It’s a new month and we’ve already locked in some gains.
This is a great way to start out the month as we look to stack those profits.
The Nasdaq continues to charge higher and trading at new all-time highs.
Investor's concerns are starting to relax as volatility eases.
The fear gauge for the S&P 500, known as the CBOE Market Volatility Index (VIX) is holding at 23.
Volatility is still elevated...
But is at the lowest level since the massive rally that started in March.
We’ve been seeing the U.S. dollar losing ground as gold futures soar higher hitting 2070.30 per contract.
Earnings season is winding down and investors have been surprised.
84% of all companies who have reported, beat consensus estimates, according to FactSet.
If you look behind the veneer, a lot of companies beat low expectations coming off the heels of the worst GDP drop in American history.
But when it comes to the financial markets; it doesn’t matter until it matters.
The only thing we can do is keep focused on making money from the best setups.
On Monday, we added our newest position:
Buy-To-Open the Cameco Corp. (NYSE: CCJ) Sept. 18, 2020, $12 call (CCJ200918C00012000) up to $0.35 per contract or better, for the day.
Sell-To-Close the IQIYI INC ADR (NASDAQ: IQ) Aug. 28, 2020, $22 call (IQ200828C00022000) at the market.
Right now, we’re holding:
- Nordic Amer Tankers (NYSE: NAT) Oct. 16, 2020, $5 call (NAT201016C00005000)
- China Mobile LTD ADR (NYSE: CHL) Aug. 21, 2020, $40 call (CHL200821C00040000)
- Box Inc. (NYSE: BOX) Aug. 21, 2020, $20 call (BOX200821C00020000)
- Cameco Corp. (NYSE: CCJ) Sept. 18, 2020, $12 call (CCJ200918C00012000)
Now we wait and let the market come to us.
And I’ll be keeping you updated every step of the way.
Your Questions, Answered!
The mailbag is full, so let’s get to your most pressing questions.
“The strike price you recommended for the CCJ September options is $12. But that’s $1.50 higher than the current stock price — shouldn’t we be buying options with a strike price lower than the current price? Alan M.”
When it comes to picking Hot Money trades, I always look for call options with a strike price higher than the current price of the stock.
That is because we are following what I refer to as sure bets.
These are big directional trades in the options market, and they are betting for a big move in a short amount of time.
If someone is risking millions of dollars on a bet that expires in 14 days or less, that's a very confident investment.
If that investment doesn’t pan out, they lose it all.
This type of activity allows us to place small size bets and that generate massive returns.
Call options with a strike price lower than the current price of the stock are known as in-the-money (ITM) options.
The deeper in-the-money (ITM) the option is, the more expensive the contract will be.
This requires more capital and not everyone has a $250,000 trading account as I do.
The trades I provide you in Hot Money Trader are typically less than $1.00 per contract.
That way no matter your account size, everyone will be able to trade at least one contract.
I'll never leave you hanging either, I'll always provide you detailed instructions.
Make sure you’re sticking to our limit prices on buys and sells.
That’s it for me today, be on the lookout for our next profit alert!
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