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There's no shortage of tempting, speculative plays on all the market noise raging right now - the Trump trade, the tariff trade, the midterm trade, and my personal favorite, the earnings season trade.
But there's one bright, shiny object that stands above all others right now. It's pure catnip for traders like me, who love action and volatility.
You might even call it addictive.
I'm talking about pot stocks, of course. Canada is barely two weeks away from legalizing weed nationwide, and we all know several U.S. states are already there.
Companies are rushing to fill the expected demand.
There are lots of smaller, speculative companies that have proven irresistible to option traders looking to cash in, big and fast, like the California Gold Rush. Traders have lived and died on those.
But plenty of these firms, like Cronos Group Inc. (NASDAQ: CRON), Canopy Growth Corp. (NYSE: CGC), and others stand a real shot at become the blue chips in this sector. Remember - we want to tap the volatility in the sector while limiting downside.
So these "big boys" are the companies we'll be targeting with our speculative capital today.
Let's join in the fun...
About the Author
Chris Johnson is a highly regarded equity and options analyst who has spent much of his nearly 30-year market career designing and interpreting complex models to help investment firms transform millions of data points into impressive gains for clients.
At heart Chris is a quant - like the "rocket scientists" of investing - with a specialty in applying advanced mathematics like stochastic calculus, linear algebra, differential equations, and statistics to Wall Street's data-rich environment.
He began building his proprietary models in 1998, analyzing about 2,000 records per day. Today, that database, which Chris designed and coded from scratch, analyzes a staggering 700,000 records per day. It's the secret behind his track record.
Chris holds degrees in finance, statistics, and accounting. He worked as a licensed broker for 11 years before taking on the role of Director of Quantitative Analysis at a big-name equity and options research firm for eight years. He recently served as Director of Research of a Cleveland-based investment firm responsible for hundreds of millions in AUM. He is also the Founder/CIO of ETF Advisory Research Partners since 2007, noted for its groundbreaking work in Behavioral Valuation systems. Their research is widely read by leaders in the RIA business.
Chris is ranked in the top 99.3% of financial bloggers and top 98.6% of overall experts by TipRanks, the track record registry of financial analysts dating back to January 2009.
He is a frequent commentator on financial markets for CNBC, Fox, Bloomberg TV, and CBS Radio and has been featured in Barron's, USA Today, Newsweek, and The Wall Street Journal, and numerous books.
Today, Chris is the editor of Night Trader and Penny Hawk. He also contributes to Money Morning as the Quant Analysis Specialist.