Option Trade Nets $3k From a $70 Investment in Less Then 24 hours

silver-bars

If you ask any savvy market professional, they will tell you Option Trading is a losing profession and that roughly 90% of all option traders lose money. Option trading is very risky, but with the large risk, comes large rewards.

Take for example our trade on DUST (Direxion Daily Gold Miners Bear 3X Shrs). We have been bearish on Gold and Silver for the past 2 months and saw an opportunity to get ahead of a flush we were talking about for sometime, with Big Ben Bernanke's comments as the catalyst. We chose DUST (Direxion Daily Gold Miners Bear 3X Shrs) as the vehicle to profit from the drop as the 3x Bear ETF's have the best potential to reward option traders. We added multiple positions near the end of the day to include the $114/$120/$125 June calls that expired in 2 days.

With Gold down over 5% overnight and Silver down over 8%,  DUST (Direxion Daily Gold Miners Bear 3X Shrs) gapped up $16 and opened at $120.03, moving as high as $132.38 , tcausing the $125 options we had purchased for $70 to be worth over $3800 in less then 24 hours. Later in the day we sold the calls for $7.50,  a nearly $3k profit on a $70 investment.  We also sold our other positions we were holding(screenshot below).

Entry:

06/19/2013 15:38:28 Bought 2 DUST Jun 22 2013 125.0 Call @ 0.15
06/19/2013 15:40:31 Bought 2 DUST Jun 22 2013 125.0 Call @ 0.2

Exit:
06/20/2013 15:52:40 Sold 4 DUST Jun 22 2013 125.0 Call @ 7.5

DUST 125 calls - small

 

 

DUST 6-20

 

Not the best trade we have done this year via options, where Netflix(NFLX) calls netted us $75,280 from $483, but not too bad.

 

As a side note, please understand trades like these do not happen everyday, but they do happen. And the have happened quite often at Optionmillionaires.com. Just check our calls on LinkedIn(LNKD) , Boston Beer (SAM), Netflix (NFLX), BlackRock (BLK), SodaStream (SODA), and many others.

Happy Trading!

Profile photo of jimmybobJimmyBob (Scott)has been trading equities for over 15 years, a majority of which were OTC micro-cap stocks. He started trading high risk stock options over the past 7 years, and has proven winning trades in excess of 15,000%.

As one of the Co-Founders of optionmillionaires.com, Scott enjoys sharing his knowledge with other investors through timely blog posts, daily watch lists in the forum, weekly webinars, and helpful advice within the chatroom.

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