Profit Pregame

SL: AK AMA! Stop-Losses, VWAP, and More

Here’s what you wanted to know…

In case you’ve missed the memos, I’m going on the air twice a week in the Money Morning LIVE main room.

That means everybody’s welcome to join in, comment, watch me scan for live trade ideas…

…and yes, ask me anything.

Nope – that’s Kenny Glick! Check him out.

For a look at two of your top questions from this week’s chat, keep reading…

And bookmark this schedule so you don’t miss a single AK appearance on Money Morning LIVE!

 

Trader54, who must be one of my premium subscribers, had a question about “official” risk management parameters:

Whenever I send out an “official” trade signal – as opposed to a day trade or “unofficial” idea – I’ll follow up with instructions if and when I decide to close the position to curb losses (or avoid them altogether!).

And if targeting a 50% stop fits with your personal risk tolerance, that’s a very straightforward way to manage options positions.

That said, with very low-priced options, there will be times when they crater to a steep loss pretty fast – that’s simply the nature of high-risk, high-reward trades like these.

So if a position of mine collapses overnight to a 90% loss, for example – knock wood; oof – I’m likely not rushing to close it out and lock in big losses, to be honest.

Instead, I’ll hang onto a near-worthless option as a kind of “lotto ticket,” just in case the stock does explode higher before expiration.

If it’s between that and locking in a huge loss on an option that’s worth less than 50 cents, I know what my personal preference is!

But again, it’s all up to you and your personal risk tolerance.

Next we have Krull The Warrior King (strong name!), with a question about open interest…

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Actually, “open interest” refers to the number of calls (or puts) that have been bought to open at a specific strike and not yet closed out.

I like to track open interest levels by strike, because when daily volume activity is higher than open interest on an absolute basis, it means new positions are being opened.

It’s simple math, folks – you simply can’t trade more volume at a strike than currently exists without some new positions being added into the mix!

That said, open interest can also be used more broadly to discuss the number of contracts open on a stock or sector in general.

If you want to “ask me anything,” you can join me in the Money Morning LIVE main room Tuesdays and Thursdays at 11:30 AM Eastern.

Mark your calendar!

How I find the next big squeeze

Hot new stocks like electric vehicle newcomer Rivian (RIVN) have been the latest to shoot higher on Wall Street – but I’m not waiting around for a blockbuster IPO listing to find the next stock that’s ready to rip.

Instead, I’ve nailed down a strategy to help me find the hot names that the “retail army” is about to pile into… and send soaring “to the moon.”

I’m calling this meme-inspired trade strategy Super Squeeze Profits – and you can learn all about it right here.

 

Heavily shorted stocks have the potential to “squeeze” sharply higher – sometimes for just one day, and sometimes for days or WEEKS at a time.

And by maximizing that high-velocity short squeeze move with the leverage of call options…

Even individual traders can find ways to catch a piece of the unprecedented opportunities in this profit-ripe market.

See what Super Squeeze Profits is all about, then join me today.

You never know when the next stock is going to pop off!

Have a great Monday, guys – I’ll talk to you soon!

Andrew Keene

Founder, Profit Pregame

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