Success! Three for three on Beta plays
Today's Financial News - Posted February 25, 2009
It looks like we are onto a winner. If you have been following my Hot Stock Confidential beta trades, you know every single one of them has been profitable. Even in the teeth in one of the strongest bear markets in history, we are hitting home runs.
By Andrew Snyder, TodaysFinancialNews.com
Baltimore — (TFN): It is obvious are our government cannot keep its hands out of the world of business. Every chance it gets, the Obama administration is meddling with the free market and the nation’s economic future. Wall Street absolutely abhors the volatility the political uncertainty Washington has created.
Instead of being able to calculate a company’s value through mathematics and simple black and white formulas, analysts are forced to wait on political press releases and circular logic that creates nothing but volatility.
As a long-term trader, the volatility is absolutely nauseating. But as a quick, in-and-out trader, Washington’s manipulation addiction is a downright powerful ally.
Case in point… Just look at the recommendation I made on Friday when I told Hot Stock Confidential subscribers to buy Citgroup’s (NYSE:C) March 2.50 calls (CCY). After a week of contemplating the possibility of widespread financial-sector nationalization, traders pushed shares of the bank below the $2 mark. I knew all it would take is just a hint of positive action to send share prices jumping and the options soaring.
This week, the proof is in the numbers. As I write, the value of the options is more than 40% higher than when I recommended the trade. As I have said countless times over the past few months, this is not the time to be greedy. Take your gains of the table and sell your March 2.50 calls.
This was the third of our recent Beta strategy plays. So far, all of them have been extremely profitable. Not a bad record to start with.
Next Article: Where will your money be when the lights go out?
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