With markets so uncertain, and so bearish as they’ve been lately, it’s imperative that traders know how to hedge their long positions with short positions. Shorting stocks, however, is risky. You expose yourself to unlimited risk and limited gain. On top of that, you generally need a lot of capital to short stocks in the first place. But with options, you can gain short exposure with limited risk…
If you’ve followed King’s Corner closely, you know all about my history… How I grew up as a kid with a knack for trading baseball cards… How I parlayed that knack into a trading job at the CBOE… How I almost lost everything I had there… And how I recalibrated on the other side of the world and made a fortune on the comeback…
This week was brutal. At the lowest point yesterday, the S&P 500 had dropped 3.7% since the start of the week… And the NASDAQ had dropped 4.4%. That was after the Fed took stocks to the cleaners on Friday. So, the question for us traders is: How can we stay afloat in this volatility? The answer is timing. Knowing when to act, and when not to, is a real skill.
What I do is probably simpler than any other trading strategy in this space. I watch unusual order flow from Wall Street elites, hedge funds, and institutions… And I mimic their positions. If they invest six digits or more in a specific option contract, I take the same exact trade and either put my own money into it or recommend it to you. It sounds simple… but it’s effective.
This takes Big Money trading to a whole new level… These bets expire in a matter of days, even hours — but when they hit, they hit BIG.
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