Archive Category: Wednesday Windfalls Alerts

You might have heard a thing or two about inflation in recent months? Last week, the most-watched gauge of inflation, the U.S. Bureau of Labor Statistics’ Consumer Price Index (CPI), printed an annual rate of inflation of 6.2%. That’s the largest CPI surge in more than 30 years! While some companies suffer through inflationary environments, commodity-producing companies can make out like bandits, as the selling price of their goods can increase much faster than their expenses.

There hasn’t been much movement in the three underlying stocks/ETFs we played this week. At last glance, price returns range from -0.1% on Medtronic PLC (MDT) to +0.9% on the Utilities Select Sector SPDR Fund (XLU). I can’t say with certainty since prices move … but I think we’ll be able to get out at or around breakeven this week. I’ll cover the details in your Weekly Trade Wrap video.

This week’s three plays come from unique sectors, and we’ll gain additional diversification benefits by playing a sector ETF. Some folks think you can’t make good money trading ETFs because they don’t move as much as individual stocks. And while that’s true to a degree, particularly with regard to their shares … an options trade on an ETF can restore much of the “juice” you get with individual stocks while retaining the diversification benefits. I certainly include ETFs in the universe of potential Wednesday Windfalls trades. And when possible, I like to include one ETF play each week.

Our trade on Intel (INTC) is looking good. Shares of the stock climbed higher both today and yesterday. Now, the stock’s gain of about 1.8% isn’t nearly the “half-the-gap” move I highlighted as a potentiality on Monday. Still, you should be able to sell your INTC calls for a solid gain — in the neighborhood of 100%, depending on your entry and exit prices.

I have three exciting plays for you this week. Each company has one thing in common: They’ve reported quarterly earnings in recent weeks. As I mentioned, it’s easier to buy call options for a fair or cheap price after a company reports earnings. What’s more, investors tend overreact to earnings reports, setting up ideal conditions for mean-reversion, or “snap back,” trades.