Mega-Leverage on FAANG? Here’s How…
One of the main reasons I love playing low-priced options is the leverage.
That means I can put out a relatively minimal amount of cash upfront to buy the option contract…
And then potentially collect returns of 100% or even more if the trade plays out in my direction.
That’s the kind of upside potential that can help to offset the inevitable losing trades that everyone encounters along the way – plus, it’s just fun to lock in big winners.
So when a trade designed to triple-leverage one of the biggest ETFs in the market lit up my scanner, you know it grabbed my attention…
To find out exactly how this trade went down, plus the Meme Stock of the Day that landed on my watchlist, keep reading.
Where’s the money?
Check out this huge flow in call options on TQQQ that lit up my scanner:
I mean, way over. TQQQ opened around $130 today, loading up about 10 points of intrinsic value into these $120-strike calls.
So, while this was quite a bit too rich to be an “official” signal for my subscribers, the flow here definitely caught my eye.
If you don’t know, TQQQ is a triple-leveraged version of the QQQ – the exchange-traded fund (ETF) that’s dominated by Big Tech names like Apple (AAPL), Microsoft (MSFT), Amazon (AMZN), and Tesla (TSLA).
That means TQQQ is designed to deliver 3 TIMES the returns of the Nasdaq-100 Index (NDX) – the underlying index for QQQ – on a daily basis.
In other words, those super short-term TQQQ calls are a mega-bullish bet on FAANG names… and the big money players are throwing down for them!
How do I get some?
To play along with a vehicle like TQQQ, I’d recommend that options traders tread carefully – especially those who are new to the game.
These types of funds are designed to triple-leverage returns on a daily basis, and holding periods longer than that can result in some surprising deviations from what you might expect the “math” to be.
It’s not super exciting advice, but ALWAYS read the prospectus, folks! Understand what you’re trading.
And if you decide to take a flyer on an uber-leveraged vehicle like TQQQ calls, play it the AK way with lower-priced (i.e., sub-$1.00) options.
That helps to limit your total capital at risk when you take a flyer on this kind of extremely speculative play.
My scanners have been on fire lately…
I’m not exaggerating when I tell you that using my scanners to follow the smart money on Wall street has been the most profitable and consistent trading strategy I’ve come across in more than two decades as an options trader.
And it only seems to be getting better as we go.
In fact, since August 5, 2021 I’ve recommended and closed 15 different trades to my
Project 303 subscribers – and only
ONE of them lost money (a measly 10%, at that).
If you’re not already a Project 303 member, you’re missing out on this incredible hot streak. But you don’t have to…
Spots are available now for you to join Project 303 and get in on the action of our Live Trading Room – where you’ll have the opportunity to receive my trading recommendations and ask any questions you have in real-time.
Ready to experience the power of Project 303? Click here to learn more…
Also on watch…
Check out the unusual volume on this meme stock name, fintech stock TIGR, straight off the scanner:
The flow was skewed toward puts as TIGR fell about 21% on the day, and I’ll keep this on watch for day trade signals.
These types of “meme” names can move fast & furious on heavy volume, which is ideal for my low-priced options strategy.
Add this one to your watchlist, too… TIGR keeps coming back into play!
I’ll be in touch with more soon, traders.
Trade safe out there!