Picture this – you’re walking down the street and then suddenly grind to a halt. Standing in front of you is one giant mass of people.
You might wonder… “what the heck are they waiting for?”
Because typically, a large crowd means there’s some big event that’s about to happen.
Well, that’s also true in the stock market. Bullish and bearish sentiments can actually predict any stock’s next move.
And you can use that sentiment to turn double profit after double profit, all in a matter of days…
Make a Fast 100% Profit by Using Weekly Option Volume
You know that I’m always on the lookout for quick profits.
With these weekly options, the stock only has to move about 2% for your money to double.
Now, the pundits on CNBC or Bloomberg are always talking about “volume spikes.”
You might even hear them say something technical like, “Option volume on XYZ calls spiked up 300% to 25,000 contracts,” followed by a recommendation to buy XYZ calls.
But what they never tell you is what all of this actually means.
And we aren’t ones to just accept whatever the talking heads say.
Basically, all this mumbo-jumbo just means that more people are buying XYZ calls – causing the volume to spike and the number of contracts to go up.
The idea is that when the big money knows or believes that a stock is about to make a move, they will bring big dollars to an option trade for a profit. If they believe that the stock is poised for a move up, they will buy call options in large quantities. If they believe it’s moving down, they will buy – that’s right – put options.
Of course, people are only going to spend big money on options if they think the stock is about to move in a particular direction.
So, the strategy breaks down like this:
- Volume spike in calls, go bullish.
- Volume spike in puts, go bearish.
- Use weekly options (1- 2 weeks).
Let’s take a look at an example…
On January 2, 2019, these were the stocks with the highest call option volume spike:
Each of these ten stocks had call option volume spikes of at least 111%, as shown under the “Change (%)” column. But the stock with the biggest volume spike was at the top of the list: American Express Co. (NYSE: AXP).
Over the previous five days, AXP’s average volume of calls was 4,895. But on the day of the scan, its volume was 24,480. That’s a 400% spike over the average!
Obviously, bullish sentiment overflowed on AXP during the first trading day of 2019.
The following graph shows call and put volume. Give it a look – it’s easy to see the bullish sentiment on AXP:
It’s clear that the bias here is bullish. Call volume is at 24,480 – completely eclipsing put volume of 4,067.
Now, if you had just looked at the AXP chart, the upcoming bullish run would be a lot less obvious…
But the fact that volume on call options was a whopping 20,000 contracts higher than put option volume means that a bullish run may be imminent. And the best way to play this upcoming bullish rally?
Buy a weekly option that expires in one to two weeks.
On January 2, 2019, the AXP Jan 11, 2019 $97 Calls (9 day options) could have been purchased for $1.00. For control over 100 shares, that’s $100 per contract.
Six days later, on January 8, AXP was trading 3% higher…
And our call options more than doubled.
Now, no system is accurate 100% of the time, and this one is no exception. But it has a great track record of giving a solid directional edge that yields quick, short-term doubles.
I mean, of the 10 stocks that my system gave me on January 2, nine of them (highlighted in yellow) turned into winners. Here’s the list again:
See what I mean? With option volume spikes, it’s simple to double your money in just a few days.
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Source: Power Profit Trades