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Chances are you already know that options can be a great way to make big profits but with lower risk. You may have even given them a try using Robinhood, because it has made options trading easy for individual investors just like you.
Maybe you are sitting on the sidelines as the market makes historic moves each day. You may even ask how you can grab your share but are not quite sure how to do it.
Maybe you're not capturing these 1,000% gains that you see touted on social media by everyday traders like you.
So how can you get started? How do you turn your trading ideas into real profits that you can see pile up in your own trading account?
We can help. Our trading experts offer new ideas daily. In fact, we've got an options trade today that you can do right now, right on Robinhood.
You see, stocks have rallied about 25% since hitting their March 23 low. But that rising tide has swept up some companies that won't trade higher for long.
We're talking about one of the weakest sectors in the market today: retail.
Retail sales just had their biggest monthly decline ever in March, but some retail stocks have soared despite store closures, plummeting sales, and little consumer confidence. One of those things has to give, and we don't see sales surging anytime soon.
Just take a look at some of these performances:
- Gap Inc. (NYSE: GPS) up 51.5% from its April 2 low.
- Kohl's Corp. (NYSE: KSS) up 63.3% from its April 3 low.
- Macy's Inc. (NYSE: M) up 39.1% from its April 1 low.
This won't last. And that's why we are looking at retail stocks with a bearish eye as the broad market looks ready for another dip lower.
D.R. Barton, Jr., Money Morning's Technical Trading Specialist, sees one mall-based retailer particularly ripe for further losses. This sort of "Reality Gap" - where Wall Street is pushing one idea, but the reality is in another direction - is something D.R. loves to exploit with options trades.
It jumped over 60% after hitting its April 3 low. But it's bouncing off a key resistance level right now. That means it's heading lower as traders lose faith in its rally. And there's no good news on the horizon that could save this stock either.
We're going to capture that downside with an options trade. It's not as basic as a put option either; it's a trade that will maximize your upside while limiting your cost.
And it's an options trade you can easily execute on Robinhood...