125. Turn $1,000 into $1 million in 12 months time!!!
This is a 5-star (*****) idea, my best ever, from rags to riches!
Here is my plan to turn $1,000 into $1 million in 12 months time (PLEASE READ THE FULL ARTICLE!):
This is not a TOO-GOOD-TO-BE-TRUE story, this is the future of trading!
As you know, you can do a bear put debit spread on ATM (At-the-money) puts of 1 month, if the stock drops you double your money, if it rises you lose your bet, it doesn't matter how much it drops, as long as it drops...
Here it goes, I am an expert in predicting crashing stocks, I know (and I will build the software and algorithms to be 90% correct in crashing stocks within a 1 month period)
Then let's start with 4 stocks (and their bear put spread ATM options), each week I buy 1 for $250 worth of option contract-combination stock, if 4 out of 5 (80%) drops within one month I make 80% profit in 1 month...
Now, I spread over multiple stock options, like 2-4 per week, spread over several (4 weeks), then my risk is smaller because I bet on 2-4 stocks per week (or 8-16 option contracts per month), also spread over time (4 weeks)
Here is what happens if I make on average 4 out of 5 right trades (80% right) over 12 months:
I have turned $1,000 into $1 million+ in 12 months time with only 80% right probability!
Genius, isn't it? I am going to build this software (and a book) in the next few months...I already built software that predict stocks to go up after a crash (S&P500 stocks that crash within 5 days by 10% or more, move up on average by 2.5% 5 days later, which already gives you 100% return on stocks if implemented), now I have to do the opposite, I go for crashing stocks...bankruptcy, lawsuits, etc I use both technical analysis as well as fundamental analysis...
One crashing stock I found is "BOIL"...check out its chart...
To make it even better, some considerations:
1. If the debit spread bet turns out to be a loser (like stock moves up), then you close the position at 50% loss, instead of waiting for a 100% loss at expiration, because the options still have time value, you can close losing positions at half its loss.
2. If you use 3-month options (same like 1-month options), you have much greater chances of your prediction to be right (90% right instead of 80% right) because of longer time to expiration as well as more time value on options pricing, but: a) you close the position for a 60-80% profit after 1 month, you close your losing positions at 40-50% loss. b) If you were to keep your positions for 3 months (until expiration) and you make an 80% profit profitability, then in 4 times in 3 months at 80% profit you turn your $1,000 into $10,497, thus a 10 times return on your investment over 12 months, which is not bad either...
3. The option positions are debit spreads, not credit spreads so it is easy to get approved by your options broker (I would avoid Interactive Brokers as they have ripped me a large sum of money in the past!!!)
4. If you choose slighly OTM (out of the money) bear put spread options, you could increase your return 3-fold instead of 2-fold for each winning bet if you know the stock will drop alot or if you have a longer time frame (like 3 months until expiration)
5. The bid-ask cost of the options is also of great importance, less liquid stocks have high bid-ask difference on options, so only do this on liquid stocks (more than 1 million shares volume per day), don't limit yourself on the S&P500 stocks only, as there are only few opportunities per week....there are over 2,000 optionable liquid options stocks to select your crashing stocks from...In my book I will explain all the details and how to compile a listing and with the software to pin down on only those stocks that have a continuous downward spiral...these are specialised algorithms I will write...so to get 80-90% probability of stocks to crash!
Visit all other MakeMoneyBecomeMillionaire ideas to make/save $5,000 very fast so you can use it to trade yourselves into a millionaire within 1-3 years time!
PLEASE VISIT THIS SITE/WEBPAGE FROM TIME TO TIME TO KNOW UNTIL MY BOOK AND SOFTWARE ARE READY...
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