Welcome to Trading Today! I’m Liz Brazeal, the Executive Editor – and I’m launching a completely new model in our industry to get you free, fast trades every afternoon.
I call it “open-source trading.”
Simply put, it’s a collaboration among our top trading experts: each one agrees to contribute a free trade every week. Those recommendations add up to the equivalent of a full, elite trading service – at no cost to traders like you.
To kick off this model, I’m bringing you recommendations from three of our top trading experts right now – Tom Gentile, Mark Sebastian, and Shah Gilani. (I’ll tell you a little bit about each of them, too, in case this is your first encounter.)
These are six-month options, so you can get in now, sit back, and watch 400% or 500% returns rack up over the next few months.
We’ll also be tracking them right here in our Trading Today open portfolio, so make sure you check in regularly.
Without further ado, then, let’s get to the experts and the money.
|Tom Gentile started his investment career in his parents’ house back in 1986, and in 1993 Tom and a group of partners founded Optionetics, an educational company that quickly established a stellar reputation in the field of options education. In 2009, Optionetics was sold to optionsXpress, and later still acquired by one of the world’s largest financial firms for $1 billion. Tom’s taught over 300,000 traders his option trading secrets in a variety of settings, including seminars, workshops, and sponsored events like “The Money Show.” Today Tom is a regular guest on CNBC, Reuters, and Bloomberg. He’s also a bestselling author of eight books and training courses. You can read his daily trade ideas and analysis on Power Profit Trades, and catch him regularly on Money Morning Live, as well.|
Tom’s Top Pick: HOOD Call Spread
Tom’s legendary options tools are showing a solid bullish trend in maverick retail investing platform Robinhood over the next few months – one that could bring you 400%, if you play it right.
Here’s a look at a screenshot from Tom’s proprietary charts:
The hype around the Robinhood IPO has some solid numbers behind it – including over $80 billion in customer assets from an impressive 18 million clients. After a loss in 2019, it flipped the chart and made $7.45 million in 2020. Between those two years, its transaction-based revenues also leaped 320%.
That’s all good news – and it’s largely thanks to the continued explosion of interest in retail investing (you know, from traders like you and me). In 2020, as you may know, retail made up 20% of all U.S. equity trading volume…and that trend is here to stay.
Even if the influx of new retail traders into the market slows down, Robinhood is already tapping into other lucrative markets – for instance, cryptocurrency and cash management. In fact, 4.4% of HOOD’s revenue came from crypto in 2020 – but by Q1 2021, that number was already up to 20.8%. And their fledgling debit card already has 3.4 million holders.
Perhaps most exciting, HOOD’s teasing an upcoming entry into the retirement account market. “We want to make first-time investors long-term investors,” says co-founder Vlad Tenev, and “are interested in building more accounts types, including IRAs and Roth IRAs.”
If Robinhood taps into even a fraction of the current $12.6 trillion U.S. IRA market – turning shorter-term traders into lifetime investors – HOOD’s positioned to grow into an unstoppable force.
Over the next few months, Tom’s tools predict 400% upside or more on HOOD – which isn’t really rocket science, even though Tom does have literal rocket scientists working on his programming team.
Tom’s choosing to play HOOD with a call spread (which he calls a “Green Loophole Trade”). He sends Loophole Trade recommendations whenever he sees a trading opportunity during times of high market volatility, which can increase option prices.
That’s because a Loophole Trade reduces your total cost, which in turn, reduces your total risk – a double win. If you’re a member of Money Calendar Pro, you can read all about how it works right here.
For this particular Loophole Trade, Tom recommends that you keep it open until you see the 400% or better gains that he expects from this trade.
