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Trade Alert: Targeting 67% profits on Alibaba

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Trade Alert: Targeting 67% profits on Alibaba

By Jon Lewis

By Jon Lewis
Friday, May 28, 2021

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Today I'd like to share the details of a trade alert I sent out to my clients yesterday on Alibaba (BABA).

Want to get my next trade alert?

Simply click here ASAP – and you could start earning $2,561 in quick monthly income (or even much more).


This trade shows the amazing diversity of options strategies.

You see, typically, I look to SELL options for one simple reason…

When options prices are high (usually when IV – Implied Volatility – increases) that means people are willing to pay a big premium for what is essentially a ticking time bomb.

The option will only start losing value the minute they buy it.

It's bad for the buyer and good for the seller.

I basically just sold you a rotting lottery ticket that's going to begin disintegrating the minute you put it in your pocket…and you paid me a HUGE price for it…

…all in the hopes that you'll win big.

But sometimes the volatility and the over-priced options just aren't there.

This presents a different kind of opportunity (click here to see how to trade).

You see, if you can find a cheap option that's trading at an incredibly low volatility, then you can make money on the option as the volatility rises.

(Buy low, sell high… a novel idea, right?).

And that's what I decided to do with (Alibaba (BABA) recently.

You see, the company announced earnings on May 13th and the price began trending higher.

Yet, at the same time, Implied Volatility on the stock kept dropping (from 42% to 32%).

In fact, that put Implied Volatility on the stock at its lowest point on the year, with an IV rank of (-1%).

In other words – IV is scraping the bottom.

So, here's what I suggested my clients do…

We BOUGHT one Call option on BABA.

And we also SOLD one Call option.

This is called a "Debit Spread."

And it does a couple of really great things for us.
 

  1. By selling a call at the same time we buy one, the premium we receive from selling the call partially pays for the cost of the option we bought. So, we are able to get a much lower price. In this example, to buy a Call Option on Baba outright would cost about $700 per contract, but we were able to pay only about $30 – a 57% discount.
     
  2. It gives us as defined risk – we can ONLY lose the amount of money that we paid for the Debit Spread (in this case about $300 per contract). We cannot lose anymore than that.
     
  3. It gives us a defined maximum profit so we know exactly how much we stand to make. In this case, we will make a 67% return (or about $500 per contract) if the price of BABA is simply above $212.50 on July 2nd.

In other words – for 1 contract which is the minimum position size – you are risking $300 to make $500.

Go here to access my LIVE briefing to see this in action.

You can start using safe and creative options strategies. That means you don't need to "wait around" for the market to present certain conditions to start earning reliable cash-flow every month.

There is ALWAYS a strategy that will fit the market environment.

This is not the case with just buying a stock or an Index fund for example.

In that case – you only benefit if it goes up.

But with these simple, effective options strategies we can adjust to whatever the market is doing.
  • Is volatility high and the market is choppy sideways? You can generate cash.
  • Is volatility low, and the market slowly rising? You can generate cash.
  • Is volatility high AND the market is dropping? You can generate cash.

It doesn't matter – you ALWAYS have a tool in your tool belt.

This is what it means to take full control over your financial destiny and your cash flow.

And look – don't worry if you've never traded options in your life or even if half of what I said in this email sounds like Greek to you.

You can start using these simple income strategies – with just 10 minutes of "work" per week. And I'm going to show you how.

Go here ASAP to see how this really works.

I hope you enjoy your weekend.


Trade Wisely,
Jon Lewis
Jon Lewis



 


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