Markets started to thin out quickly after this mornings open as most headed out early to get the most out of the extended weekend.
As the old trading floor saying goes, "You never short a dull market."
This saying has footing because there’s a natural drift higher in the overall equity market.
This drift happens because of how money flows into the marketplace and a lack of participation, which is why we likely saw a complete reversal from last week’s decline.
Today is the last day of trading for August, but the fear gauge, known as the CBOE Market Volatility Index (VIX), for the S&P 500 continues to be around 18 — which means we will continue to see swings of 1% in either direction.
The S&P 500 will close the month around the same prices we saw on Aug. 1, creating a tight 4% range.
This yo-yo market action has made timing trades more difficult.
However, once again Hot Money was ahead of the headlines again and sold into the news for a huge gain in your CNH Industrial NV (NYSE: CNHI) Sept. 20, 2019, $10 calls.
Prices spiked higher on Thursday after it was reported that the company could look to spin off its Iveco unit.
Hot Money was able to get in front of the news again, prompting some readers to bank gains as high as 100%!
I bought 40 CNHI September $10 call option contracts per your recommendation on Aug. 20 @ 0.25 per contract and sold all 40 today @ 0.50 per contract.
Thank you for the reco.
- Michelle W.
Market winds can shift quickly, but we are nimble enough to adapt and continue to thrive and take home winners.
We must stay the course, block the noise and focus on the next trade.
Let’s talk about our newest positions for this week.
On Tuesday, we bought to open Barrick Gold Corp (NYSE: GOLD) October 18, 2019, $22 calls up to $0.48 per contract.
We've continued to see Hot Money roll up their profits into higher strikes in gold and silver names.
With the increased volatility in the market, it’s an inexpensive way to play for a big spike in precious metals with 49 days to expiration.
On Thursday, we sold to close the CNH Industrial NV (NYSE: CNHI) Sept. 20, 2019, $10 calls for a 100% gain.
Right now we’re holding Barrick Gold Corp (NYSE: GOLD) October 18, 2019, $22 calls.
Reason: Smart money was active in call options in multiple expirations at the $10 strike. There was a strong focus on the September expiration, which provided us context on when they thought the move would occur.
Outcome: Exited for a profit of 100%
Improvements: We executed as planned and took our profits into strength on the pop higher. Our timing could have been ideal since the contracts traded down to 10 cents, but we only know that in hindsight.
My team and I will have a new trade for you on Tuesday.
To your wealth, freedom and options!
Joshua M. Belanger
Joshua Belanger is founder of CounterVest and the editor of Hot Money Trader. He has been providing ordinary investors blockbuster returns since 2008. In 2018, the average return of Hot Money Trader beat the markets by over 15%