All Eyes on Big Banks
A particularly important earnings season kicks off tomorrow, one that could send stocks rocketing upwards or sinking lower into the depths of a recession.
All eyes are on earnings, but I want us to pay particular attention to banks which will start reporting Thursday morning.
I think banks are going to surprise analysts this season and I want us to ride the profit wave as everyone else swarm financial stocks.
How? Well I’ll tell you all about it in today’s Take It to the Bank.
07/13/2022 Take It to the Bank Tuesday Transcript
Hey everybody! Shah Gilani coming to you with your Take It to the Bank Tuesday – on a Wednesday – where I recommend what you should do with $100 today – as in, right now.
What’s hot? What should you be watching? Oh, earnings is the obvious choice this week. It starts Thursday. Big banks are starting to report…
Everybody else is going to report, too, but the big banks… All eyes are going to be on the big banks Thursday, Friday, and next week.
So, for your $100 today, I think we should play the big banks. I think we should play financials. I think we should expect them to do better than expected.
How do you do that? How do you play that easily?
There’s an ETF called the Financial Select Sector SPDR Fund (XLF). You could buy XLF and get appreciation out of it. But, since I think we’ll see better than expect financials from the big banks starting tomorrow, I think (instead of buying XLF) we should put out money on call options.
For your $100, I think you should buy the XLF August 19, 2022 $35 Calls (XLF220819C00035000).
XLF is trading a little over $32 right now, so it’s no big deal to get to $35 or above by August 19. That gives earnings plenty of time to come, come, come, come, and hopefully hit it out of the park. XLF can easily go up 10%, easily go above $35. It’s possible and probable.
If you buy the August 19 $35 calls, you’ll pay 20 cents per share in the options contract. Since there are 100 shares per contract, that’s just $20 out of pocket. You could buy 5 options contracts with your $100 budget!
And I think your 20 cents will goes to 40 cents by expiration. You’ll be thanking me when you double your money.
Catch you guys next week, cheers.