There is a very nice setup occurring in the Silver ETF ($SLV), it has formed a nice bearish triangle pattern, which usually happens after a big down move. I am looking for Silver to break down hard out of this triangle after the Fed Meeting. So the best way to play this, the way that Billionaires play this, is to use super juiced deep in the money put options. (Please see previous blog post where I explain what this means)
Why am I picking Silver here to short, first The Fed meeting always moves the Silver and Gold Markets, secondly Silver puts are extremely cheap, because ($SLV) or the Silver ETF has traded flat for the last month
Here are the Options I like, I like the April $29 Strike Put Options for $1.25, this option expires on April 4th. This literally lets you profit almost 1 for 1 with the Siver ETF, meaning the current price of the Silver ETF is $27.88, and this put option would be in the money at $27.75, only $.13 cents below the actual price of the Silver ETF, so basically you are getting a super leveraged way to short the Silver ETF.
If ($SLV) the Silver ETF breaks below the $27.60 level than it will go to $26.50 the next support level by this thursday or friday. That would give you a 100% return on your put option because you are paying a $1.25 for the put or $125 dollars and you would make $1.25 or $125 dollars on the put option if you take your profit at the $26.50 level. Not a bad return for one or two days work
Will Meade
Editor of the Billionaires Portfolio
wmeade@purealpharesearch.com
There is a neat trick I learned from a hedge fund trader, and that is Swing Trading deep in the money call options.
Here is what this means: first off swing trading means: holding a stock or an option for a time period of one week to one month. Its not day trading but its not buy and hold either, its the holding period that every Billionaire Hedge Fund Manager uses.
Secondly, deep in the money call options, are a great way to trade stocks because they give you super leverage up to 20 times for little or no cost, yet with less risk than trading options outright. Basically when you buy a deep in the money call option, you are buying the stock almost outright, a deep in the money call option is a stock replacement strategy, because the option moves almost 100% in correlation with the underlying’s stock move.
How, well there is a options term called Delta, its simply tells you at the current time how much the option will move in percentage terms versus the underlying stock, if the option has a Delta of .50 its means that the option will move 50% of the underlying stock’s move. For example an option that has a .50 delta will move 50 cents when the underlying stock moves a dollar.
Now a deep in the money option usually has a delta of .60 or above meaning that the option will move $.60 cents for every dollar move in the underlying stock. Sometimes you can even find a deep in the money call option that has a .95 delta meaning that the option and the stock move almost 100% in tandem with each other. A stock replacement strategy is when you get an option that moves $.60 to $.95 cents for every dollar move in the underlying stock.
By using deep in the money options, as a stock replacement strategy you are getting free leverage, (because to margin a stock it can cost you up to 7% an interest a year) an option has zero interest or borrowing costs.
Also a real quick caveat, never buy a option whether its a call or put, unless you know that there is going to be an event (i.e. earnings, merger, corporate announcement, or an economic release etc) because you have time decay on an option, basically the longer you hold the option, the more money you lose, since you lose a little bit of money every day when you hold an option.
So to summarize to make the perfect options trade, that will make you a 100% in a month you need the following things
1) A Swing Trade- an option that you are going to hold for a week to a month time period at most.
2) A Deep in the Money Option with a Delta above .60, so that it moves almost in tandem with the underlying stock
3) An event that is going to occur within the time period of one month or less.
4) and A Cheap Option, and this is very important, basically an option is cheap if the current volatility is below its historical volatility, this sounds confusing, but all it means is this. Is you want to find stocks that have not been volatile or have been trading flat or in a range for the last 2 or 3 months, just pull up a chart and if the stock has been dead or flat, than you know the volatility is low and the option will be cheap.
So here is a trade that I am making today, using this deep in the money option/stock replacement strategy.
I am going to buy 10 deep in the money $6 May Sprint ($S) call options for .20 cents an option, so for 10 calll options my total cost is only $200. So to summarize I am buying a call option on the stock Sprint ($S) and with a May Expiration (so I get to hold the option when Sprint announces earnings on April 22nd) and I am buying the option at the $6 strike price.
Here is why I am so excited about this trade, first off Sprint ($S) has traded flat or dead in a range for the last 3 months, so the options are cheap.
Secondly Sprint ($S) is announcing earnings on April 22, almmost a month from today, so I know there is an event that will create movement or volatility in this option.
Third for just $20 cents or $20 dollars I am controlling 100 shares of Sprint stock on one call option, or in my case I am controlling 1000 shares of Sprint stock for only $200 dollars, that is incredible leverage, since if I purchased 1000 shares of Sprint ($S) stock, it would cost me over $6000 dollars, yet I am controlling that same amount of stock for only $200, thats 30 to 1 leverage.. Awesome..
