It's been 8 months since our last Top Trade Review on Dec 28th.
Of course we have to give the trades time to do something but we were early last time (I was bored) and late this time (markets have been crazy) so here we are... Last year our first half alerts made $100,000+ and we ended the year with 80.8% winning trades (38 and 9) that are now up over $200,000. While that is wildly successful, I don't like to brag about it because you never know what the next year will bring and this year has been CRAZY!!! - so let's see how we did:
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Top Trade Alerts are the Trade Ideas we feel have the highest probability of being successful each month. Sometimes there are a few, sometimes there are none - the most important thing is picking the RIGHT trades - not the "right now" trades, which is a trap most stock pickers fall into...
Jan 3rd - Teck Resources (TECK): TECK was a runner up in our November Trade of the Year selection and it became our official Copper play for 2024 with Copper still under $4 back in January and accounting for 23% of TECK's revenues - and that was up from $3.50 in November, so we felt the stock price had still not fully accounted for the move up. The Trade Idea was:
I think the risks are going to be manageable and, of course, we don’t need TECK to go up to make good money playing it so it should make for a nice income-producing play in the LTP:
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- Sell 20 TECK 2026 $35 puts for $5 ($10,000)
- Buy 50 TECK 2026 $35 calls for $11.50 ($57,500)
- Sell 40 TECK 2026 $50 calls for $6.50 ($26,000)
- Sell 15 TECK March $40 calls for $3 ($4,500)
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That’s net $17,000 on the $75,000 spread so we have $58,000 (340%) upside potential but we also have 7 more quarters to collect $4,500 and that’s $31,500, which would turn this play into a net $14,500 credit which means our break-even would be $27.75 on assignment, which is a lovely 31.5% discount to the current price.
