Editor’s note: Today, we’re sharing a special guest piece from Tom Gentile.
Earlier this week, Tom held a special event where he revealed how he’s trading the “Final Phase” of the AI boom – and getting out before the bust.
If you missed the event, you can click here and check out the replay.
Then make sure to read more about AI’s Final Phase below…
I’m Tom Gentile, America’s Pattern Trader…
I’ve been teaching newbies how to trade options for more than 30 years, and one of the first lessons that I teach new traders is this: You’re probably trading backward.
Here’s what I mean…
New traders tend to only look at trades one way: What do I stand to gain?
But your first consideration should always be: What do I stand to lose?
Well, right now, if you have your capital tied up in pricey AI stocks, you stand to lose quite a bit…
Because the current AI boom is about to enter the Final Phase.
That’s when we’ll see a massive buying frenzy in AI stocks – right before the whole thing crashes, leaving buy-and-hold investors completely underwater (or worse).
Imagine spending the next 25 years getting back to breakeven. That’s the kind of devastation I’m talking about.
We’ve seen this countless times over hundreds of years. The internet bubble, the 2008 housing bubble, even the South Sea Company all the way back in the 1720s. It’s happened over and over again.
And it’s about to happen to AI stocks.
So today, I want to show you how I’m cutting my risk down to just $500 for every move I make to keep my money safe (and growing) in the Final Phase.
How the Money Calendar Cuts Risk
The first step I take to minimize my risk is to use the Money Calendar.
Now, if you’re not familiar with the Money Calendar, here’s the short version: It’s my proprietary pattern-tracking software that uses 10 years of price data to find invisible patterns in the market’s best stocks.
I’m looking for stocks that have made a profitable move over the same timeframe (usually 35 days or less) for at least 9 of the last 10 years.
This alone dramatically lowers my risk – because I’m not holding expensive shares through periods of consolidation and correction.
Think about this…
A JPMorgan Chase study showed that the majority of a stock’s gains are made in about 30 days every year.
The stock market is open 225 days a year. So that means 87% of the time you own a stock, it’s either trading sideways or going lower.
Both cost you money.
So instead, I use my Money Calendar to find stocks that have a 90% chance of going up based on their historical pattern.
I’m in and out in about 35 days. Win or lose, my money is working efficiently, targeting only those days when the Money Calendar predicts a stock will make a profitable move.
But to profit in the Final Phase of the AI boom, I’m not going to buy expensive shares of AI stocks.
Right now, 100 shares of Meta Platforms (META) would cost you more than $50,000.
That’s way too much risk for most investors.
So let me show you how I cut it down from $50,000 to just $500…
Options Offer More Than Just Great Gains
As I said, most traders have it backward. And I understand why…
Options offer exceptional gains potential.
My Money Calendar has delivered some great option wins on the market’s top AI stocks, including 219% in just 10 days on Google… 270% in three weeks on Amazon… and 384% on AMD in just three weeks.
But the reason I use options is because it’s a more efficient way to deploy my capital for the next 30 days – and they lower my risk dramatically.
Instead of risking $50,000 on shares of META, I can buy a call option right now that expires in 35 days for about $2,726.
But this is still too much risk. Even though my trades are backed by the Money Calendar’s 90% patterns, I’m still not willing to risk that much cash on one trade.
That’s where the “Loophole Trade” comes in…
Let This Market “Loophole” Pay for Your Trades
The Loophole Trade (known as a vertical debit spread) is an options trading strategy that’s perfect for the Final Phase of the AI boom…
Because it lets you take a position in these expensive AI stocks for just $500.
The Loophole Trade involves buying to open a lower-strike call option while selling to open a higher-strike call option simultaneously on the same order ticket.
The premium received from selling the second option offsets the cost of the first, allowing you to get in the trade for a lower price – meaning bigger profits and less risk.
Let’s go back to META. Remember, the call option would cost you around $2,726.
But let’s say you sell an option at a higher strike price at the same time. For the August 16 expiration, we would sell an option that would credit us $2,495.
That brings the total cost (and risk) of our META trade to just $231 per contract.
If all goes to plan, the call option that we bought will increase in value heading into expiration, while the call option that we sold will decrease.
Once the value of the spread hits $462, that’s a 100% gain, and we’re out of the trade.
Let me show you a recent winning trade as an example…
How We Made 100% on DD in Just 15 Days
Right now, I’ve got my Money Calendar pointed at AI stocks, looking for the most lucrative patterns to trade as we head into the Final Phase…
But it tracks the best stocks in the market, and when we see a pattern like the one I’m about to show you, we’re going to trade it – no matter the sector or industry.
On May 13, the Money Calendar found seven patterns that had repeated 100% of the time over the last 10 years.
And the best of the bunch was on DuPont de Nemours (DD),a pattern that had a 100% streak going back 10 years.
DuPont de Nemours (DD)
This kind of setup is a no-brainer for us. A 100% bullish pattern in what the Money Calendar predicted would be a bullish month overall for stocks.
To double our money in just over two weeks – and to keep our risk below $500 per contract – we used a Loophole Trade.
Here’s why I love the Loophole Trade for this pattern…
The day I recommended this trade, DD opened at $78.98.
To hit 100% on our options trade, we only needed the underlying stock to increase by $2.72.
Meanwhile, the average move of the pattern over the last decade was $4.56.
So even just an average move, according to the Money Calendar, would push DD’s price to $83.54 – more than enough to deliver our double.
Even better, thanks to the Loophole Trade, our risk was just $175 per contract.
Here’s what we did…
We bought the DD June 7, 2024, $78 call, and on the same order ticket, we sold the DD June 7, 2024, $83 call for a limit of $2.00.
We got filled at $1.75 – and two weeks later, the value of our spread jumped to $3.50, handing us a 100% gain.
This is how I’m trading the Final Phase of the AI boom:
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Using my Money Calendar to find stocks that are scheduled to go up
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Only trading patterns that last about 35 days to keep my money safe
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Using options (and the Loophole Trade) to keep my risk to just $500 per trade
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And targeting 100% gains with every trade in about 30 days (sometimes less)
I’ve put together a special presentation with all the details on how my Money Calendar trades can help you profit – and protect yourself from the coming AI bust.
Click here to watch it now.
Good trading,
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Tom Gentile
America’s Pattern Trader