Options Research & Trading
For the first time ever, Bottarelli Research is making the trading tactics used by 7-digit CBOE floor traders available to you.
Never before has anything like this been revealed to the investing public. In fact, nowhere else in the world can you learn these secret tactics — and use them in real time — than with the Bottarelli Research Options investing service.
Even if you’ve tried hundreds of other trading systems, you’ve never seen anything quite like this. When you apply these secrets to your trading, you’ll see an immediate impact on your profits.
I call these secrets “Automatic Money Principles: 5 Secret CBOE Tactics for 7-Digit Returns.” Here is a brief taste, fellow rifleman, of what these secrets can offer you...
Automatic Money Principle #1: The “Who Cares” Stock
A “Who Cares” stock is what I call a company you need to buy despite its seemingly overblown fundamentals.
Without revealing the secret of a “Who Cares” stock, you’re buying a stock with momentum on its side. And if there’s one golden rule of trading, it’s never get in the way of a momentum stock.
It’s a proven fact…momentum stocks will move higher despite valuation ratios like P/E and Price to Book that appear totally absurd. It’s called a “Who Cares” stock because it’s a “buy” despite all these crazy valuation ratios.
How can you possibly make money buying stocks like this?
Value investors constantly bet against momentum stocks. You see, whenever value investors get wind of a stock trading at some absurd P/E multiple, they expect a sudden down-turn in share prices, so they short the stock.
Normally, this tactic makes money.
But when you’re dealing with a momentum stock, this large short position actually creates the exact opposite effect.
Remember, we’re dealing with a momentum stock. So if the stock goes up $2.00 or $3.00, the large portion of shorts get spooked and cover themselves…creating a short-covering effect that leads to an even larger up-move!
What you have is a stock that seemed over-valued at $70 a share now trading for $100…even $150 a share. And you’ve profited off this entire up-move!
A perfect example occurred with Salesforce.com (CRM – NYSE).
With a P/E multiple of 232, it’s easy to understand why CRM’s valuation is so ridiculous.
But on August 18th, we entered the CRM September 100 Calls (O:CRM 10I100.00) for $4.80 per contract.
We knew that on August 20th, CRM was scheduled to report earnings and according to our research, their report was going to be a blockbuster.
Now, get this…
The chart below shows you the candlestick formation that occurred on August 19th, just one day before CRM was scheduled to report earnings.
As you can see, CRM was moving lower…
Most traders got spooked and ran for cover. But not us.
On the CBOE trading floor, I’ve seen this trick before. It’s called a “Market Maker Shakeout.”
Floor traders are simply shaking the tree, which forces weak-bellied investors to sell their shares just before a big earnings pop.
I explained this situation to my subscribers — and we held our calls.
The very next day, CRM reported fantastic earnings, and the stock absolutely exploded to the upside.
The chart tells the whole story…
Bottarelli Research members sold the calls for $8.00 per contract, and pocketed a 67% gain.
The secret is that individual investors are not able to make these types of trades, simply because they’re brainwashed with the “old-school” mentality of valuation. But in the world of successful trading, a “Who Cares” stock that seems overvalued at $125 will most likely run up to $140…even $200.
Automatic Money Principle #2: The “Indisputable Evidence” Play
The “Indisputable Evidence” play is probably the single most important indicator used by floor traders. It’s so important because it cannot be disputed.
In other words, when you see this indicator hit, you know — 100 times out of 100 — that a stock’s next move will be higher (or lower — it works both ways).
Without revealing the secret of an “Indisputable Evidence” play, the premise is buying calls or puts on stocks that indicate they will be moving higher or lower over the next 2-3 weeks (but often times even shorter).
That’s why I call it an “Indisputable Evidence” play. When you see a stock trade in this pattern, you know — without looking at anything else — the stock’s bullish or bearish.
It sounds simple, but this one indicator is totally ignored by the general investing public. Nobody off the CBOE floor realizes the significance of the indicator used in the “Indisputable Evidence” play — and this oversight loses individual traders literally tens of millions in trading profits.
This principle was executed to perfection on a company called Coinstar (CSTR – NASDAQ).
On October 28th, 2010, Coinstar displayed the qualities of the “Indisputable Evidence” play when it traded for $65.00 a share. The moment this happened, I knew the stock was going higher…much higher.
So, I recommended the CSTR November 45 Calls (O:CSTR 10K45.00) for $2.95.
The very next day, Coinstar blasted higher exactly as we predicted. We sold our calls for $12.20, good for a 314% return.
Just look at the chart below…
Never once have I seen a stock trade against this signal. That’s why floor traders lean on it so heavily. Dave and Cabot used this secret over…and over…and over again. And they made incredible amounts of money.
Automatic Money Principle #3: The “Always Bullish” Guarantee
The “Always Bullish” guarantee is the strongest indicator of a bullish stock you’ll ever see. Like a last-second three-point shot at the buzzer, this trade has been described as “nothing but net”. This secret allows floor traders to own $50, $75, even $100 stocks with a cost basis of $5 or less.
In fact, Mad Money host Jim Cramer used this technique to make $35,000 in ten minutes…and he learned it from studying CBOE floor traders.
- Cramer says it “always works in a bull market. (It) creates wealth. Instant wealth. In the time it takes a Harvard professor to brainwash a class, I took a gain of more than $35,000 in ten minutes.”
