 
Â
Good morning,
DWAC is likely to collapse now that Iowa and New Hampshire elections are over.
But getting short isn’t easy because it’s a hard to borrow stock with expensive fees.
It’s a juicy short though because reversion to the mean puts it in the middle $20’s.
Now that it’s breaking down, -15% already Wednesday, it makes sense to watch bearish exposure.
I know what you’re thinking, buy puts!
I get it, but the IV (implied volatility) is over 300% so buying puts are very expensive.
Here’s the best way to short DWAC, with defined risk, as far as I’m concerned.
Its focus is selling options through risk defined spreads.
DWAC is option-able.
So I did what’s known as a bear call.
You might hear it called a short call vertical spread.
I alerted the trade yesterday (Tuesday) afternoon.
I sold the $50 call and I bought the $52 call for $.70.
And I can make 100% or $3,500 so long as the stock is trading BELOW $50 at expiry Friday February 2.
I’m currently up $1,300 or about 40%. My goal is 50-80% on this trade if all goes well.
So far so good.
What’s cool is this trade can be made with an account as small as $2,000.
And a trader doesn’t even need to use the full $2,000.
Try shorting a hard to borrow stock like this, you’d need a huge account.
And because I bought the $52 call above the $50 call I sold, it’s a defined risk trade.
Shorting stock has unlimited risk, I sleep better at night knowing my risk is defined at the onset of the trade.
-
No hard to borrow stock with high fees
-
No unlimited risk by shorting the stock
-
No having to buy high IV puts
And still the potential to make 100% or $3,500 if the trade stays below $50.
These are the type of trades I make.
And it’s helped me grow the current $2,000 balance to $7,862.
Results aren’t typical. Trading is hard. Nothing is guaranteed.
I’d be happy to teach you this.
Jason Bond
DISCLAIMER: To more fully understand any Ragingbull.com, LLC (“RagingBull”) subscription, website, application or other service (“Services”), please review our full disclaimer located at https://ragingbull.com/disclaimer.
FOR EDUCATIONAL AND INFORMATION PURPOSES ONLY; NOT INVESTMENT ADVICE. AnyRagingBull Service offered is for educational and informational purposes only and should NOT be construed as a securities-related offer or solicitation, or be relied upon as personalized investment advice. RagingBull strongly recommends you consult a licensed or registered professional before making any investment decision.
RESULTS PRESENTED NOT TYPICAL OR VERIFIED. RagingBull Services may contain information regarding the historical trading performance of RagingBull owners or employees, and/or testimonials of non-employees depicting profitability that are believed to be true based on the representations of the persons voluntarily providing the testimonial. However, subscribers’ trading results have NOT been tracked or verified and past performance is not necessarily indicative of future results, and the results presented in this communication are NOT TYPICAL. Actual results will vary widely given a variety of factors such as experience, skill, risk mitigation practices, market dynamics and the amount of capital deployed. Investing in securities is speculative and carries a high degree of risk; you may lose some, all, or possibly more than your original investment.
RAGINGBULL IS NOT AN INVESTMENT ADVISOR OR REGISTERED BROKER. Neither RagingBull nor any of its owners or employees is registered as a securities broker-dealer, broker, investment advisor(IA), or IA representative with the U.S. Securities and Exchange Commission, any state securities regulatory authority, or any self-regulatory organization.
WE MAY HOLD SECURITIES DISCUSSED. RagingBull has not been paid directly or indirectly by the issuer of any security mentioned in the Services. However, Ragingbull.com, LLC, its owners, and its employees may purchase, sell, or hold long or short positions in securities of the companies mentioned in this communication.
RagingBull.com, LLC shall be entitled to recover attorneys’ fees, costs and disbursements. In the event that any suit or action is instituted as a result of doing business with RagingBull.com, LLC and/or its affiliates or if any suit or action is necessary to enforce or interpret these Terms of Service, RagingBull.com, LLC shall be entitled to recover attorneys’ fees, costs and disbursements in addition to any other relief to which it may be entitled.
Â
