I have two sons. This morning, the younger of the two called me.
And when he calls that early in the morning, I know it can only be for one thing: trading advice.
He asked me: “I see a lot of insider selling going on right now with XYZ stock. Should I sell my shares?”
I immediately told him no.
And he came back with this one: “Well, don’t you think when these insiders sell, they know something we don’t know about what’s going on with the company?”
That’s when I had to break it to him: A lot of these insiders are clueless when it comes to the company.
There can be plenty of reasons an insider is selling their stock: Sometimes they get deals on the stock as part of their compensation package and they need to sell at a certain price.
Or maybe the guy’s wife wants him to buy a new house in West Palm Beach.
Or maybe he’s got his eye on a new yacht.
The point is not every insider sells their stock because they know something about the company.
“Tune out the noise”, I told him, “and continue doing what works.”
And what’s working right now — better than it ever has — is collecting premium by selling options.
I’m telling you, we could wrap up this quarter as being the highest payout quarter in terms of options premiums that I’ve ever seen.
Unbelievable. For example, a few days ago, I sold $1200 strike price calls on NVDA that expire tomorrow — that’s more than 20% out of the money!
Try It With These Tickers
You can do something similar as well without risking a dime. Paper trade it, or try this exercise.
These tickers are perfect to do it with:
- SMCI
- AVGO
- NVDA
It’s Natural
I’ll leave you with one final thought:
My son said two things as we were finishing up our call.
The first was, “You think this market’s over? Are we headed for a crash?”
The other was, “This is the most amount of money I’ve made in such a short amount of time.”
No kidding! I told him that everything that’s happening is natural. People are selling because things are gone up so fast. They want to grab some profit.
What’s not natural is how high these call premiums are. Collect that premium while you can!
Trade well,
Jack Carter
P.S. Here’s one strategy I use to pull premium from the market every week. Check it out.