Also I think based on Spint’s earnings estimates, that Sprint could trade as high as $6.60 after they announce earnings on April 22, that means I would make almost 200% on my option trade in just 4 weeks time. Now thats what I call a Billionaires Trade.
To learn more about this secret options strategy, or what I call the super leverage stock replacement strategy, where you can make 100% in a month using deep in the money option email me at
As I showed you yesterday, Apple ($AAPL) had broken out of a downward trend channel, on a gap up day, a very bullish reversal signal, but today unfortunately Apple looks poised to go lower. One of the key things that is missing right now in Apple is Institutional Buying, there is litte or no bullish volume going into Apple whatsoever. Just take a look at the chart below and you can see that volume in Apple has completely dried up, a very bearish sign, we need to see Apple move up on strong volume, to confirm that a Bullish reversal is in place.
What this means for now? Apple is in a wait and see mode, if Apple breaks above $460 on big volume then I think the reversal is in place an Apple is a Buy, if Apple slips back below $430, you definitely want to sell it. Remember Apple is being driven by news items and rumors right now, whether its an increased dividend or an Apple Watch. So its a very hard stock to trade right now, and the smart money is waiting on the sidelines, and so should you!
There is a great trading setup that is occurring in Emerging Markets right now. As everyone knows there has been a lot of turmoil overseas with Cyprus, and many of the worlds biggest Instiutions and Hedge Funds are starting to scale back their international and emerging markets exposure because of this. Also the U.S. Dollar has been very strong, and is in the middle of a secular long term bull market, and emerging markets stocks therfore have become very unattractive because of the strong dollar.
So I am looking to short Emerging Markets Stocks, ($EEM) is the most popular emerging markets ETF, but as I told you the Billionaires secret is using leverage: so I am going to go short Emerging Markets Stocks by using the Direxion Daily 3x Short Emerging Markets ETF($EDZ). This gives me leverage at 3X or 300%. Look at the chart below, and you will see that $EDZ, the Direxion Daily 3X leveraged ETF has broken a huge 9 month trend line, and is poised to increase 30% to 50% in the next couple of months, as money starts to pour out of Emerging Market Stocks, which will eventually push this short Emerging Markets ETF much higher.
As many of you know I have a strong background in Economics and Statistics and as a side hobby I like to use my quantitative and statistical skills to predict sporting events such as the NCAA Basketball Tournament/Final Four.
In trying to predict the Final Four I used economic regression models and Monte Carlo simulations. In layman’s terms I used all of the past data from all of the teams involved in The NCAA Tournament, I then ran a series of quantitative models that told me which data points have the highest predictability, examples of data points that have high predictability are: the average age of the starting 5 for each basketball team, the teams road record and the teams free throw shooting percentage.
Then I ran all this data through a series of tests and simulations which gave me a weighting percentage for each team. The higher the team’s weighting percentage the more likely they are to win The 2013 NCAA College Basketball Tournament
So with all that being said here are the predictions from my model.
The final four: Louisville, University of Florida, Ohio State and Miami Hurricanes. The winner will be Louisville.
The teams most likely to pull a first round upset, Florida Gulf Coast University, University of Mississippi, Iowa State and Davidson.
In my previous blog I just told you that if you would have piggybacked any Billionaire Activist Investor’s 13D Filing made between 2006-2012 you would have made a 20% return in less than a year. This 20% return is almost 5 times what the S&P 500 returned between 2006-2012 (The S&P 500 returned 4% a year between 2006-2012).
Yet even better, using the methodology that I employ in my Billionaires Portfolio, your average return would increase to an incredible 72% a year. So basically you can buy every stock from our incredible text alert service and you would make a nice profit of 20% or you can subscribe to my Billionaires Portfolio, and make 72% a year!!!!
To put this in perspective a $20,000 account would be worth more than $13 Million Dollars in just 12 years time using the methodology I use in The Billionaires Portfolio. Again by piggybacking the worlds best Billionaire Activist investors and Hedge Funds using the methodology I use in The Billionaire Portfolio would make you a multi millionaire!!!!
To sign up for any of our amazing services please go to www.billionairesportfolio.com
I just finished one of the most extensive studies on Activist Billionaire Investors and Billionaire Hedge Funds ever done in the indsutry. I looked at every 13D Filing (when an investor reports a 5% or more ownership in a stock) that was made by an Billionaire Activist Investor. Remember an Activist Investor is an investor or hedge fund that states in writing or verbally that he/she wants to change something with the company that he/she filed the 13D on (examples of this are: when the Billionaire investor states that he wants the company to sell itself, force the top management out, or force the company to sell some assets or patents).
