Create Options 'Basket' Profits
by Bryan Perry 09/05/08
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WHO'S PROFITING FROM THOSE INCREASING FEES?
If you guessed the credit card companies, you're 10 steps ahead of your fellow investors. Remember, those guys aren't making loans like those beleaguered banks that are writing off their bad debts left and right. The credit card guys -- mainly MasterCard (MA) and Visa (V) are actually getting paid every single time you use your card.
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And in this increasingly cashless society, don't forget that the newly IPO'd debit card kingpin (Visa) has another way to clean up via debit-card transaction fees on all those on-the-spot and online purchases folks are making when they aren't putting gas in their cars.
(Check out my FREE Tactical Trader Minute video on trading Visa and MasterCard in 2008 by clicking here.)
A-TISKET A-TASKET, A PROFITABLE TRADING BASKET
Trading names like Visa and MasterCard together is what I like to call a "trading basket." I frequently recommend basket trades to my Tactical Trader subscribers as a way to overweight specific sectors that are showing broad relative strength.
Sure, there are tons of Exchange-Traded Funds out there that group stocks by sectors, and many even have options available for trading on them, so that you only have to buy one option contract to be able to leverage 20 companies.
While trading ETF options is a great strategy to use when you're betting on a sector to fly or fail and you're not sure which individuals stocks to trade, I am more in-favor of finding the top stocks in the hottest sectors and creating baskets of three to five stocks that I think are going to get up and go. Then, as each starts running, we start peeling them off one at a time or, in some instances, all at once when we see all the stocks in the sector blazing up the charts.
In fact, you can check out our latest basket trades by clicking here.
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