≈ Do you remember the Widow Maker? ≈
Do you remember the Widow Maker from last year? I am talking about the Natural Gas futures contract. When creatures like this emerge from the darkness beneath, some market participants face immediate extinction.
Since January this year, the monster is lying on the bottom of the ocean again. Dormant. When it’s going to wake up again and make widows all over the financial markets is a mystery.
Apparently, traders and fund managers were heavily allocated on Natural Gas, but instead of holding long positions, they were trading Naked Calls. The asset had a +79.10% increase during a short period of time. If this thing happens to you, my friend, goodbye cruel world. You are now an ectoplasm waiting for the phone to ring with a margin call on the other side. Seeeven Daaays…
“You don’t find out who’s been swimming naked until the tide goes out.”, once said the Sage of Omaha. Some +50% return on a Naked Call works like a magnet for greedy people, the problem is that Naked Call = Short Stock.
The good news is that there are ways you can play the selling of call options without being naked. This is the topic of tonight’s Cash Flow Club. We will be covering the Naked Call strategy from the new Tackle Trading Playbook. That is a show you don’t want to miss: the ins and outs dos and don’ts of this strategy will be covered in details by Coach Gino.
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Chart of the Day
The Widow Maker
#TeamTackle cannot be the greedy uneducated traders cited in the image above. If you are a Pro Member, attend tonight’s Cash Flow Club webinar with Coach Gino Poore. You don’t want to miss it.
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Video of the day
What is a Short Call
A Short a Call Option is a position in which a trader/investor Sells or “Sells to Open” a Call Option Contract thereby promising to sell the underlying asset or security at the pre-determined “Strike Price” on or before the pre-determined date “Expiration Date” in exchange for receiving the premium.
Today’s line up
Traders Lounge 11PM EST
Join the coaches in this live lounge, ask questions, discuss ideas or just sit back and listen to veteran traders discuss market conditions.
Cashflow Club 8:30PM EST
Held every Thursday, this show helps you perfect your favorite cashflow strategies.
Halftime Report 12:30PM EST
The Halftime Report starts at 12:30 EST and covers what news is driving the market, chart analysis from the movers and shakers of the day and fun in a way that only Matt and Tim can deliver.
Market Recap
The Market Recap is designed to give you a quick overview of the day that was. While brief, this report is designed to cover all of the major events that drove the markets that day and help you plan for the trading day ahead.
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