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Put Options for Big Gains from a Loser Stock

The Big L.


Loser stocks are in the market every single day. Just yesterday, there were several stocks with big double-digit losses. Wrap Technologies (WRAP) down 13.00%, Paratek Pharmaceuticals (PRTK) down 12.22%, RAPT Therapeutics (RAPT) down 10.26% – and the list goes on and on.

Now, I’m here to show you how to make money on loser stocks. And I’m going to give you a loser stock right now that’s making money for traders in the know.

And I’m going to further give you a trade today to make even more money on this loser stock.

And no, I’m not going to get you to short this loser stock. That’s a tough trade – complete with bigger risks and costs. 

Nope, I’m going to show you how to cash in right now by simply buying the right put options on the right loser stocks.

And I’m giving you a loser stock to do this for a quick gain right now!

Now, to get you started, I’ve written a detailed primmer that you can download for free right now. It’s called 10X Your Stock Surge Gains. And you can read it right now here.

Here’s How My Loser Strategy is Working Now 

On May 27th, I wrote a Stock Surge Daily titled: Lever Up with Options.

I talked about how you can use options to turn small moves in a stock into big profits.

We looked at Deere & Company (DE), and I showed you this chart:

I was looking for the stock to move lower – a true loser stock!

But at $357/share, even a $30 move would only be a small win on the stock.

So, I recommended a put option.

Specifically, the DE Jul21 $330 puts (.DE210716P330).

At the time, that option was trading for $4.10.

As of yesterday, it was worth $7.30.

So even though DE stock has fallen by just 7.1%, the put option has a gain of 71.6%.

That’s 10X the return!

There was nothing complicated about this trade.

It was very straightforward.

Buy the put. Sit on your hands. And wait to take profits.

Additionally, your risk was defined.

This is one of the biggest benefits of put stock options.

At $410 per contract, that’s the most you could lose – even if Deere went to zero or somehow to the moon!

They allow traders to bet on a stock’s direction for a few dollars per share.

You don’t have to pony up tens of thousands of dollars like you would to get the same exposure from the stock by selling it short.

Is there a downside to options?


Downside Risk to Options

As we’ve mentioned previously, every option has an expiration date.

They are only good for a set amount of time.

So, the move you are forecasting needs to happen sooner rather than later.

Otherwise, the value of those options will decline – a concept known as “time decay.”

Personally, I think Deere has further to fall.

After breaking its 100-day moving average, the stock appears to be entering a Stage 4 correction. And you can see my analysis in the graph below:

I wouldn’t be surprised to see shares below $300 apiece before the end of the year.

But as usual, I like to sell into strength and collect profits along the way.

Once an option doubles in value (the DE puts were up 121% Monday afternoon), I like to sell half of my position.

This way, I’ve recouped the entire investment and I have “financed the trade.”

Whatever I get for the remaining contracts is pure profit.

Remember, stocks surge in both directions.

Don’t be afraid to bet on a stock going lower, especially if fundamentals are deteriorating and institutions are bailing out.

Stocks usually go down much faster than they went up.

Next Level Loser Trade for Deere

Now, the first put option trade that I presented to you on May 27 is working and should work further as I see the stock dropping further to 300 bucks or worse.

But to get a bigger gain on this loser stock – I’m recommending the September 300 Put Option on Deere expiring on September 17. They are trading currently around 6.45 that for the contract representing 100 shares of Deere would cost 645 dollars plus any commissions if any.

And I would plan to sell if the option price hits 12.00 for a contract value of 1200 dollars that would nearly double your money on this loser stock.

Loser stocks – you don’t want to own them – but you can cash in on them. And that’s what I’ll keep showing you how to do safely in my Stock Surge Daily.

A Stealth Trade Proposition

I want to let you know about my brand-new product called Stealth Trades.

As you’ve been reading my work – and I hope taking my lead on getting in on many profitable surge stocks in my Stock Surge DailyStealth Trades takes my efforts to the next level. 

In my Stealth Trades, I provide ongoing action lists of stocks to buy, trade and plenty of option ideas complete with more detail than I could ever do in just my daily email.

The folks at Traders Agency have come up with a deal for founding members of my Stealth Trades that is only available to readers of my Stock Surge Daily. It’s a special rate and only available for so many days. To learn more, and hopefully to subscribe – you should – or rather need to click here.

And to get more on surging stocks on the Stock Surge Daily watchlist as well as other stocks that I’m following, click here.

And again, for that primmer report: 10X Your Stock Surge Gains that details how to cash in safely with options – you can read it right now here.

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Ross Givens
Ross Givens

I bought my first stock when I was 12 years old. It was Microsoft. I’ve been a registered financial advisor. I’ve worked as a stock broker. I ran a managed fund. I was a Vice President at JP Morgan with Series 7, Series 66 and Series 3 securities licenses. I’ve been featured on Fox Business, CNBC, Bloomberg, and a bunch of other networks. The only thing I enjoy more than making money, is helping YOU make money.

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