Buy-and-hold investors can’t seem to catch a break…
Yesterday, the Fed jacked up interest rates for the ninth time in the past 12 months.
And stock market investors didn’t like it one bit…
The blue-chip S&P 500 fell 1.5%… and the Nasdaq dropped 1%… during yesterday’s session.
It’s easy to see why…
Basic bonds math means higher rates cause bond prices to fall.
And that’s been a big problem for banks that took in deposits and used that cash to load up on riskier long-term bonds. This has led to banks suffering hundreds of billions of dollars of losses.
That’s why Silicon Valley Bank and Signature Bank hit the wall earlier this month. And it’s behind the crushing selloff in U.S. bank stocks.
Investors are fearful. So stocks are getting tossed around like a rag doll.
This is not what you want as a buy-and-hold investor. All you can do is hold on to your positions and wait for the next bull market.
That’s why I’ve been urging you to pay attention to the traders we feature in these pages. As buy-and-hold investors take it on the chin, these traders are racking up some of the best winning streaks of their careers.
For instance, trading legend Larry Benedict has been crushing it lately using his “conveyor belt” strategy. As you’ll see today, Larry just delivered 16 winning trades… in one week… at his S&P Trader advisory.
And he’s expecting more gains like these in 2023. Larry’s strategy thrives when volatility kicks up.
Before we dive in, a quick shoutout to new readers…
The Daily Cut is the premium e-letter we created for all paid-up Legacy Research subscribers.
So, if you’ve found us in your inbox for the first time, it means you recently signed up to follow Teeka Tiwari, Jeff Brown, or Nomi Prins. And that’s why you’re reading this now.
Together, the team publishes 17 investing advisories… and five free e-letters. They’re packed with ideas, insights, and recommendations about how you can move the needle on your wealth… and navigate the kind of crisis we’re going through now.
That’s why we created the Cut. My job as editor is to shine a light on the most urgent and profitable ideas so you don’t miss out.
And right now, I can’t think of a more important strategy than Larry’s to have on your radar. It’s the best way of making money through this hellscape of a bear market.
Most traders are thrilled if they get a 60% win rate…
And traders can still make money with an even lower win rate.
But last week, Larry gave his subscribers the opportunity to notch an 88% win rate.
He recommended 18 options trades. And 16 of them were winners.
That’s why Larry calls it a conveyor belt strategy. It’s a high volume, high-win-rate way of generating profits.
If a reader with an account of about $25,000 traded one options contract for each trade… they’d have walked away with a net profit of $6,980.
That’s a 28% gain in a week of trading. And not just any week…
Last week was one of the worst weeks of this bear market. The banking sector has been scrambling to get its bearings in the aftermath of three U.S. bank collapses. Investors haven’t been this skittish since 2008.
Volatility means different things for traders and investors…
If you take nothing else away from today’s insight, remember this…
When fear rises… and sparks a wave of volatility… it’s a dream market for traders.
That’s because traders have two superpowers for dealing with volatility that buy-and-hold investors lack…
Superpower No. 1 – Traders can profit from short-term market swings. Larry often recommends trades his subscribers hold positions for just a day.
Superpower No. 2 – They can profit from falling as well as rising stock prices. They do this using options contracts.
That’s why I’ve been telling you that this is a trader’s market.
As buy-and-hold investors suffer drawdowns in their portfolios, traders can scalp rapid-fire profits from the big swings in stocks – both up and down.
Right now, volatility is through the roof…
That’s going by Wall Street’s “fear gauge” – the CBOE Volatility Index (VIX).
It keys off how much investors are willing to pay to protect their portfolios from falling stock prices in the options market.
The higher the VIX, the more uncertain investors are about the future. And the more likely stocks are to bounce around in price.
And that’s what we’ve been seeing lately.
In March, the VIX has climbed 45% amid fears of banks collapsing. This helped fuel Larry’s winning week.
Larry is famous for his winning streaks…
Trader and author Jack Schwager featured him in his 2012 book on the world’s greatest hedge fund managers, Hedge Fund Market Wizards.
Larry is featured in Chapter 3 of Schwager’s classic book on the world’s most prolific moneymakers
From 1990 to 2010, he didn’t have a single losing year as a hedge fund manager.
That includes 2008 – the worst bear market since the Great Depression. When investors were losing their shirts, he made $95 million for himself and his clients at his hedge fund, Banyan Capital.
That may seem strange. But remember that volatile markets are a trader’s dream. The bigger the moves stocks make – up or down – the higher a trader’s potential profits.
It’s also what helped Larry deliver 11 wins out of the 11 options trades he recommended at his One Ticker Trader advisory last year.
Here’s a list of those gains…
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20% in 5 days
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6% in 12 days
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2% in 4 days
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8% in 6 days
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12% in 2 days
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1% in 19 days
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24% in 2 days
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20% in 1 day
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23% in 1 day
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17% in 6 days
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21% in 1 day
As you can see, the longest trade lasted for 19 days, The shortest trades lasted just a day.
And the average gain was 14%. That more than the roughly 11% average annual gain for the S&P 500 over the past 30 years.
And that’s during a year when the S&P 500 was down 19%… and the tech-heavy Nasdaq was down 33%.
Market volatility doesn’t have to be your enemy…
As I said above, one of traders’ greatest powers is that they can profit from short-term market swings – both up and down. And the wider the swings, the greater the profits.
It makes today’s choppy markets a trader’s paradise.
That’s why Larry’s hosting a special presentation this Saturday, March 25, at 8 a.m. ET. He’ll reveal a trading strategy he’s used for more than 35 years… something he calls “Lightning Trades.”
This strategy allows you to take advantage of short-term market volatility… often in just one day.
Larry’s Lightning Trades have seen one-day gains of 100% or more 91 times this year so far… and not despite all the market turmoil… but because of it.
So, go here to automatically sign up for Larry’s demonstration.
In the mailbag: “My first options trade is a 65% profit”…
In today’s mailbag, Larry’s readers thank him for his recent successful trade recommendations…
Hello Larry, thank you for all your fantastic trades! For the first time in a long time, my brokerage margin is now gone and I’m up $40,000. And I’m positive $20,000 in my SPXW trades since January 4, 2022. I’m looking forward to all your future trades.
– Mark A.
I walked the tightrope with you today. I almost lost my balance, but you kept me upright and delivered me to the other side. I’m up $8,000! Bless you!
– David A.
I so appreciate the One Ticker Trader. I have had success using Larry’s buy and sell alerts. I have been able to buy options cheaper than Larry’s alert price and I also have been able to sell those for a higher price than Larry’s sell alert price.
– Rick T.
Just wanted to give a big thank you to Larry and his team for my very first options trade on QQQ puts. First trade is GREEN!
– Anthony R.
My first options trade is a 65% profit. Hi Larry, you teach trading in such simple terms that a newbie like me is getting it. Thank you so much for giving me this opportunity.
– Lou S.
Do you have a Larry success story to share?
Write us at [email protected]. Or reply to this email.
Regards,
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Chris Lowe
Editor, The Daily Cut