As we see the surge of meme stocks like [stock_quote symbol=”AMC” show=”symbol”] or [stock_quote symbol=”GME” show=”symbol”] you might be wondering how you can profit and get the jump on the next meme stock to pop. You can actually look at the stock options volume leaders chart. This chart will give you ideas for what stocks are most likely to pop before they actually do. Another chart to look at is the most active stocks by volume.

Once you do your research and are ready to invest in a specific company you can then use a breakout strategy like turtle trading to place stop orders to enter your trades at specific price levels. Another approach is to buy out of the money put or call options that have the ability to drastically increase in value as the stocks start to move.

This is an awesome book.

Last year during Covid I decided to purchase some silver options.

Reasons for the trade

• Gold/Silver ratio was the highest it’s been in years.
• Covid was sure to send the government into a massive printing spree.
• Silver is the “poor man’s gold” most people could afford to buy it.
• APMEX.com where I buy my precious metals had a huge spread on silver over spot price.

Exiting the Trade

I’ve now closed this trade with 121% in profit. What is funny is the profit came the same week I initially made the purchase. I just held it for a long time because I thought the government’s printing press would push it a lot further. However, I’m starting to lose confidence in precious metals as a hedge to government printing, for the short term anyway. I more so think we’ll see inflation and as that loses control a shift to precious metals as a hedge to wealth preservation. I’m keeping my VDC(Vanguard Consumer Staples ETF) position open for now.

Keeping the trade open

I think there is plenty of reason for someone to keep a trade open based on some of the supply volatility we’ve seen over the last couple of months. However, my precious metals positions are getting hit pretty hard lately and I’m not sure I want to maintain this trade.

I should also note I still maintain 1-2% of my net worth in physical silver. The target is 1% but the fluctuation comes from price increases.

You can read about my previous post on this short position here.

This stock has returned to its normal volatility and I’m up 17.8% in about two weeks. I’m happy with this trade. I closed my position today at .82

The original premise of the trade was to short this giant undeserved spike in the price indicated in the picture below. I’m still confident there is a ton of room for this to continue to the downside. However, it’s recent volume is low and I have no reason to expose myself to any unforeseen risk.