| For example, last week I opened a strangle trade on CarMax (KMX) The markets moved down, and the stock plummeted to $13. The put option I traded was up 270% and the call was down 98%. If you take those in aggregate, that put is up almost 3x. I closed the call side of the trade for a loss, but I more than made up for it 3x over when I closed the 270% gain on the puts. The KMX strangle trade ended up being a 37% overnight winner – even though the stock went down overnight. This is why hedges are so powerful. They allow you to profit no matter which direction a stock goes. The No. 1 mistake traders make in volatile markets During volatile markets, one of the mistakes traders make is they try to time it. You might hear traders saying "the bottom is in, everything's a discount, let's buy now." But that rarely works out in my experience. When I started trading on the Chicago Board of Exchange back in the 1990's, I was dealt with volatile markets almost immediately. It was right when the dotcom bubble was happening. Euphoria was at an all-time high. People were making millions – on paper. But when the dotcom bubble burst, I saw traders lose millions just as fast. I remember one particular trader was up more than $500,000 - only to be down $1.2 million when it all came crashing down. The truth is... wild markets can change a trader's fate fast. Which is why it's often a fool's errand to try and time them. Nobody in the history of the world has ever bottom ticked the market and bought at the low and sold at the absolute highest point. Sure, you might be right once or twice and then be wrong six times and your portfolio is completely blown up. YOUR ACTION PLANDon't make the classic amateur mistake of trying to time these wild markets perfectly. Instead, consider using hedges as a way to profit when the markets go up or down. If you want me to show you exactly how this strategy works, I'll be doing a live demo on hedges today at 2 p.m. EST. Here you'll get to watch me demonstrate how this trade works so you have total confidence you can execute it for your own trading. Click here to sign up today before it's too late.
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