Trade Alert: Monster Rally

A bullish bet on a bearish ETF, plus a bunch of other trades taking advantage of today's market conditions.

Our Agnostic Top Ten Names

Since we started this Substack in December of 2022, our weekly top ten names have averaged returns of 18.12% over the next six months, versus SPY’s average of 11.68%.

For most of those weekly top names cohorts, our top ten names have been all stocks. Our security selection system is agnostic though, and considers every security with options traded on it in the U.S., including ETFs, leveraged ETFs, and even leveraged inverse ETFs. For the first time in a long time, our top ten names on last Thursday included an inverse leveraged ETF.

That inverse ETF was our #2 name as of Tuesday’s close. Today’s top names trade is a bullish options bet on that leveraged bearish ETF. We’re putting leverage on top of leverage, in the hopes of realizing a strong gain if there’s another leg down by the end of next week. Our maximum upside here is uncapped, but could be a few hundred percent; our maximum downside here is a loss of 100%.

Today’s Other Trades

With the market exploding higher on news of President Trump’s 90-day pause on reciprocal tariffs on non-China countries, we’re adding some short exposure. We’re also adding a couple of bullish trades taking advantage of the spike in Treasury yields due to the basis trade unwinding.

Details below.

Today’s Top Names Trade

Our ETF is the Tradr 2X Short TSLA Daily (TSLQ 0.00%↑), and our short term, speculative trade is buying the $55 strike calls on it expiring on April 17th, for $2.50. The max gain on 2 contracts is uncapped, the max loss is $500, and the break even is with TSLQ at $57.50. This trade filled at $2.40.

Today’s Other Trades

Betting Against Apple

Trump’s 90-day pause on reciprocal tariffs ex-China will give Apple ( AAPL 0.00%↑) some relief on its products made in India, but 90% of Apple’s stuff is still made in China. Our trade is another short term, speculative one here: we’re buying the $172.50 strike puts expiring on April 17th, for $1.50. The max loss on 2 contracts is $300, and the break even is with AAPL at $171. This trade filled at $1.50.

Betting Against Nvidia (Again)

Another short term, speculative trade, this time against Nvidia (NVDA 0.00%↑). Here, we’re buying the $98 strike puts expiring on April 25th, for $1.60. The max loss on 2 contracts is $320, and the break even is with NVDA at $96.40. This trade filled at $1.56.

Betting Against Junk Bonds

The security is the iShares iBoxx $ High Yield Corporate Bond ETF (HYG 0.00%↑), and our trade is buying the $72 strike puts on it expiring on December 19th, for $1.50. The max loss on 2 contracts is $300, and the break even is with HYG at $70.50. This trade filled at $1.46.

Betting On Treasuries

The security is the iShares 20+ Year Treasury Bond ETF (TLT 0.00%↑), and our trade is a vertical spread expiring on April 17th, buying the $85 strike calls, and selling the $86 strike calls, for a net debit of $0.66. The max gain on 5 contracts is $170, the max loss is $330, and the break even is with TLT at $85.66. This trade filled at $0.66.

Betting On Chevron

This is the kind of trade our friend David Janello, Phd, CFA says became available due to a liquidity drought from the unwinding of the basis trade. The stock is Chevron (CVX 0.00%↑), and our trade is a calendar spread, buying the $160 strike calls expiring on May 23rd, and selling the $160 strike calls expiring on May 16th, for a net debit of $0.07. It’s tough to calculate max gains and break evens on these kinds of spreads, but our max loss on 40 contracts here would be $280. This trade filled at $0.07.

Exiting These Trades

• TSLQ: open a GTC order to exit half of our calls at 2-3x what we paid, and aim to sell all for whatever we can get before expiration.

• AAPL: open a GTC order to exit half of our puts at 2-3x what we paid, and aim to sell all for whatever we can get before expiration.

• NVDA: open a GTC order to exit half of our puts at 2-3x what we paid, and aim to sell all for whatever we can get before expiration.

• HYG: open a GTC order to exit half of our puts at 2-3x what we paid, and aim to sell all for whatever we can get before expiration.

• TLT: open a GTC order to exit the spread at a net credit of $0.98, lowering that price, if necessary, as we approach expiration.

• CVX: open a GTC order to exit the spread at a net credit of $0.27, lowering that price, if necessary, as we approach the later expiration.