Editor’s Note: Yesterday, I went live to explain UVXY’s reverse stock split – plus, I showed you exactly how to trade it for big-money, asymmetrical profits. If you missed my presentation, don’t worry. You can catch a replay right here.
It’s time for another mailbag edition of Profit Takeover.
Every week, I answer a round of questions straight from readers. You can submit yours right here!
Remember – I’m here to help you take the financial power back into your hands.
That’s why I’m answering your questions raw, real, and unfiltered. When it comes to making you money, I’m not holding back.
And every one of the questions I’m answering today will put you on the path toward asymmetrical returns.
Want a sneak peek? We’re talking about covered calls…
Verizon’s stock movement…
And how you can find impact money trades on your own.
So, let’s get started…
I do have some criteria for selling covered calls – generally speaking, there are three points I look at.
First up, the yield to call away – if I sell a covered call and my stock gets called away, how much will I make on the trade? For a 30-day covered call, this should be in the 5-10% range.
Secondly, when the call that I sold gets below $0.10, I buy it back.
Finally, I want to make sure I am collecting enough dollars that it’s worth it. Typically if the call isn’t at least $0.50-$1.00, I am taking a pass.
Covered calls are a great, low-risk strategy to help out your stock positions. And next week, I’ll take a deep dive into the how-tos behind this options strategy. Stay tuned.
Last week, we added to our position in Verizon Communications Inc. (NYSE:VZ) after Warren Buffett significantly upped his stake in the telecommunications company.
Since then, however, VZ has yet to make a big move to the upside. And George wants to know why:
Warren Buffett isn’t an option trader like us here at Profit Takeover – not when it comes to this Berkshire Hathaway position, that is. He’s in this one for the long haul, which is why we went all the way out to September on these calls.
The reason VZ hasn’t shot up yet is its biggest competitor, AT&T Inc. (NYSE:T). See, T is a pretty poorly run company – and right now, its price performance is polluting the whole telecom sector.
But it won’t be that way for long. Once T stabilizes, VZ should begin its path back up. Today, the stock sits at about $56. But before our calls expire, I’m looking at a jump to $65. That’s a 16% increase that our call options will leverage into an asymmetrical return.
Multiple times a week, I bring you impact money trades.
See, every day, I dive into the market searching for big, institutional money moves. Essentially, this means that a big institution is dumping money into a single trade, buying up hundreds of thousands of contracts in anticipation of something big.
Another word for this is unusual options volume. And it’s the key to finding two-factor authenticated trades.
Now, Godfrey wants to know how he can find these impact money numbers on his own:
You don’t need to work on Wall Street to track the “smart money.”
I use a global markets company called Trade Alert, which provides real-time alerts and analysis tools to traders like you and me. Now, a subscription costs money, but if you get one, there are certain codes you can use to find big or unusual trades.
The codes I use a lot are /uvol and /top. Trade Alert makes it easy to hunt big-volume trades like the ones I bring you here at Profit Takeover.
Now, you don’t need to spend money on Trade Alert – I’ll send you any trade-worthy names for free, right here to your inbox. But it’s a great tool if you’re interested in learning more.
Want to see your question featured in Profit Takeover? Then click right here and send me a message.
Until next time, have a great holiday weekend,
May 28 2021