Wednesday Wealth Recap
- Financial freedom seems to elude a large part of the American population. Alexander Green explains a simple way to get out of this rut. (And you might want to pay attention… as your health and happiness could depend on it.)
- Google, Apple, Facebook and Amazon are grabbing all the headlines these days. But Nicholas Vardy points out that, outside of the U.S., there’s a parallel universe of tech stocks that are just as powerful… and profitable.
- What does it really mean to be rich? As Chief Income Strategist Marc Lichtenfeld explains, it’s not always big houses and fancy cars.
In The War Room, many of our biggest and fastest winners have been “Overnight Trades.” Here’s a quick breakdown of how our members have locked in huge gains, while limiting their risk, playing this strategy.
What Is an Overnight Trade?
Overnight Trades are plays that are entered right before an earnings announcement and exited right after the resulting price change. We’ve had enormous success with this strategy, as you can see from the table below.
By buying an out-of-the-money call option paired with an out-of-the-money put option, War Room traders are able to establish a position with unlimited profit potential to the upside while limiting any downside losses.
The goal is to profit off a big earnings reaction in either direction – up or down. When executed correctly, traders can profit off a sizable price movement without needing to know the direction. This is exactly what happened with Urban Outfitters (Nasdaq: URBN) last month.
One of Many Overnight Wins
First, I alerted members to an Overnight Trade on Urban Outfitters…
Then the company surprised Wall Street by reporting earnings of $34 million ($0.35 per share), which came in well above analyst expectations of a loss of $0.40 per share.
As a result, analysts rushed to upgrade the stock, which triggered the short-squeeze impact, pushing shares even higher.
You see, when you’re short a stock – and it’s moving against you – you cover your position very quickly. In doing so, you add to the buying, which extends the upside move even higher.
The very next morning, I alerted members to close their positions…
It was a gain of 200% overnight.
Here are just a few of the many reactions from War Room members…
“URBN, in at $0.98 out $4.20. WOW.” – Gary C.
“In $0.96 Call; expired Put order! Out at $4.85 = 505%!!” – Mal
“Good morning Bryan! 110%… nice way to start a day! Thanks! – New member Raymond G.
“In at $1.84; out at $4.25. Gotta luv it!” – Ruby
“URBN: 10 calls in at $2.02 and sold at $4.55. 125% gain for a total profit of $2,600.” – Sterno
Big Gains, Anytime
These Overnight Trades work in any market environment.
In fact, in a volatile market, they do especially well, as stocks make bigger moves.
During the initial turmoil of the COVID-19 crisis this year, from February 24 to March 31, we locked in a 93.67% win rate and an average gain of more than 17%.
Over that same time period, the S&P dropped nearly 20%.
We are simply on another level of trading in The War Room.
Yours in smart speculation,
Bryan
