You Can Trust Auntie Cathie This Time! How to Profit 70%+ from an 18% ARKK Surge
After enduring the worst October in five years, we finally welcomed the best week in several quarters in November. Beaten-down and heavily shorted growth stocks rallied sharply.
Cathie Wood's fund, which focuses on growth tech stocks, $ARK Innovation ETF(ARKK)$, surged by 18.59% last week. However, some investors managed to profit over 70% through ARKK. How did he achieve such impressive gains?
Let's take a look!
In line with the example above, let's explore the strategy of earning premiums by selling put options during a bullish market, which many of you are likely familiar with.
In this particular case, with a strike price of $36 and an expiry date of November 17th, selling such a put contract means that as long as ARKK doesn't drop to $36 before November 17th, you can earn the premium for this contract.
Essentially, this strategy is founded on the belief that ARKK's stock will not decline to $36, or even if it does, the investor is willing to purchase the underlying stock at that price.
What are the advantages of selling puts?
Enhanced Capital Efficiency for Buying Stocks: If investors intend to buy specific stocks but find the current stock price relatively high, they can choose to sell corresponding put options to acquire the stock at a lower price. This can reduce the purchase cost while mitigating risk.
Higher Profit Potential: Selling put options often provides a higher probability of profit. In scenarios where the stock price rises, remains stable, or only slightly declines, the option expires worthless, allowing the seller to keep the option premium.
In essence, employing a sell put strategy acts like a limit order. If exercised, stocks are bought at a predetermined price, opening the door to benefiting from subsequent price increases. Alternatively, if not exercised, earning the premium remains a possibility.
During a bullish market, there are numerous cases of profit from selling put options. Feel free to share your sell put returns or your profits with ARKK.
Feel free to share your $ARK Innovation ETF(ARKK)$ positions or sell put trades in the comment section for a chance to win Tiger Coins!
If you've achieved profits from other potential stocks we don’t know, kindly share your trading strategies in your post, and remember to include the topic "Winning Trades". Hope you'll be the next one to make it onto the leaderboard~
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