Today’s Impact Money Trade

Dividend-lovers adore REIT Annaly Capital Management Inc. (NYSE:NLY) – and this big-money trader is one of those people:

Click To Enlarge

A customer bought the December $8 puts and sold the December $9 calls to create a classic yield collar.

See, this trader also owns the stock. NLY is an $8.57 stock that pays a huge $0.22 dividend, and this buyer wants to be around to collect that come December 29.

I’m not a dividend collector – it’s just not my style. I’m a trader. But if I was interested in collecting this dividend at the end of the year, then I’d be interested in buying the stock… and some puts to protect myself against any downside in the meantime.

But NLY isn’t the only impact money on my radar today. I’ve also got a trader’s stock to look at…

One that’s become a market juggernaut over the past few weeks: Merck & Co. Inc. (NYSE:MRK).

What’s this trader betting on – and should we piggyback it?

There’s a lot to like about MRK, from its dividend to its COVID pill. And this trader isn’t just long the stock – they’re long the $90-$100 call spread as well.

And I can’t blame them. I think that this thing is going to $100! And I’ve got a pretty good track record…

On Tuesday, I said that MRK options were too cheap:

Today, those calls are no longer under $1.70. They’re over $5:

MRK November 19 $82 calls, Oct22-29 from Yahoo!Finance

That’s over 200% in four days – and that’s an asymmetric return.

This morning, the stock is down just a touch. And let’s take that as an opportunity to get in again. The January $90 calls are about $2.25. And while MRK jumps to $100, these could hand you another 200% profit by January.

Want more asymmetric winners like MRK? I’m live every day in the Profit Revolution room, looking for stocks with low volatility whose options are too cheap, just like they were on MRK this week.

This is the same strategy that handed my Profit Revolution members the opportunity to make week-long profits like 108% on SOFI and 129% on FCEL.

I’ve got the ability to see the volatility on any stock on the market – and you can too.

Click here to learn more about this strategy…

And how you can become a Profit Revolution member today:

Mark’s Watchlist

I’ve got cheap IV, a weekend pattern, and a stellar earnings report to talk about today.

  1. Coca-Cola Co. (NYSE:KO)

After impressive earnings this week, KO got a nice pop – and implied volatility (IV), represented by the green line below, is dirt cheap:

Click To Enlarge | KO Oct 20-29 + IV

This is a $56 stock. But the December 10, 2021 $56 calls are only $0.89!

That’s an incredible deal – and it’s one I highly recommend jumping on.

  1. Apple Inc. (Nasdaq:AAPL)

AAPL’s report missed expectations big time. Tim Cook said that supply chain issues cost the company a massive $6 billion. And the stock opened down more than 3.5% this morning.

But get this – I’m still bullish. And this move works great for a pattern I’ve found on AAPL…

A pattern that sees AAPL get a nice pop on Monday mornings.

Get into AAPL on Friday, and sell it on the Monday pop for a profit – that’s a strategy I can get behind. And the November 5, 2021 $148 or $149 calls are catching my eye this Friday afternoon.

  1. Exxon Mobil Corp. (NYSE:XOM)

Unlike AAPL, XOM’s earnings impressed, beating estimates by two cents. I’ve been bullish on XOM ever since oil prices started rising, so this report isn’t surprising.

While the Nasdaq gets beaten up by AAPL and AMZN, stocks like XOM and Chevron Corp. (NYSE:CVX) are holding strong. And I’ve got both on my Watchlist today.

VIX Traffic Light

Red Traffic LightThe VIX was a little scared this morning – but I don’t see that fear lasting through the end of the day.

Apple earnings, Amazon earnings… the bad news for volatility is out.

And remember what I said on Tuesday?

The VIX reacts to the unknown. Not the known.

So I wouldn’t be surprised to see vol get smoked into the close today…

Ending the week around 15.

I hope everyone has a great weekend – and an even better Halloween.

Until next time,

Mark Sebastian
Founder, Profit Takeover


Leave a Reply

Your email address will not be published.