While everyone else is screaming "Up, down, crash, correction, 2011, 2008, 2000, blah,blah,blah", we are busy taking advantage of the big swings in some of the stocks that have been clamoring for pullbacks. Thats the great thing about options. Despite the fact that most folks are long stocks in a 401k plan or some other investment, we can welcome and trade pullbacks via Put option - just like we have on Friday and today in stocks like Priceline Group(PCLN), Tesla (TSLA), and Baidu (BIDU).
Here is our trade in Baidu(BIDU) on Friday, where the $205 puts went from .22 to $3.69 in less than an hour. Or to put it in perspective, $220 into $3,690:
And our trade today, where the Priceline (PCLN) $960 puts went from .75 to $5.38 in an hour. Or to put it into perspective, $750 into $5,380:
I called for the S&P to hit 2k in 2014 and it did. I called for a small pullback in the S&P and it did, although it has slid below my target. Where are we headed from here? Stay tuned for an update tomorrow. Earnings season is also upon us and we will issue our first Earnings Playbook tomorrow for Gold members and above. With the current market volatility, it's important to be able to tune out the noise from those trying to get clicks, and tune into those trying to help you traverse the market.
Happy Trading!