Here’s how to get in:
|Action to Take: BUY-to-OPEN HOOD Jan 21, 2022 $75 Call (HOOD220121C00075000) and SELL-to-OPEN HOOD Jan 21, 2022 $100 Call (HOOD220121C00100000). Pay no more than $5.00 Enter as a Good-til-Canceled order (GTC)|
|Mark Sebastian, the Founder of Option Pit, is a former member of both the Chicago Board Options Exchange and the American Stock Exchange. He is also the Chief Investment Officer at the hedge fund Karman Line Capital. Mark has authored the popular trading manual “The Option Traders Hedge Fund” and the book “Trading Options for Edge.” He is a frequent guest on CNBC, Fox Business News, Bloomberg, and First Business News. He has been published nationally on Yahoo Finance, quoted in the Wall Street Journal, Reuters, and Bloomberg. Mark is Jim Cramer’s VIX Expert for TheStreet.com’s Real Money Pro and Mad Money on CNBC. In addition, he has spoken for The Options Industry Council, the CBOE, the ISE, The CME, and is a co-host on the popular Option Block Podcast and Volatility Views Podcast. Mark trades daily on Money Morning Live, and posts fast-moving daily ideas and analysis on Profit Takeover.|
Mark’s Top Pick: NOK Calls
NOK isn’t just a retro maker of indestructible brick cellphones anymore. In the midst of a five-month rally, the venerable telecom company gained 14.5% in July alone – in large part thanks to a comprehensive new strategy that includes forays into cloud technology and comprehensive 5G rollout.
They’re forecasting 2021 revenue of between $24 and $26 billion – well ahead of the original $23-24 billion guidance.
Nokia’s strong Q2 earnings (net sales up 9%) have also tipped Mark off to one of his most important metrics – low IV, or implied volatility. No matter what the stock is doing, low IV is a tipping point that options are going on sale.
Implied volatility shows whether the fear and uncertainty surrounding a stock is high or low, and it tends to inflate ahead of known catalysts like earnings. On the flip side, the rapid deflation after earnings (called an IV crush) can put options on sale.
When IV is low, that’s when you should buy options. Because no matter if you buy a call or a put, low IV can produce asymmetrical returns.
Mark has all the details here — for free – on how he uses implied volatility to build the perfect options trade.
The IV chart here is lining up with a perfect market climate and strong growth prospects for NOK, so this trade could very well shoot past the conservative 130%-150% we’re initially projecting.
Look for a nice slice of upside over the next few months as Nokia continues with their comprehensive high-speed internet rollout (and the nation faces the likely prospect of more work-at-home).
Here’s how to get in:
|Action to Take: BUY-to-OPEN NOK Jan 21, 2022 $6.00 Calls (NOK220121C00006000) Pay no more than $0.80 Enter as a Good-til-Canceled (GTC) order|
|Shah’s been “in the game” since 1982, when he launched his first hedge fund from his seat on the Chicago Board Options Exchange. He worked in the pit as a market maker and refined his knowledge of the credit markets on the trading desk of Lloyds Bank in London. He’s also a seasoned veteran of old-line New York and Boston investment banks and trading houses. Shah has helped his readers make a lot of money. He’s helped call hundreds of 100% winners on some of the biggest names like Amazon and Apple… but without paying Amazon and Apple prices. His trades are constantly outperforming the S&P 500, which means extra money in your pocket… not the pockets of Wall Street millionaires. Shah is a frequent guest on CNBC, Forbes, and Marketwatch, and you can catch him every week on FOX Business‘s “Varney & Co.” He also writes regularly (and for free) at Total Wealth.|
Shah’s Top Pick: TBF Calls
Shah’s tracking 20-year Treasuries right now, using one of the short ProShares ETFs.
This trade is a little complex, so I’ll let him explain in his own words.
Bond yields (treasuries) rose from January through end of March then collapsed back down. They’re headed back up.
The way to play rising yields is by buying an unleveraged inverse ETF like TBF.
TBF saw a 52 week high of $18.49 on March 18, 2021, then fell to a low of $15.88 in July. As of this writing, it’s now trading at $16.11.
As bonds sell off and yields rise back up to where they were in March, this inverse ETF will start rising too.
Buying TBF December 18 calls for only 15 cents is a great risk/reward play, where the upside could easily be 100%.
Even better…if TBF makes a new high at $19, the 18 calls will be worth at least $1.00.
If you pay 15 cents for them and can sell them for $1.00, that would be a better than 550% gain. Just saying!
You’ll want to get in this trade, hold on, and wait for those yields to rise.
Here’s what to do:
|Action to Take: BUY-to-OPEN TBF December 17, 2021 $18 Calls (TBF211217C00018000) Pay no more than $0.15 Enter as a Good-til-Canceled (GTC) Order|
Again, don’t forget that you can track all these picks right here in our open portfolio at Trading Today.
And watch your inbox every day at 1pm for another “open source” trade from one of our experts.
Executive Editor, Trading Today