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2024/11/05

Little-Known Trading Tool in Action

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EDITOR'S NOTE

Forty-year market veteran Shah Gilani has seen it all.

After decades on Wall Street - including running a multimillion-dollar macro hedge fund and managing futures and options trading desks for major banks - he knows volatility creates some of the most lucrative opportunities... if you know how to play them.

He explains this in detail below...

In fact, he recently showed his subscribers how to capture a 105% gain on the Volatility Index in just 35 days using a little-known trading strategy. The best part? You can get started with as little as $15 per trade.

Here's how it works...

- Nicole Labra, Senior Managing Editor

THE SHORTEST WAY TO A RICH LIFE

My Favorite Little-Known Trading Tool

Shah Gilani, Chief Investment Strategist, Manward Press

Shah Gilani

Most investors know that the VIX - the CBOE Volatility Index - is a measure of expected, or implied, market volatility.

But not a lot of people know the VIX is also an index you can trade.

And it's my favorite tool for speculation.

First, here's what you need to know about the VIX...

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It's calculated by the CBOE on a minute-by-minute basis every day the market is open.

Its numerical value comes from the prices traders are paying for call and put options on the S&P 500.

The more traders are willing to pay for options, the more volatile it suggests they expect the market to be.

If the VIX is at 20, which has been its average level from 1980 to today, that means the market could move, up or down, by 20% over the coming year.

If the VIX gets to 80, which it has gotten to on a few scary occasions, that means the market could move, up or down, by 80% on an annualized basis.

That's a big potential move.

When the VIX goes up, it's because traders and investors are paying up big-time for put options.

That's why the VIX is referred to as the "Fear Index."

But the VIX can just as easily trade down to levels as low as 12 or 10, which implies traders expect the market to move steadily, up or down, by 12% or 10% annually.

Now, here's where the trading - and profits! - come in...

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Place Your Bets

You can make bets on the VIX going up or down, or reaching any level, by buying and selling VIX futures.

There are also ETNs, or exchange-traded notes (similar to ETFs), based on VIX futures. But I don't like any VIX futures-based products or any VIX ETNs. They're too complicated and, in my experience, too hard to make a profit on... and that's the point of trading, isn't it?

The easiest and smartest way to play the VIX is by trading options on it.

Anyone can do it. All you need is the ticker symbol - VIX - and an option.

When I want to bet on the VIX rising, I buy call options that expire in two or three months with a strike price that I think the VIX can get to by expiration.

The strike prices I target are usually at levels where the VIX traded the last time it spiked above its mean level of 20.

When the VIX is high - usually after a fear-based run-up caused by a market sell-off - I often buy put options on it, expecting it to settle down as panic selling and fear subside.

Depending on how high the VIX gets, I'll look to buy put options with strike prices back where the VIX was trading before it started to spike higher. I'll look for expiration dates usually one or two months out, because when the VIX spikes in short order, it often declines just as quickly.

You can also buy call spreads and put spreads on the VIX, just like you can with stock options.

I've made a lot of money betting on the VIX rising and falling by buying call and put options on it.

And when you combine VIX trading with my "Profit Stacking" method, the results can be extraordinary.

Case in point: This June, when I saw massive institutional money flowing out of the market, I knew the VIX was about to explode higher. I alerted my readers to make a specific Profit Stack trade.

The result? A 105% gain in just 35 days.

But here's the thing - that trade wasn't just luck. It's part of a repeatable strategy that works in any market condition. Whether fear is rising or falling, whether stocks are up or down, this approach lets you potentially turn small market moves into significant profits.

Click here to see how you could use Profit Stack trades to double your investment in 60 days... or less.

Asa bonus... you'll get a FREE trade recommendation just for watching.

Details here.

Cheers,

Shah

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