A troubling trend seems to be forming in the market. Stocks doing well at the moment tend to be large with little debt and big cash flows – cash flows that are then returned to investors in the form of dividends.
It’s a defensive strategy – nothing that will make you rich.
If you hanker for something a bit more aggressive, this might be the trick: fast money option trades that hone in on stocks that are likely to move higher or lower just after reporting earnings.
These option trades can double your money or more in less than one day of trading.
Even better during the current quarter there has been a discernible trend that you can capitalize on in a big way. Specifically, premium-priced stocks that miss earnings expectations are falling by 10% or more in many cases.
I speculated correctly on the last two in a column last week.
The best way to capitalize on these losers is with put options. Generally speaking a put option will go up in value when a stock goes down.
Here are three companies reporting results that look primed for big money option gains: