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Are you prepared for the very real possibilities inherent in the current market’s wild volatility? As I sit to write to you, the Dow Jones Industrial Average has finally broken down through the bottom of its recent trading range. The talking heads’ precious 13,000 is now history, and not in a good way.
Is this the end for the Dow? Not necessarily: WaveStrength trend studies reveal that we could still see 14,000 within the next eight weeks. But risk is increasing daily, and if you want to be on board if and when this rally comes to pass, you absolutely must find a way to factor out volatility.
Two weeks ago, I recommended via a special TFN White Paper that you match one middated put contract, specifically the December 133 puts (DAW XC) against 100 shares of the Diamond Trust (DIA) as a proxy for the blue chips of the Dow.
On August 1, 100 Diamond shares closed at $13,341, while that hedging Diamond put would have cost you $530. As of midday yesterday, your shares were down to $13,039, a loss of some $302 or about 2.26%. But these puts have picked up $180 for a gain of nearly 34%. Add it all up and this basket is down a mere 0.88%!
To execute a similar tactic right now, you would balance $13,021 worth of Dow Jones Industrial shares by purchasing one DIA December 128 put contract (DAW XX) for approximately $590. Should the Dow drop to 12,050, this option would increase some $400, a 68% gain that would cut your losses nearly in half.
Should the rally recommence tomorrow, any losses incurred prior to selling this put contract would be dwarfed by your blue-chip gains. And as always, select deployment of call option contracts would magnify that upswing tenfold.
Adam Lass
Market Analyst, WaveStrength Options Weekly
How’s This for Amazing Gains?
FedEx October 100 Puts…………..…. 122.22%
Pfizer January 27.5 Puts………….…... 221.21%
Dow Chemical June 40 Calls…….….... 167.80%
Target January 50 Calls…………......... 131.91%
Weyerhaeuser April 2007 65 Calls….... 456.76%
Caterpillar November 65 Puts………... 215.00%
These are just some of the gains Adam Lass has posted with his service, WaveStrength Options Weekly... one of our best-performing trading services you shouldn't miss out on.
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Please take a few minutes and learn how you could get in on gains like these -- at a special low rate -- in this exclusive report. Committing just 10 minutes per week to this system could mean turning a small amount of $1000 into $79,985!
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