As a new trader in The War Room, you’ll soon understand that there are many strategies Head Trade Tactician Bryan Bottarelli and I will use to help you make money.

Because of our diverse backgrounds and trading styles, we’re both extremely confident that, whatever the market gives us, we’ll be able to show you a way to profit from it – nearly every day!

There are three strategies that I am going to focus my efforts on regularly. These are Long-Term Equity Anticipation Securities (LEAPS), put selling and penny options. Each one has its own unique characteristics, and I’d like to share how I will be “playing” all three.

Take the Leap

LEAPS are options contracts with expiration dates that are longer than one year.

LEAPS expire one, two or three years from the date of issue. I use LEAPS instead of short-term options when I am looking for a sustained move higher or lower in a particular stock.

Of course, that is not to say that short-term options are not useful. I will be using those as well, but not for the same types of trades.

Let’s say, for example, I like the long-term prospects of China – long term meaning a year or two.

Knowing that there are a lot of issues right now regarding trade with China, I need to approach the situation with a strategy that allows me to profit if the situation gets better. But there are going to be a lot of ups and downs in the trade before the outcome is certain.

A clear example of this occurred in the beginning of 2019…

The Trump administration was gung ho on signing an agreement with China by the end of March 2019, or maybe as early as the end of January or February. People piled into the short-term options expiring in January, February and March looking for an easy pop. They paid a ton for volatility and bought very expensive options that required a massive move higher in the underlying exchange-traded fund (ETF), iShares China Large-Cap ETF (NYSE: FXI), to profit.

I recommended my readers buy the longer-dated iShares China Large-Cap ETF options, the ones expiring in January 2020, instead. I knew that if an agreement was signed, I would get a nice move higher. But I also knew that if no agreement was signed quickly, the short-term options would expire worthless and the ETF might lose value.

If I bought 1,000 shares of the ETF, it would have cost $42,000 (the ETF was trading at around $42). With a 25% stop loss in place, my maximum loss would have been around $10,500. Instead, we bought the January 2020 $40 options for about $4, or $4,000 for 10 contracts. Right off the bat, we risked only 9.5% of the cash that we would have had to commit to buying 1,000 shares. On top of this, our maximum loss was less than half our maximum loss had we bought the shares.

And if nothing happened in the late winter or early spring, we would still have the position for the rest of the year. If I owned the short-term options, I would have lost my shirt.

As it turned out, the agreement was not reached, but negotiations continued. Still, because the governments were talking, the ETF moved up a couple bucks, which allowed us to lock in a 50% winner on the option in less than three months.

With a LEAPS option, even a small move in the share price, if it occurs with lots of time left, can result in a big move in the underlying option because of the implied volatility for the remainder of the option’s life.

Get Paid to Buy Stocks at YOUR Price

Put selling is my favorite way to generate income and possibly own shares of a great company at a great price.

Think of put selling like a coupon. You present the market with an offer to buy shares of a company at a price that you think is attractive. This could be 20%, 30% or even 50% off the current price, just like you would with a coupon or promo code.

But unlike a coupon or promo code, the market will pay YOU to take those shares… but only if the shares trade at or below the price that you agreed upon by expiration. But regardless of what the shares do, the money that you get paid upfront when you make the agreement to buy the shares is yours to keep.

Using my strategy for selling puts usually results in a ton of income and a very small probability of having to buy the shares.

I make offers to buy shares only at a discount of 20% to 50% below where they are trading. Mind you we are talking about solid blue chip companies for the most part. In fact, we’ve done this on several positions that are owned by Warren Buffett, and we offer way less than even he paid.

But a hefty discount is not enough. Using proprietary inputs into a probability calculator, I determine the likelihood of getting put the stock (the likelihood of the stock dropping below the strike price). If that probability is more than 20%, then I don’t do the trade.

The results speak for themselves. Since the beginning of 2017, I’ve had only two losing positions out of 50-plus recommendations in my Automatic Trading Millionaire service! And readers who followed my recommendations raked in millions of dollars in the process.

Swing for the Fences

Finally, I will recommend penny option trades.

These are highly speculative, “swing for the fences” types of trades that take advantage of high-volatility situations. The best part? It will cost mere pennies for each swing.

If we lose, which we will at times, we will lose pennies. But if we win, we could hit the jackpot. I remember one trade on Nvidia (Nasdaq: NVDA) that returned me thousands of dollars on just a couple hundred dollars at risk… in less than a day! Those types of home run returns can make up for a lot of misses!

What I look for are situations where there is a chance for a stock to move up or down sharply, 10% to 20%, in a day or couple of days. Using a formula to determine the possible move, I position myself with an option that costs pennies (literally) in case that super move comes to pass.

With penny options, you can enter a trade for as little as a nickel per contract… that’s just $25 plus commissions for a five-contract trade. Now, they won’t all be that cheap, but rarely will I pay more than $0.20 or $0.30 per contract.

The single common factor in all the trades that I have covered in this report is volatility.

Understanding volatility and then acting on it is what gives us the edge!

As a charter member of The War Room, you’ll have access – every day – to these trading strategies… and many more. Bryan and I look forward to helping you trade like a pro and capture remarkable returns in the process!