Would You Have Taken This 20-to-1 Bet?
|Last week’s avalanche on Wall Street provided some opportunities for Rick’s Picks subscribers to make easy money, always with risk tightly under control. Although there was fear in the headlines, the 24/7 chat room was cool, calm and even jocular at times. Click here to join in the fun for two cost-free weeks. One reason some subscribers were feeling light-hearted while millions of investors were getting pulped is that they had taken my timely recommendation to buy call spreads in VXX, which tracks short-term volatility in the S&P 500. Because this particular trading vehicle rises when stocks fall, it quickly doubled, then quadrupled in value as stocks began to plummet early last week. The original recommendation went out on September 28, airing on the Rick’s Picks Facebook page the same day under the headline Leveraging an October Disaster with Cheap Calls. Sound enticing? It was — and easy, too. One need only have bought soon-to-expire October 30/35 call spreads in VXX at the recommended price of 0.50 or less. It traded down to 0.21 over the next several days before taking a powerful leap that increased its value more than twentyfold by week’s end.
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