The best thing about 2020 is traders get to bet on the resilience of the human spirit.
Catalyst after catalyst has sparked massive profits for traders who knew where to look. Just think about some of the innovations we’ve seen solve problems this year – fast-tracked vaccine development, online learning, beefed-up take out and food delivery services, and new thinking about how business itself gets done.
Now, another industry is about to solve one of America’s biggest problems: infrastructure.
And it will be doing it with the backing of trillions of dollars. You see, the next stimulus is likely going to be loaded with infrastructure funding.
Buying the best call options on stocks set to rake in this cash and solve this problem will make for windfall profits for traders.
As most investors know, options can leverage your money and provide super-charged returns. But some investors still think options are just risky derivatives that only work for elite trading institutions.
That is just not true. When done right, options can reduce your risk, not magnify it.
You only need to invest a small percentage of what it would take to buy stocks outright. And you can design strategies to fit any investing style.
That’s where we can help.
While there are still roadblocks in Congress in the way of getting a broad stimulus bill passed, infrastructure spending is one part that looks to be as much of a sure thing as there can be. The incoming administration has made that a priority, and with crumbling bridges and roads, the can can’t be kicked any farther down the road. And it’s one of the few areas of bipartisan agreement in Washington.
Savvy traders can get ahead of the deluge of money heading into this industry by using call options trades.
Here’s how to do it with two opportunities…
The 2 Best Call Options to Buy Now
The companies that should benefit most from infrastructure spending are no secret. All of these repair and replace projects are going to need materials. And none more so than steel – American steel.
That’s why Chris is looking at U.S. Steel Corp. (NYSE: X). Shares of this favorite from yesteryear reached their lowest levels in decades at the end of the pandemic bear market but have been making good progress in their recovery. In fact, a new leg higher began in September, just as the market as a whole was starting to find it footings for its latest run at all-time highs. In fact, U.S. Steel actually outperformed the S&P 500 from then through now.
Chris sees it emerging from a technical base, or bottoming trading range, at this time. The stock is up 50% from the beginning of October, and he thinks another 50% gain before the end of February is quite possible.
But that is just one theme. All of this construction needs complementary services, and tops on the list are products and strategies to facilitate the work and keep both workers and the public safe. No, it’s not masks. It’s traffic control barriers that separate crews from the traffic that just cannot stop during construction.
In this space, Chris likes Trinity Industries Inc. (NYSE: TRN). Like U.S. Steel, Trinity will benefit from what is likely to be the massive infrastructure spending bill sure to be a focal point of American politics and policy throughout the Biden presidency
Here are Chris’ two options trades. Chris recommends using a limit order for these trades, so keep an eye on the price. You might want to wait for a short pullback before getting in. By staying disciplined on entry prices, you can limit your risk and maximize your upside.
Buy July 16, 2021 X $10 calls (X210716C00010000) using a limit order of $2.35.
Buy to open July 16, 2021 TRN $20 calls (TRN210716C00020000) using a limit price of $3.90.
— Money Morning Staff
Tom Gentile, commonly known as America’s #1 Pattern Trader, has just released the names of 10 stocks that he believes could go up between now and December 6. These stocks have increased in price virtually every time in the last 10 years during the same specific window of time. See the full list here.
Source: Money Morning