UHS News Trade Netted Well Over a 1000% Return on the Day
Well, it happened again. Today was another example of how to use and leverage the power of options. You can see we caught some news in our chat room, right from the News Desk. You can see the image below from our chat room and my trade alert. TWO minutes was all it took to get into that trade. The power of breaking news is clear. But, while many people are enamored by the big gains, clearly we need to remember that risk is at the front of every trade, and especially on breaking news plays.
Now, having said that, options premiums are a funny thing. When a stock starts moving right away, we can see the profit or loss update in real time. But, with news, the volatility of the actual content itself, takes a few minutes to be disseminated and included into the premium price of the options. This is often enough opportunity to enter the trade and profit from the spike in implied volatility alone. Now, if these options terms are confusing to you, be sure to read up HERE. Just like the blog yesterday on the sweet 33% return on NVDA intraday, timing and good risk management are what keep us around and in the money. Take a look at the video below, to see more details on how the trade played out. My single biggest regret is getting out at 100% instead of 1000%. Listen to that, doesn’t that sound crazy? Of course it does. Any trader should be just thrilled with a 100% return, not feel the need for greed and reflect back on that trade to see what they can do better for next time. Getting out too early is ok, when you are making 100% at a time. Thank you UHS and congrats to everyone in chat who snagged some!