Trade Breakdown: Selling Apples I never had to deliver

Think back to November 15 — it was the week before Thanksgiving.

If you’re like me, you were probably planning for the upcoming holiday.

Running around buying things for your feast… and thinking about the fun you’d soon be having with family.

Well, during all that hustle and bustle, I managed to sneak away for a few minutes to place a quick trade that netted me an easy win.

Just for selling some Apple stock that I would never have to deliver.

How’d I do it? Read on…

Overview

If you’ve been following me for a while, you’ll know that I’m not a fan of directional trades.

Directional trades are when you think you see something in a chart that tells you the stock is going to go up (or down) and you place a trade to take advantage of that.

Maybe you buy the stock. Or maybe you buy an option.

The problem with that method of trading is that the stock has to move significantly for you to see any return.

And in the case where you buy an option, it has to make that move before your option expires.

If you’ve ever bought options, and you’re not REALLY good at what you do… you’ll know that options expire worthless more often than not. It’s just a statistical fact.

But the way I trade flips that on its head.

Because instead of being scared of options expiring worthless… it’s the basis of the way I make most of my trading money.

I sell a promise. A promise I’m pretty sure I won’t need to fulfill. And then I wait for that promise to expire worthless…

And when it does, I get to keep the money I collected for selling it. Simple as that.

Let me share the details of my AAPL trade with you so you can see how it works.

Trade Details Unpacked

The whole way I trade is based on trends. Everything I do is based on finding a strong trending stock before I do anything else.

But sometimes I get fancy and use other tools in addition to a trend.

In the case of this Apple trade, I have a database that shows me more than 10 years of history on AAPL.

And I knew that it would soon be going up.

So in order to take advantage of that — without placing a risky directional trade — I sold a promise.

A promise to buy AAPL if it fell down below $185.

With the stock then trading at about $189 — and with my knowledge that it had gone up on that date every year for 10 years — I confidently opened the trade with these parameters:

  • Sell to open AAPL, 24 Nov, 185 Put
  • Buy to open AAPL, 24 Nov, 182.50 Put

And I collected 25¢ for making that promise.

When the strike prices are $2.50 apart, then a 0.25 net credit is a 10% profit.

So How did it work out?

The day I placed the trade, AAPL fell about $1 or half of one percent from a high of $189 to $188.

But the next day it gapped up significantly — over 1.5% — and it continued higher each day from there.

It peaked at almost $193 the day before expiration before eventually settling at $190 at the close on the 24th. At that point it expired worthless.

But here’s the GREAT thing. With any other kind of trade, we might have been sweating… hoping for Apple to go up.

Yet, with the special kind of trade I use in this strategy, the stock can go up… it can go sideways… or it can even go down a little bit.

None of it matters, because I’ve collected my money right at the start of the trade.

The trade comes out a winner no matter what the stock does — as long as it doesn’t drop dramatically (a very rare occurrence), we’re golden.

So for this trade, I collected 10% all for placing a quick trade 8 calendar days before Thanksgiving and then letting it expire worthless on Black Friday.

Because of the holiday, it was a total of just 5 and a half trading sessions.

Conclusion

Now listen, I know that 10% may not sound like much…

But when you consider that some people wait an entire year to see 10% gains in their portfolio, you realize it’s pretty good for 8 days of work.

And here’s the thing. It’s not a one time thing — I do these trades nearly every week!

You know what they say about compounding, right? Albert Einstein called it the 8th wonder of the world.

And with good reason:
It may not sound like much, but when you stack 10% here… and 7% there… and 12% on top of that… Suddenly you’re stacking up some serious cash.

Big, fast, triple digit gains may sound like fun — but for my money, there’s nothing like small, consistent gains that you can stack week after week.

That’s how real wealth is built.

Trade well,

Jack Carter

P.S. I will be going live on Monday, March 11th to explain exactly how this strategy works. And to give you 2 FREE tickers that have historically skyrocketed in March — so they’re perfect for using this strategy on. Click here to reserve your spot now!

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