There were 385 Activist 13D Filings filed between 2006 through 2012, and the average return on each 13D filing was an incredible 20% a year versus 4% a year in the S&P 500 during the same period.
What this means is that if you would have piggybacked any Activist Billionaire who made a 13D Filing between 2006-2012, you would have made a 20% return in less than a year.
Again just by piggybacking any random 13D Filing made by a Billionaire Activist Investor over the last 7 years, would have netted you a 20% return in a one year period.
This is an amazing statistic since you would have crushed the stock market by 16% percent a year over the last 7 years by just simply piggybacking an Activist Billionaire Investor’s 13D Filing.
So how do you know when an Activist Billionaire Investor or Hedge Fund files a 13D, easy, you sign up for our real time text alerts service at www.billionairesportfolio.com.
Our text alert service is the only real time alert system that focuses exclusively on Activist Billionaire Hedge Funds or Investors that have filed 13D’s. Our staff combs through hundreds of 13D filings filed each month, and only picks out the 13D Filings made by Activist Billionaire Hedge Funds and Investors, all in real time.
Over the last couple of months, on this blog I have written articles on the secrets and investing strategies of the World’s greatest Billionaire investors and Hedge Funds.
Furthermore the subscribers to my service are up as much as 30% in our Billioniares Portfolio in less than 6 months, triple the stock markets return, and we are still holding some cash in our portfolio.
The Billionaires Portfolio is crushing the stock market, my subscribers accounts are up $20,000, $50,000 and we have one person up $100,000 in only 6 months. The service is only $299, a bargain really, and remember you can trade options on these stocks as well, so you could be up as much as 300%.
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Because I have been giving out free information small cap stock picks, options picks, leveraged ETF picks which have all made money I will now be limiting that information to my subscribers only.
Remember all those juicy option picks I have coming up, that could make 500% in just a couple of weeks, you will not see those anymore unless you are a subscriber.
First why would you want to build your own hedge fund?
1) Because the top hedge funds (the top 5%) have returned over 36% annualized over the last 15 years versus 4% annualized in the S&P 500. To put this in perspective if you would have put just $10,000 (everyone has 10K in their retirement account right?) 15 years ago in the world’s top hedge funds you would have $1,000,000 today. That’s right you would be a millionaire today off just a $10,000 initial investment.
2) You can’t invest with the top Hedge Funds because they are only for the mega rich, you need a minimum of $10 million dollars in cash to invest with the top hedge funds.
3) When you build your own Hedge Fund it allows you the ability to profit in any market, Bull or Bear Stock Markets, and in any asset class. Basically it is a cash machine that will consistently produce 30% plus returns every single year.
4) Your Mutual Fund and Stock Broker can not and does not have the ability to build a hedge fund for you, I will tell you why in a second, also these same mutual funds and stock brokers still charge you a management fee and commission even if you lose money, so basically when you invest in a mutual fund or with a stock broker you always lose and they always win. Remember a Hedge Fund is different, a Hedge Fund Manager only gets paid when he makes a profit for his investors, novel concept huh?
The Secret Ingredients to building your own Hedge Fund
1) The ability to Short the Market, or short asset classes such as commodities, real estate or bonds. Your mutual fund can not do this, that is why you lost money in 2008 and 2011.
2) The ability to buy any asset class in the world at any time, again mutual funds just buy stocks and bonds, they do not buy oil, gold, currencies etc. That is why they miss out on the huge returns that Hedge Fund Managers produce, because a lot of times the best investments are not in stocks or bonds but are in commodities and foreign currencies.
3) Leverage, by far the most important ingredient. By law under the SEC, mutual funds are not allowed to use a lot of leverage or any, therefore they can not generate the same returns that the top Hedge Fund Managers use, Hedge fund use a minimum of 2x to 3x leverage or 200% or 300% leverage on their investments, mutual funds use 100 to 130% leverage, a tiny amount compared to what the top hedge fund use. So if your mutual fund returned 15% last year on stock, a hedge fund that invests in the same stock would have returned 30% to 45% a huge difference in returns.
So those are the ingredients.
After 12 years of working in the Hedge Fund Business, I can finally say the retail investor is on equal footing with the top hedge funds now, due to these new products.
Put it this way I built my own Hedge Fund with just a $10,000 account, using these new products that any retail trader can use with any online brokerage account, and the results are amazing. I backtested the results going back to 2008.
Unfortunately due to regulations I can not publicly post these returns, but I do promise they are eye popping and even better than the 36% annualized returns I talked about above, but if you would like to email at wmeade@purealpharesearch, I am allowed to give each person a copy of the returns, the products I used to get these returns and the strategy.