- InvestmentHouse.com says it’s “a powerful methodology for consistent winning in the stock market…An excellent method to build wealth.”
Without giving away the secret, there are two actions made in the boardrooms of publicly-traded companies that tell you, without any doubt, that a stock will move higher. That’s why it’s called the “Always Bullish” guarantee. The only reason for making these two critical decisions is to help facilitate their stock for its next up-move.
The mainstream media — along with individual investors — typically learn about these actions weeks or months after the fact. By then it’s too late. As a charter member to Bottarelli Research Options, you’ll learn about these opportunities the instant they happen.
There are many examples of this strategy, but the best illustration comes from an older trade we made on biotech firm Genentech (DNA – NYSE).
Take a look at this chart…
The moment the “Always Bullish” guarantee happened (marked “buy” above), I bought DNA January 75 Calls. A few months later, I sold these calls for a 131% gain.
Automatic Money Principle #4: The Downside “Gift Gap”
The downside “Gift Gap” doesn’t happen too often, but when it does, it’s practically money in the bank.
The secret is the oldest floor saying in the book, “the trend is your friend.”
The theory goes like this…
No stock goes straight up. Not even the most bullish stock on Wall Street moves up on a straight 45-degree angle. There will be bumps in the road, in terms of profit-taking…one-day sell-offs…or earnings disappointments. The trick is to find a large-cap or mid-cap stock in a bona-fide uptrend…and buy it anytime a one-day moves pushes the stock down 5% or more.
Traders consider this down-move in a bullish stock a “gift,” and they know how to cash in big time.
A perfect example happened with shares of cloud-computing leader F5 Networks (FFIV – NASDAQ).
In early January 2011, shares of FFIV got punished, dropping $35.00 in one day because the company slightly missed their earnings.
Most traders panicked and dumped their holdings in FFIV.
Rather than selling out, I recommended buying a series of FFIV call positions — all as momentum started coming back into FFIV.
Watch what happened next…
On February 4th, 2011, we entered the FFIV February 125 Calls (O:FFIV 11B125.00) for $2.20.
An hour after entering the calls, FFIV shot higher. That’s when we sold these calls for $2.85, making a quick 30% return — in 1 hour.
But according to the FFIV chart, this was a stock that was going to keep moving higher.
So, on the next intra-day dip (less than an hour later), we moved back into FFIV February 125 Calls (O:FFIV 11B125.00) for $3.50.
And once again, within hours, FFIV bounced even higher.
On this move, we sold our calls for $4.60, locking in another 31% return a few hours after our previous gain.
But once again, we were still not done with FFIV…
As the afternoon doldrums set in, FFIV got soft and pulled back yet again.
So, we jumped back into calls yet again. Only this time, we entered the FFIV February 120 Calls (O:FFIV 11B120.00) for $2.00.
Guess what happened?
Just like the previous two times, FFIV responded by shooting higher.
And once again, we “rang the register” by selling these calls for $2.70, good for a 35% winner.
That’s three trades all in the span of a single trading session — all on FFIV — and all were solid winners.
But the story doesn’t end there…
At the close of trading, we jumped back into another FFIV play.
We entered the FFIV February 130 Calls (O:FFIV 11B130.00) for $1.20.
And first thing the following morning, we sold these calls for $1.90, good for a sweet 58% return.
Add it up, and that’s four consecutive trades on FFIV that gained 30%, 31%, 35%, and 58% — all in a matter of hours.
The chart below show you these fast-action moves…
If you started with $1,000 and reinvested your profits from one FFIV trade to the next, you would’ve turned $1,000 into $3,639 in less than 2 trading days.
That’s a 3-for-1 return!
$5,000 would’ve grown into $18,196.
And remember, this is one example of what Bottarelli Research can do for you in just two trading days.
Automatic Money Principle #5: The One and Only Technical Indicator That Always Works
It’s a dirty little secret of floor traders, but most of them use NO technical analysis.
Because in the time it takes them to study a chart — and identify all of the intricate signals involved in pure technical analysis — they’ve probably missed out on making 2 or 3 winning trades.
That’s why most floor traders are trained to use only one simple metric to identify support and resistance points…and it works better than the hundreds of other indicators out there today.
Without giving away the secret, there’s one simple metric found on a stock’s 6-month and 12-month chart that tells you — with a very high degree of accuracy — whether the stock’s up-trends or down-trends will continue.
Stocks in up-trends typically find support at these levels and stocks in down-trends typically find resistance at these levels. Therefore, if an up-trending stock is bouncing off this indicator, it’s safe to buy calls. And if down-trending stocks are selling off at these levels, it’s safe to buy puts.
Our recent trade on Netflix (NFLX – NASDAQ) is a perfect example…
In late January 2010, NFLX tested — and quickly jumped higher — right at the critical $50 level. This was a sure-fire sign that NFLX was going to move higher, and that’s when I recommended buying call options.
On January 27th, we entered the NFLX February 52.50 Calls (QNQ BQ) for $2.20.
Not long after that, NFLX exploded in value, and we sold our calls for $9.30, good for a 323% return!
When you subscribe to Bottarelli Research Options, you’ll put all five trading secrets together and have a trading service whose financial pedigree is unlike anything you’ve ever experienced.