Street’s have been for years.
And similar to entering a password on both your computer and your smartphone, your trade needs to check two boxes:
- The stock is capturing retail trader attention…
- AND impact money from institutional investors.
This will help you significantly whittle down your watchlist and hone in on stocks with actual potential to go to the moon.
In 2021 alone, this two-factor strategy has helped me score some major winners – including a Berlin Wall-sized profit on AMC.
Earlier this year, the entertainment stock started gaining traction on Reddit – you remember the headlines, I’m sure. But AMC caught my attention before the business media caught on, because I’d been looking for unusual options activity.
I realized that AMC wasn’t just growing popular with retail traders on Reddit. I could see some big-league options activity going on as well… locking in that two-factor authentication and causing me to look deeper.
As you can see, there were a ton of options being traded. And when the numbers are that big, you know the money is coming from big institutions, not just retail investors. So after studying the charts, I bought $3.50 call options that expired in about one week.
Not long after, the shares began their now infamous ascent out of the stratosphere, and the value of my calls more than doubled in one day.
Even better, after taking profits on some of those calls, I let the rest of my position ride… just in time to catch the shares as they more than tripled overnight.
The media would have you believe retail traders were shooting this thing through the moon on their own. But Wall Street was watching the retail traders, pumping their own money in…
And I was watching Wall Street. Shortly thereafter, I closed the rest of my calls for a profit of more than 2,000% in just three days.
This was one of my biggest winners to date. But get this – you can do it again and again. This strategy is incredibly lucrative, but even better… it’s repeatable.
Take software company Palantir Technologies Inc. (NYSE:PLTR), which also started making noise in the Robinhood world in late January.
Again, I noticed that PLTR was also attracting institutional money by way of huge options activity. So I bought a few calls of my own.
PLTR stock subsequently enjoyed a one-day surge of more than 50%.
Remember, options give you leverage. And my own call trade turned that 50% gain into a 100%-plus asymmetrical return, more than doubling in less than a week.
By practicing two-factor trading, I’ve been making money in 2021. And now that I know this strategy works, you can too.
It’s time to become a Wall Street double agent… and rake in asymmetrical profits like you’ve never seen before.
Your only option,
Mark Sebastian
