Yesterday, the trade war headlines were moving markets and today it’s about coronavirus.
We’re seeing the market pullback today, but this is coming after an eight-day win streak in the Nasdaq 100.
As we discuss every week, market volatility continues to be 2x the normal.
That means we will see these quick pullbacks.
But, for the last three months, we’ve seen the pullback bought and then rip higher.
I suspect the main-stream media will fear monger with virus cashes spiking.
I suspect we’re going to hear more about virus spikes for the next several weeks.
Today is a reset day — take a breath and a perfect time to sit tight.
We’re on a hot streak with closing 5 out of 6 trades as double-digit gainers!
That’s over 350% of REAL gains in the last month.
On Monday, we opened our newest position:
Buy-To-Open the Novo Nordisk A/S ADR (NYSE: NVO) July 17, 2020, $72.50 call (NVO200717C00072500) up to $0.70 per contract or better, for the day.
Those contracts are trading down 50% from our entry.
If you trade without stops, you could consider adding another third on this pullback.
Your Questions, Answered!
The mailbag is full, so let’s get to your most pressing questions today.
I joined Hot Money Trader today. As I read Bonus report 3: Swap Trade, it seems interesting and I would like to add those to my portfolio. I am using two trading platforms: Tastyworks and TradeStation. But none of them are available with two warrant symbols. Where or how can I order them? -Justin P.
Welcome to the club!
It doesn’t look like the Fed’s going to stop printing any more soon, which is why I believe those two plays are great investments.
Every broker is different on how they list warrants on their platform. If you contact the trading desk at TradeStation, they will be able to show you how to bring them up on their platform to purchase.
Let’s jump into the next question in the queue:
First, thank you for doing a great job!
I wasn’t fast enough to get into the FOXA put trade at 0.25 should I be chasing it? I was almost going to purchase it but stopped because you gave us a limit. If I did chase it what is the +/- percentage that would be safe? -Jim M.
The government restricts me from providing specific individual advice.
But, I can understand the frustration — I’ve dealt with it over the last 15 years in the market.
Your goal should always be to get a better fill price than what is listed on the buy alert.
I reviewed the time and sales for the day. There were orders that were filled at the limit price of $0.25, fifteen minutes before the market close.
There are a few factors why you may not get filled, but the main one could be your brokerage.
For instance, if you use Robinhood, you may not get your order filled at your limit price because the market may have moved by the time they routed it.
If you miss one, there's always another new trade right around the corner.
The final piece of reader mail for today:
Can you tell me more about the in/out of the warrants? If I buy a warrant and it does not go higher than the strike price, then I lose out. Is that correct and would I be able to cash it before the expiration date? also, where can I find more info on warrants? -Wayland L
Warrants are another type of investment vehicle.
Like options, they allow investors to reduce risk by risking a little that can generate big returns.
Warrants provide the holder the right, but not the obligation, to buy shares of a company at a specified price (strike price) before the expiration.
One of the differences between options and warrants is that a warrant is issued by a company instead of an option writer.
Warrants trade just like stock or options on an open market, so you’re able to buy and sell during cash market hours.
There’s not a lot of information out there about warrants.
They are not geared towards trading, but more for a 1 to 3 year investment time frame.
I’ve received a lot of questions and interest in warrants and how to profit warrants.
It’s something we may explore with creating an investment newsletter around a core portfolio of warrants.
If that sounds interesting, let me know.
With that said, I look forward to answering more next week.
If you want your questions answered next week, make sure you email it in today at [email protected]
Talk with you on Friday.
Joshua M. Belanger