+612% Returns on Whole Foods
Amazon (AMZN) agreed to buy Whole Foods (WFM) today and the results were WFM moving +30% intraday. Last week on 08 Jun Emerald Chase posted on Facebook to paper trade WFM. We put on $17,200 risk in our paper account as an call option purchase trade. We closed the position today selling the options contracts for a profit of $105,400.
Big names merge weekly and there are so many opportunities in the equities market that could possibly benefit your portfolio. Will you be in the know? Do you have the time and resources it takes to have an edge in the market? At Emerald Chase we are looking for the opportunities that benefit your portfolio.
WFM traded at $32.74 yesterday prior to this news so how many shares could you afford that would have made you a substantial return. To buy 1000 shares of WFM would have cost you $32,740 and a 30% return on that would have made you $9,822...this is a "risk more and make less" scenario versus what we achieved, risking less and making more. So let's scale this same trade down to a more realistic level. We bought the July 36 calls (meaning we thought WFM would hit $36 by 21 Jul) for $0.86 per share and then sold those contracts back to the market at $6.15 per share. If you wanted to risk $500 you could afford +5 contracts and then have sold them for a profit of $3,075 today.
Now I must caution this notion that call option purchasing can be risky if you do not know the optimal time to get in a company furthermore, the optimal contract to choose. It also has its instances when it behooves you to use buy a call option versus owning the underlying stock. For more on this we suggest you take our Basic Option Course. This is where you learn how we made +612% when the stock only went up +28%.
FYI the names we paper trade are the names we are bullish on regardless. Sometimes we live trade(real money) what we paper trade and sometimes we do not due to being in other positions. The point is if we paper trade a name it is a buy. Please write or call us if you have questions about how to get started paper trading.
