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Playing the market volatility using weekly put options pays off for these savvy trading members!
There are many catalysts that are causing the roller-coaster ride being experienced in this stock at the present time.
Due to the continued negative volatility, which has hammered our trades for the past couple of weeks, we changed our direction last Tuesday by trading weekly put options. This move has paid off big-time!
The tech sell-off began in February and has picked up steam in the last couple of weeks. The central theme to the market rotation has been concern about rising interest rates, which have traditionally hurt high-growth companies, coupled with a move into stocks that tend to outperform in periods of inflation, such as financials, commodities and industrials.
Also, other catalysts that are driving this volatile market are......
As discussed in the information for the recommended weekly put options trades.....
The rotation out of tech stocks continues to hammer cloud companies the hardest, as investors sell out of last year’s best performers.
While the Dow Jones Industrial Average is trading just below a record, an index of cloud-computing companies slid to its lowest level in six months.
WEEKLY PUT OPTIONS RESULTS FOR Tuesday, May 11, 2021
|DATE||TRADE||BOUGHT/SOLD||POTENTIAL PROFIT||POTENTIAL PROFIT IF BOUGHT AT THE ORIGINAL RECOMMENDED PRICE|
|May 11, 2021||CRWD MAY 14 2021 180.000 PUTS||0.38 / 3.15||729%||97%|
|May 11, 2021||ZS MAY 14 2021 160.000 PUTS||0.59 / 2.93||397%||109%|
|May 11, 2021||NOW MAY 14 2021 460.000 PUTS||1.20 / 9.30||675%||66%|
|May 11, 2021||SNOW MAY 14 2021 185.000 PUTS||0.55 / 3.51||538%||67%|
|May 11, 2021||FSLY MAY 14 2021 40.000 PUTS||0.19 / 1.10||479%||83%|
|May 11, 2021||TWLO MAY 14 2021 280.000 PUTS||0.75 / 7.75||933%||210%|
|May 11, 2021||ZM MAY 14 2021 280.000 PUTS||1.00 / 6.70||570%||168%|
|May 11, 2021||COUP MAY 14 2021 227.500 PUTS||1.95 / 5.10||161%||104%|
Last year, cloud stocks soared as the speedy and unexpected transition to remote work forced companies to adopt products that could help their employees collaborate from afar and access data that was stored in physical data centers. From Zoom Video Communications Inc (NASDAQ: ZM) for video chat and Twilio Inc (NYSE: TWLO) for text communications to cybersecurity tools by Crowdstrike Holdings Inc (NASDAQ: CRWD) and Zscaler Inc (NASDAQ: ZS), large businesses made enterprise-wide purchases of new technologies.
“Clearly 2020 was a phenomenal year for cloud-computing companies as we entered that work-from-home economy,” said Pedro Palandrani, research analyst at Global X, a manager of exchange-traded funds, or ETFs. “I really think there is a misconception that as we reopen the economy, we are all going to stop using cloud-computing solutions, and that’s not really true.”
Twilio said last week that first-quarter revenue jumped 62%, topping analysts’ estimates. ServiceNow Inc (NYSE: NOW), whose software automates business workflows, also beat estimates in its latest quarter, reporting growth of 30%. However, shares of both companies dropped after the reports.
Analysts attributed the stock declines to the second-quarter forecasts, which were weaker than some had expected.
ServiceNow is down 15% this year, and Twilio has dropped 13%. The cloud stock with the steepest decline this year is Fastly Inc (NYSE: FSLY), which has lost more than half its value after more than quadrupling last year. Fastly, which speeds content delivery to websites, also gave a disappointing forecast last week.
Other big decliners in 2021 are cloud database vendor Snowflake Inc (NYSE: SNOW), which held the biggest software IPO ever in September, and Coupa Software Inc (NASDAQ: COUP), a provider of spend management software. Both stocks are down over 30% this year and still have among the highest price-to-sales ratios in the cloud index.
Snowflake is set to report earnings later this month, while Coupa announces in June. Zoom also reports at the beginning of June, and investors will closely monitor what the videoconferencing company sees for the remainder of 2021.
Zoom has reported three straight quarters of growth above 300% and is expected to say that sales increased over 175% in the latest fiscal quarter. From there, growth begins to drop dramatically. What company executives say they’re hearing from customers could have a big influence on the broader cloud market.
Why The Results for These Weekly Put Options?…..
These weekly put options were sent to members before the market opened on Tuesday. However, the market reversed from the previous sessions that had been experiencing negative direction and instead climbed early in the day which allowed for a much cheaper entry price.
Then, on Wednesday the market turned downwards again allowing for these weekly put options to make substantial gains.
Thursday saw much of the market back in the green, but, these stocks were still being hammered which provided for the enormous potential profits on the weekly put options that can be seen in the chart above.
What Other Trades Are We Anticipating?
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For answers, join us here at Weekly Options USA, and get the full details on the next trade.
While there are many more areas that can help to explain option trading, this is a basic overview of what stock options are, and where and how they started.
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