In fact, today we’re actually going to talk a little bit about hedging bets, the pros and cons of doing so, and what it could mean for your trading and/or investment career.
While buy-and-hold investing can be considered boring and high-risk to many individuals, long-term investment strategies aren’t limited to buying a stock or shorting a stock, holding it for two years, and closing out.
|Ticker Code||Ticker Name||Ticker Industry||Price Change||Average Volume (50)*|
|DIS||Walt Disney Co||Entertainment||8.50%||20,703,021|
|WYNN||Wynn Resorts, Limited||Resorts & Casinos||24.38%||7,145,359|
|RHI||Robert Half International Inc.||Staffing & Employment Services||16.41%||1,935,641|
|NCLH||Norwegian Cruise Line Holdings Ltd||Travel Services||8.67%||42,851,645|
|PG||Procter & Gamble Co||Household & Personal Products||1.93%||11,776,921|
|LUV||Southwest Airlines Co||Airlines||-39.92%||21,773,773|
|BABA||Alibaba Group Holding Ltd – ADR||Internet Retail||1.02%||16,633,716|
|F||Ford Motor Company||Auto Manufacturers||0.82%||102,699,950|
|DSS||Document Security Systems, Inc.||Specialty Business Services||97.77%||7,834,881|
|COST||Costco Wholesale Corporation||Discount Stores||6.51%||3,655,699|
|MARK||Remark Holdings Inc||Internet Content & Information||58.06%||22,032,224|
|AAPL||Apple Inc.||Consumer Electronics||16.28%||42,131,255|
|BA||Boeing Co||Aerospace & Defense||-15.93%||40,570,122|
|SHOP||Shopify Inc||Software – Application||42.31%||3,906,923|
|GRUB||GrubHub Inc||Internet Content & Information||9.27%||3,413,292|
|ETSY||Etsy Inc||Internet Retail||49.81%||4,416,265|
|DAL||Delta Air Lines, Inc.||Airlines||-31.60%||60,357,818|
|BBY||Best Buy Co Inc||Specialty Retail||25.25%||2,755,894|
|BUD||Anheuser Busch Inbev NV||Beverages – Brewers||-3.98%||2,774,259|
|SPXC||SPX Corp||Specialty Industrial Machinery||12.56%||343,345|
One can also place hedged bets using options spreads with expiration dates as far as two years out from now – more on that to come – but in the world of passively trading blue-chips, it’s a strategy which has increased in popularity ten-fold over the last few years.
What placing an options spread does is reduce your acquisition cost (options are less expensive than blue-chip stocks), and protect your downside from a total loss… that is unless the investment firm you’re doing business with “forgets” to protect the downside for you.
That’s exactly what happened to a select group of traders and investors in Wynn Resorts (NYSE: WYNN) through its recent 76% decline through the coronavirus pandemic.
As a result, Klayman Toskes has launched an investigation focusing on full-service brokerage firms, many of which failed to supervise the management of positions on Wynn Resorts in particular for their clients.
As an unfortunate result, multi-million dollar losses have been reported by retail investors.
But that doesn’t mean we can’t take advantage of Wynn’s current price action for a short term trading opportunity to wrap up the week…
As displayed on the chart above, WYNN is currently trading above $80/share support.
Should WYNN hold $80/share support into today’s opening bell, I’ll plan on making a bullish trade with the simple goal of stretching my position for maximum profit potential, to be paid in full by the end of the trading day.
Happy trading and I hope you’ve had a great week!
Yours for TrackStar trading,
America’s #1 Premarket and Day Trader
Disclaimer: This is not investment advice. This article is for information purposes only and opinion-based on financial advisor data across a selection of websites. Investors should be cautious about any and all investments and are advised to conduct their own due diligence prior to making any investment decisions.