It's no secret that the pandemic has transformed our economy. From working from home to an exodus from big cities, these changes are not just disrupting the status quo; they're creating opportunities too. You can harness these changes by using the best call options trade today on a company positioned to dominate in this new economy.
Companies no longer need such centralized infrastructure - office buildings - because more and more people are working from home. Real estate is at risk. And so are industries where people must get together, like catering, Broadway, and sports.
Just when we thought it was safe to get back to the gym and on a plane - with proper precautions - the second wave of the virus hit Europe and is expected to come here, too.
But these disruptions have been a boon for other industries. Companies selling products that aid our stay-at-home lifestyles are popping. Peloton Interactive Inc. (NASDAQ: PTON), the maker of home exercise bikes and live workout subscriptions, is up over 300% on the year.
But there is one more industry that's benefited from these changes, and it's creating our next big opportunity.
You see, even though more people are working from home, they're still going to need cars. But they're not going to want to pay the premium for a new one if they aren't commuting for hours a day in it.
Money Morning Quantitative Specialist Chris Johnson sees this trend as the new normal. Whether it is a transplanted urbanite or just someone finally coming out of their COVID-19 bunker, people will want to buy or replace their cars. But since there is still so much uncertainty in the economy, they also want to save some money. Used cars are in high demand.
COVID-19 has led to an increase in used car sales as people avoid mass transportation and are more sensitive to auto cost in the recession, reported CNBC.
Car and Driver reports used car sales are as high as they've been since 2007, when the economy was mired in a recession. Used car inventories fell 22% this summer.
This trend will continue. In fact, used car retailer TrueCar Inc. (NASDAQ: TRUE) and its ALG subsidiary forecast that used vehicle sales will be up year over year for a fourth consecutive month.
But there is even another angle that makes the used car industry an even better opportunity for investors.
It's the next best thing to owning a dealership. And by using an options trading strategy, you can amplify your profit potential even more.
The Best Call Options Trade to Make Now
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
You can now very easily buy used cars online. It is contactless, and it's getting more popular thanks to the virus. That means no more fighting off aggressive sales staff or wondering if you're getting swindled when you can do everything easily online.
The digital car buying space is lighting up with profit potential right now. One stock in particular recently received two analyst upgrades after projecting a 40% increase in sales for Q3 ahead of its Nov. 4 earnings announcement. It has just about tripled in price since its 2020 low as its strong bullish trend continues.
With a long time to go before any vaccine is realistically ready for mass distribution, people will need cheaper transportation. Any stimulus bill will put more money in consumers' hands and pour additional fuel on this fire.
Chris' favorite stock in this space is Cars.com Inc. (NYSE: CARS). It had a nice bounce of its March low below $4 per share, but since July, it's traded in a range between $8 to $10 a share. Chris thinks $11 to $11.50 can be a quick pop from where it is now near the bottom of that range.
The stock is on solid footing, too, because earnings have been growing this year. And the online car selling industry as a whole is executing well, building profits and driving up stock prices.
Of course, you can just buy the shares with Chris' limit price of $8.95. Or you can kick up your returns with options. Remember, this is a short-term play, so options can be ideal for capturing, and magnifying, quick moves.
Here is the options trade: Buy to open CARS Jan. 15, 2021 $10 call using a limit order of $0.90.
This call option expires in about three months, and it is currently out of the money. That means the strike price is higher than the current stock price. But notice one more thing. The strike price is lower than Chris' upside target price. That means it should change into being in the money, and then you can watch the options price move even faster.
If shares hit Chris' target of $11.50 by December, you could be looking at a 233% gain.
Millennial Millionaire's One-of-a-Kind Trading System
It's been generating money hand over fist since the recession of 2008... and now, he's finally sharing the secret!
Investors in today's economic climate need every advantage they can get, and I don't think I've ever seen a strategy more powerful than this.
Click here for the full story and the next three plays he has his eye on.