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The VIX "fear gauge" was reading above 26 at midday Friday. That means the volatility I've been talking about for months now is here. Not to worry, though; we're on exceptionally fertile ground for making money.
Understanding how to deal with volatility, how to profit from it, is going to be absolutely critical in 2022. In fact, I'm giving a "State of the Markets" address on Thursday to talk about just that, along with other market-defining opportunities like inflation, crypto, and the metaverse.
Today, though, it's time to take a hard look at our favorite stocks and cut some of those back. I've got three sell recommendations to make - big-name stocks primed for a little profit-taking. The gains you capture could be considerable if you've been in these for a while.
I've even got a trade recommendation anyone can use to make money as the market's favorite video game stock takes an inevitable beating.
Of course, there are long opportunities, too. I've got one must-buy pick - an inflation-proof EV stock you can pick up today when the markets open.
Here are the plays I discussed today:
- Sell Activision Blizzard Inc. (NASDAQ: ATVI) and buy ATVI Sept. 16 $60 puts (ATVI220916P00060000) between $1.00 and $1.25
- Sell SoFi Technologies Inc. (NASDAQ: SOFI)
- Buy NIO Inc. (NYSE: NIO)
- Sell Ford Motor Co. (NYSE: F)
There are a lot of stocks to sell right now, it's true... but there are even more opportunities to buy - especially in a particular class of small, cheap stocks that no one seems to be paying attention to right now. And the thing is, this class of stocks has produced 12-month peak gains as high as 22,000%. Recently, my lifetime subscribers got the chance to close out a 300% winner in just two months on a position in one of these.
About the Author
Shah Gilani boasts a financial pedigree unlike any other. He ran his first hedge fund in 1982 from his seat on the floor of the Chicago Board of Options Exchange. When options on the Standard & Poor's 100 began trading on March 11, 1983, Shah worked in "the pit" as a market maker.
The work he did laid the foundation for what would later become the VIX - to this day one of the most widely used indicators worldwide. After leaving Chicago to run the futures and options division of the British banking giant Lloyd's TSB, Shah moved up to Roosevelt & Cross Inc., an old-line New York boutique firm. There he originated and ran a packaged fixed-income trading desk, and established that company's "listed" and OTC trading desks.
Shah founded a second hedge fund in 1999, which he ran until 2003.
Shah's vast network of contacts includes the biggest players on Wall Street and in international finance. These contacts give him the real story - when others only get what the investment banks want them to see.
Today, as editor of Hyperdrive Portfolio, Shah presents his legion of subscribers with massive profit opportunities that result from paradigm shifts in the way we work, play, and live.
Shah is a frequent guest on CNBC, Forbes, and MarketWatch, and you can catch him every week on Fox Business's Varney & Co.