How to Play This Trader's Market with Our Options Trade of the Week

While the latest volatility spike has some investors bunkering down, you can embrace it to make some big money in the next year.

In fact, some of our readers have already earned up to 450% gains by playing the volatility.

The Dow Jones Industrial Average scored 1,000-point swings on seven occasions over the past two weeks. Since the market fell to its Feb. 28 low, the CBOE Volatility Index (VIX) - or "Fear Index" - has spent more time over the 30-level than it did in any period since 2011.

We're going to show you another opportunity to profit from these big swings today. It's one of Money Morning Quantitative Specialist Chris Johnson's favorite trades right now.

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Warren Buffett reminds us to be bold when others are fearful. But you should also be nimble.

Trading volume averaged about 3.5 billion shares daily before the coronavirus. It soared to over 8 billion shares on Feb. 28. It's been over 5 billion ever since. Lots of money changing hands means big day-to-day swings in the market.

That means volatility is creating opportunities left and right.

And this stock is a great example. Just look at this chart...

This Chart Shows How to Trade the Coronavirus

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Here's one of Chris Johnson's favorite setups for you to consider: Redfin Corp. (NASDAQ: RDFN).

This is a real estate broker and services company. The stock jumped after hours on Feb. 12 after posting a smaller-than-expected quarterly loss. It ended the next day up 18.1% on very heavy volume.

In fact, Redfin is up 40% over the past year. Compare that to the S&P 500's gain of 23%.

Chris' readers traded Redfin for fast profits a few weeks ago, and the stock remains on his bullish screen. They sold just before the stock tumbled with the market, but now, with shares seemingly on sale, it looks like a good time to get back in.

Unlike the broad market, Redfin stock didn't break its rising trend line from last October. What that means is the stock remains in a bullish trend despite the roller coaster the rest of the market has been in lately.

And very little money flowed out, too. In other words, the selling was not that intense, dwarfed by the volume scored on the day it rallied on earnings. That's good demand, and it will carry the stock higher.

Take a look at how the stock keeps rising, even after a brief dip.

Its fundamentals haven't changed, but the technicals have actually improved. Stocks that hold up better when the market declines are good candidates to lead once the market finds its footing.

Take a look at the May 15 $29 call. It's trading for about $1.93 an option right now. If the market snaps out of the coronavirus correction soon, this stock could lead the new rally. And that call could offer you the triple-digit gains we're looking for.

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