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Earlier this year, I took the big step of calling Canopy Growth Corp. (NYSE: CGC) the "Microsoft of Cannabis."
I wasn't just trying to make waves – there's a good reason I said that. Canopy is making the moves it needs to make to be one of the most (if not the most) successful cannabis companies in the world.
These folks are not shy about their global ambitions.
And it turns out I'm not the only one who thinks so.
See, Canopy's price has been depressed since the summer – it's been happening with the whole cannabis sector, as we've seen.
But one trader – who I happen to think is onto something big – believes the stock turnaround could come in the next two weeks.
And this trader has put $35,524 of their hard-earned capital on the line to back up that belief.
Personally, I think it's a really smart move. And I believe it can tell us a lot about Canopy's immediate future, the future of the marijuana sector, and – best of all – how we can make some money there.
A Bold, Bullish Belief in Cannabis' Future
Last week, some anonymous trader bought an unusually large quantity of Canopy call options – $35,524 worth, to be exact.
Traders buy calls when they believe the stock price will go up. In this particular case, the CGC options expire on Nov. 15 – less than two weeks from today.
So this trader is fairly certain – to the tune of more than 35 grand – that CGC shares will make a sharp upward move before then.
That's 902 CGC calls, which, at 100 shares per contract, gives this individual control of 90,200 shares of stock.
And the thing is, that $35,524 represents a few pennies on the dollar.
Buying 90,200 shares of CGC outright at Thursday's price of around $19.89 a share would set you back almost $1.8 million.
Now, we've seen a lot of bullish news from Canopy lately. The company bought a 71% stake in BioSteel Sports Nutrition, which gets it "in" with the National Football League. It began expanding into the United Kingdom and acquired a cannabinoid compound research company that will give it a bigger footprint in Europe.
These are all certainly positive developments for Canopy, but all the same, I don't think these positive headlines are why "Mr. or Mrs. X" decided to take control of such a huge position in Canopy stock.
Here's my theory – it points to the "why" and to a nice profit opportunity for other investors, too.
Here's Why You Buy Options Instead of Shares
There are a number of reasons to choose options.
But in this case, it's likely our mystery person believes Canopy will offer some improved financial guidance.
Choosing options over stocks – in this particular case – would allow them to see a much quicker return on investment if their bet is correct.
In fact, we've seen instances where options (or what we call Cannabis Lots) gains outstrip those from stocks by thousands of percentage points. These gains have the potential to come much faster, too.
Take Aurora Cannabis Inc. (NYSE: ACB). Back in March, stocks saw a 37% gain in 11 days. Nothing to sneeze at – any investor would gladly bank a profit like that.
But those who had purchased the right Aurora Cannabis Lots saw their holdings soar 1,353% in that same time period.
And that's not an isolated example…
In December 2018, the same thing happened with Cronos Group Inc. (NASDAQ: CRON) – but on a much larger scale.
Between Dec. 3 and Dec. 7, the stock shot up 38%. Nobody would argue that those aren't great four-day gains; they certainly are.
But again, certain Cannabis Lots exploded 3,113% in just four days.
To be clear, though, you want to have what we call a "smart portfolio" – a good balance of short-term and long-term plays.
That's why our publications give you a diverse set of opportunities.
How Cannabis Lots Fit into a "Smart Portfolio"
Playing the short-term game and seeing quick gains can bolster your portfolio – and allow you to play an even better long-term game.
America's No. 1 Pattern Trader, Tom Gentile – a guy who's helped more than 300,000 people learn about trading and who gave his readers a chance to close one triple-digit winning recommendation a week in 2018 – is the ideal person to help teach you about a smart cannabis portfolio.
He's more than a trader; he's a cannabis business expert, too. The system he and his team of experts created can help you pinpoint the best winning Cannabis Lot moves. Tom's approach helped deliver his Cannabis Power Trader subscribers a shot at 95% gains… 143% gains… even 163% in under a month.
Do not – I repeat, do not – miss out on his presentation. Cannabis Lot trades can potentially happen fast – the potential profits can be mind-blowing.
Go and check out Tom's system here…
New Cannabis Lots Can Turn a Small Stake into $15,424 in Just Days
In the past few months, a new way to make money off the cannabis market has unfolded – a strategy that our data shows could turn a small stake into $15,424 in just four days.
Now, this is different from traditional stock trading.
In fact, it would've taken 20 times the initial investment to see that kind of payday on a stock… and although this idea is new in the world of cannabis investing, it's a system that's been around since Ancient Greece.
To find out how you can take this sort of profit potential into your hands, just click here.
About the Author
Greg Miller started working on Wall Street in September, 1987, just a month before the “Black Monday” stock market crash.
During his career there, he became an expert in just about every kind of publicly traded security - from blue-chip and small-cap stocks to municipals, junk bonds, and derivatives. As a portfolio manager, Greg was responsible for over $500 million of assets in mutual funds and insurance company accounts.
After leaving the Street, he designed a successful options trading strategy and made lucrative tech investments for a financial publication. He has also helped develop new products and worked with other editors to hone their strategies. He’s always been dedicated to deep, fundamental research - and he always will be - because he believes buying the very best companies at the right price is the best way to amass wealth in the stock market.