This Robinhood Options Trade Could Nearly Triple as the Economy Reopens

We've been talking a lot lately about how trading options can be a great part of an investment strategy - and for good reason! Their low prices compared to the stocks they control make them ideal for keeping risk down while still offering the potential for outsized percentage gains.

And now, with simple-to-use and commission-free platforms like Robinhood, getting started has never been easier. Today we're bringing you a Robinhood options trade to profit off of the economy's summer reopening.

The current market, rocked by the global pandemic, has created tremendous investment opportunity. Not only is there a chance to buy stocks selling for big discounts, but you can also profit from the dramatic rise in volatility. The VIX is more than double its 2019 average right now.

This uncertainty creates mispricing, especially as Wall Street tries to figure out what the pandemic and shutdowns mean for each company. In fact, most of the companies that announced their earnings already really could not offer much guidance for the next quarter themselves.

That's an opportunity for you. By doing some research, you can figure out which companies should thrive once the economy starts to open up again. Money Morning Quantitative Specialist Chris Johnson has already done a lot of thinking about that.

Options 101: It's never been easier to learn how to trade options, especially with our free guide from top trading expert Tom Gentile. Click here to get it.

While the pandemic and social distancing practices will continue to hinder some companies, especially in the travel sector, others can benefit almost right away. Chris' research shows a gradual reopening will boost one sector in particular more than any other.

And we can turn that into an options trade simple enough to do on Robinhood...

The Robinhood Options Trade to Make Before Summer

[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]

After being locked inside their homes for several months, people are itching to get out and get something done.

Retailers will be among the first businesses to benefit from the end to lockdown restrictions, but some will benefit more than others.

You see, while a gradual reopening will let some businesses open back up, it still means Americans will be spending more time at home. There will be fewer concerts, sporting events, and school schedules are in jeopardy. Restaurants will be operating at limited capacity to maintain social distancing standards.

That puts home improvement on top of that to-do list because we've all been sitting around looking at our homes, knowing we'll be spending more time there. Maybe you wanted to get started on those fix-up projects but couldn't get out to shop for the materials. Or maybe you need to build a home office to make working remotely effective. Maybe you plan on entertaining at home more since there are fewer opportunities to get out of the house.

That means Lowe's Cos. Inc. (NYSE: LOW) is in the sweet spot. From painting to building a fire pit in the backyard, Lowe's has all the materials and tools do-it-yourselfers need to finally check off their favorite home projects.

Keep in mind that we are still not looking for the market as a whole to continue to rally too much higher without first seeing another leg down. Not every company or business will be able to cash in on all that pent-up demand from quarantined homeowners. That's why we're targeting a company that could see an outsized share of cash coming in.

Chris sees Lowe's as a company that will benefit from easing restrictions and people going out to do more home projects, whether they live in a small condo or large house.

Here's how to set up the trade, and it's really simple: Buy to open the LOW July 17, 2020 $110 call using a limit order of $6.25 or less.

This call option closed Friday at $5.81, so there is plenty of room to Chris' limit price. A limit order simply defines the most you would be willing to pay for something. If the stock suddenly surges and the option price follows suit, we'll take a pass. The risk would be greater than we'd like to take.

If the stock hits its March high by the end of June, this option could pay 150% profits.

How One Formula Can Hand You the Best of Both Worlds

Tom Gentile has uncovered a low-cost, high-potential opportunity that's practically tailor-made for today's market.

Anyone can get started with as little as $371... and in just a few weeks, you could walk away with a fortune.

It's all thanks to one special formula...

Follow Money Morning onFacebook and Twitter.