This Oddball Trading Strategy Shuns Volatility

Andy Snyder|April 21, 2022

Up… down… up… down.

Everybody wants to know how to beat the volatility.

But they’re asking the wrong question. It’s not “How do we beat the volatility?”… It’s “How do we avoid it?”

After all, the best way to avoid breaking your nose in a fight… is to never get into a fight.

You don’t need us to tell you why things are volatile. Inflation is soaring. Growth is slowing. And interest rates are rising.

Most active investors are trying to determine what will happen next. Will the Fed raise rates? Will we go into a recession? Will oil go to $150 a barrel?

Get all three right… and you could be rewarded handsomely.

Get any of the three wrong… and, well, that broken nose is going to hurt.

That’s why we’re offering up another strategy.

It’s an oddball… but it works. It works very well.

In fact, using this strategy, we’ve averaged a 24.8% return over an average holding period of just 28 days.

That’s more in a month than the S&P averages in nearly three years.

And the strategy doesn’t require us to guess about the next macro force to ebb or flow. Unemployment figures… price hikes… whatever Congress messes with next… none of it matters.

Just one factor does…

Volume.

Who’s Buying What

If you know us, you know we’ve long been a huge fan of tracking trading volume. It’s the most reliable indicator available to investors today. It allows us, in real time, to see who is buying how much of what.

Think about it…

If we go by a restaurant and see people standing in line outside, there must be something worthwhile inside.

But if the lights are on and nobody’s inside… we know something’s not right. There’s something unappealing on the inside.

It’s the same thing virtually anywhere – especially on Wall Street.

When we see folks piling into an asset, we know it’s got something going on. When volume is high, we must pay attention.

And here’s where things get really interesting.

It’s something virtually nobody is looking at – our little secret.

Several years ago, we started seriously examining volume in the option market. We looked for the contracts with the largest spikes in volume (not just the most volume) and watched to see what happened 30 days later, when the contracts neared expiration.

The results were staggering.

So much so that we dove in headfirst.

We told our readers about GoPro (GPRO). Four weeks later, we were up 85%.

We told them about Axon Enterprise (AXON). In three weeks, we were up 212%.

And we told them about Corteva (CTVA). We nailed a 422% gain in just three weeks.

It’s super simple.

Find a company that’s seeing a spike in volume, get a small stake and hold onto it for less than a month.

No worry about the headlines, the volatility or where the markets head next.

There’s a simple rationale for why this happens… and why it works so well.

It has to do with a “Rollover” maneuver that happens once each month.

It’s a bit too much to cover in a short column, so we went on camera and went over all the details here.

If you want to shun the volatility and get into a proven, short-term strategy, check it out.