Trading Options on outperforming Stocks

Low Risk Options For The VALE Stock

Want to identify more trading opportunities? Learn to understand and utilize an exchange traded fund (ETF) In this example, the ETF is SLX (which is the steel ETF) and is signaling a buy in the VALE mining company stock.

How did we know that? 

By looking at SLX, we were able to identify VALE as a relative outperformer. At $185 per options contract, this was another low-cost and low-risk trade. We sold at $290 — that makes for a $105 profit per contract. The trade is an optimal setup for a small account where two contracts is the right amount of risk.

In a large account, the principles all remain the same except you’re able to afford to buy more contracts. As an example, a larger account may have been able to buy 10 contracts. Risk would have been $1,850 and total profit potential would’ve then been $1,050.

It’s all about scalability and not different techniques for different account sizes. Check out this video to get the details.

Keep up with the volatility!

Sign up now to receive Raghee’s FREE Countdown Trader Newsletter. This is where Raghee walks you through timely trades and strategies. A great resource for all your trading needs.

We will never sell your information to any third parties.

Free Downloads

34 EMA Wave, GRaB Candles & Darvas 2.0 Indicator Downloads

Identify trends, sentiment, momentum and key price levels with Raghee's free indicators.

TradeStation | ThinkorSwim

Propulsion Dots Indicator Download

A dynamic indicator based on the comparison of 2 EMAs in the form of buy and sell dots.

TradeStation | ThinkorSwim