Turn the Market Bloodbath into Triple-Digit Gains When the Fed Raises Rates
The media has finally accepted something I have been saying all along: we are in bear market territory.
Hard selling triggered by last week’s horrid CPI numbers and horrid consumer sentiment levels pushed the S&P 500, officially, into bear market territory. Stocks, bonds, and the rest are all getting hammered. It’s a bloodbath out there, and to add salt to the wound, the Fed will raise rates this week. The only question is, “How high?”
But, we can use that to our advantage. In today’s Take It to the Bank Tuesday, I’ll teach you how to take the Fed’s rate hike and turn it into a trade with a triple-digit profit potential.
And the thing about today’s play is… I already know it works, and so do the subscribers to the Hyperdrive Portfolio. Back in October, we bet that rates were going higher. And when we closed the backend of the trade in May, we walked away with an 800% gain.
That’s right. 800%.
And I’m ready to do it again.
Watch today’s video to learn how we did it and how you can reap triple-digit gains using the same technique, or go here to learn how to turn these rocky markets into even more opportunities to profit.
06/14/2022 Take It to the Bank Tuesday Transcript
Hey everybody! Shah Gilani coming to you with your Take it to the Bank Tuesday, where I recommend what should do with $100 today – as in right now.
Speaking of right now, which is Monday around 12:30 in the afternoon, as I am recording this for you, the markets are getting hammered. Bond market, stock market… across the board, it’s a bloodbath. And this, of course, is on the heels of last week’s horrid CPI cumbers and horrid consumer sentiment levels. Terrible on all fronts.
The markets are reflecting that, selling off hard. The S&P is in bear market territory, officially, and so far, so bad.
Where are we going? Well, what place we know we’re going is towards higher interest rates. How do you make money on higher interest rates? Well, for your $100, I’ve got a play for you.
There are a couple different ways to make a bet on higher rates. One of the ways, my favorite way right now, is betting on TBT, ProShares UltraShort 20+ Year Treasury. It’s an ETF and ultra-short, meaning it’s an inverse leveraged ETF. When the price of bonds goes down, TBT’s price goes up.
It’s a leveraged inverse fund, which I generally don’t like holding long-term because these leveraged ETFs are repriced daily. That creates all kinds of problems. They’re great trading instruments, especially if you get a long run in the same direction. In TBT’s case, if bonds keep coming down, interest rates keep rising, yields keep rising, and TBT is gonna keep steadily going higher. If you get volatile markets where rates are going up, coming down a bit, going back up, TBT gets beat up – but it works fairly well in the long-term when you play it the way I like to play it.
I think, with your $100 today, you should buy $100-worth of TBT.
Another way to trade it, besides outright buying it, is to find and buy a call spread. If you’re expecting the price of TBT to go higher, you can buy an out-of-the-money call spread where you buy the lower strike call and sell the call that’s, say, $1 higher. So, you might buy that $29 calls and sell the $30 calls the expire in September. That’s a dollar spread.
If you buy a dollar spread for 50 cents and it expires, the full dollar value is there. You pay 50 cents for a spread that’s worth a dollar. You make a 100% profit.
By the way, TBT has had a nice run from it’s lows back in August of 2020. From $14 to the $28 it is today, that’s a 98% run up – which is really good for a leveraged fund that happens to normally suffer from volatility and interest rates have been very volatile.
So, use you $100 today to buy a TBT call spread that goes out to maybe September 16, 2022 expiration. Or maybe November if you’d like.
These call spreads work very well. We put on a call spread on TBT a few months ago in my Hyperdrive Portfolio service. On the backend of our TBT spread, the back half of the trade, we just booked an 800% profit. Yeah, 800% profit on the back end of a spread we paid 10 cents for.
The lower you have to pay, the more you get in return on the back end. So, I recommend you buy $100 worth of TBT or find yourself a call spread worth less than 50 cents and Take It to the Bank.