Last Thursday, January 18th, I placed a trade.
I based it on 10 years worth of data showing that TSCO tends to rise every year on January 18th.
Using that knowledge, I placed the trade.
But instead of just buying shares of TSCO — or even buying call options…
I placed a type of trade that gives me a few distinct advantages:
- it lets me collect instant cash the moment I enter the trade
- it lets me win the trade whether the stock goes up, goes sideways, or even goes down a little
- but probably most importantly, it puts time on my side
First let’s talk about type of trade I place.
To start, here’s a visual:
As you can see, we entered the trade on Thursday the 18th.
The trade we placed was a “promise” to buy the stock if it drops to a certain price by a certain time:
Price: $217.50
Time: Friday, January 26th, close of trading
In technical terms, we’re selling a $217.50 put with an Jan 26 expiration.
As a backup, we also bought a $215 put that expires on the same time.
We do this as a kind of hedge to make sure that if the trade starts working against us — if TSCO drops to $217.50 — that we can get out of the trade… When that happens, we’re usually able to exit at a breakeven, which is another thing that makes this trade great.
But as you can see on the chart above, we entered the trade on January 18th and the stock started rising exactly as we expected.
It did that for about 2 days… at which point it started coming back down.
And this is the reason I place the kind of trades that I do: They dramatically raise your odds of winning — even when the stock does something unexpected.
Think about this:
If we had bought the stock directly or purchased a call option… Where would be now?
For 2 days, we would have been seeing a positive return. But then the stock would have turned around and started coming back down to the level we bought in at.
In a best case scenario, with shares we’d be at breakeven. With options, we’d be losing money with every day that passes.
And that, friends, is the big problem when you buy the stock or buy options.
But when you collect instant cash in exchange for promising to buy the stock, the cash is yours. And as long as the stock doesn’t drop like a rock, you’re golden.
You’ve already collected your cash. Like I said at the top of this article: Time is working in your favor.
Every day that passes is another day closer to keeping the cash without having to fulfill the promise.
This fundamentally turns the tables and raises your odds of winning like you wouldn’t believe.
Trading this way changes everything. And when I discovered this decades ago, it completely changed my outcomes.
My only goal now is to open your eyes to the possibilities.
Trade well,
Jack Carter
P.S. Are you excited to fundamentally change your trading game? I recorded a video where I go through a bunch more examples and show you how you can join in on my next trade → Click here to watch it now!
