Well, not literally to a gas pump near you. Let me explain…
Two Thursdays ago, I sent out the first issue of my new service, Energy Profits Accelerator, to our Network Members to preview. Two days ago, I closed out my final “beta test” position that was opened October 30, 2017, for a 231% gain!
Many of you are familiar with Treasury Profits Accelerator and how I use call and put options as a means to leverage volatility in the Treasury bond market. You’ll see the same type of options plays here. Though ultimately I’m deploying a different strategy, rest assured, I’m bringing my same disciplined approach.
Treasurys and the energy sector seem like apples and oranges, but there’s actually a clear (to me!) connection between the two.
The Treasury bond market is one of the largest and most liquid on the planet. It’s there that I discovered how we can make big and quick gains on overreactions.
The energy market is also very large, and trading in that space is very liquid, too. Companies that make their money in this sector usually make more or less depending on the price of the commodity they specialize in producing, exploring for, refining, transporting, and/or marketing.
Energy and energy stock prices have a reputation for high volatility (big moves), and they also have a habit of trending for long periods of time.
First and foremost, my system is designed to jump on established trends when the time is right. I plan to use put and call options in my universe of energy stocks, and I intend to ride out the trend to a target price on the underlying stock. My time horizon for the trades are up to six months.
I also employ risk-management procedures to help cut losses short when the trade doesn’t work out as expected.
I have a watch list of about 30 stocks. While the industry divides companies into three main categories – upstream, midstream, and downstream – I have the list broken down into eight subcategories.
These subcategories identify the company’s core business, and I’ll limit trades to one company in each subcategory. This means we could hold up to eight trades at any one time. However, that’s unlikely. My subcategories are as follows: coal, exploration, oil pipeline, natural gas pipeline, refiner, marketer, integrated oil, and energy services.
In the future, I may add alternative energy companies as a separate subcategory if any meet my share price and volume criteria. My list can also change because of mergers and acquisitions.
Each of the companies in my universe require a share price over $20 and an average trading volume of over 500,000 shares per day. Both criteria are important because we trade options on the underlying stocks. Without liquidity and a high enough share price, trading the options for a fair price would be impossible.
I’ve been beta-testing the underlying strategy for eight months, and that’s on top of the 10-year back-test I ran as well. In April 2017, I opened my first live option position to an internal group, and now I’m unveiling the full strategy to you.
My beta test closed out eight trades, with four winners of 132%, 25.97%, 132.69%, and, from just this past Wednesday, 231%! I had four losers of 23.81%, 18.97%, 25.88%, and 53.78%. Just one of those triple-digit winners would have completely offset all four losses!
In the next few months you’ll be able to gain access to Energy Profits Accelerator. I’m really excited about this new research service, and I hope you are too.
If the idea of juicy triple-digit winners as got your attention, then maybe this’ll interest you: my colleague Adam O’Dell just booked a 400% profit for his readers last week on just one trade in his Cycle 9 Alert trading service – and believe it or not, there’s a special discount out right now for access to Cycle 9, with the price slashed by 57%. But for the next few days only. Don’t miss all the details here.
Editor, Energy Profits Accelerator