[Video] Watch Us Close Out A 24% Gain In 2.5 Months With This Trade…
Watch us sell a YUM call option out of our real-money portfolio based on Jim Fink’s Seasonal Stock Alert service. Jim made this buy recommendation on March 23, 2023, and we closed it on June 9 for a quick profit (see video).
The Step-by-Step Breakdown
Jim recommended that we bet on Yum Brands (NYSE: YUM), and he gave us three ways to play it:
- Buy YUM stock outright;
- Sell a YUM put option, which is essentially like setting a limit buy order and getting paid while you wait; or
- Buy a YUM call option
In our real-money portfolio, we always buy the call option. So, we bought a June 120 YUM call option.
This trade, like all of Jim’s Seasonal Stock Alert trades, is based on positive seasonality. In the case of YUM, it has produced a positive return in each of the last 10 years from March 22 to June 7. And this year was no different!
As you’ll see in the video, at the start of the trading day we had a 17% return with this YUM call option. But we decided to set a limit sell order at roughly the price it had been trading at the prior day. That worked out well, because we were able to close out the trade for a 24% return just a few minutes later.
Not bad for a trade that was open for only 10 weeks. We’re just a bit more spoiled after closing previous Seasonal Stock Alert trades for as much as 228% in just two months. Fortunately, we’re currently sitting on some nice gains in the other open portfolio positions.
Be sure to subscribe to our YouTube channel for some more quick-hit video trading action as other Seasonal Stock Alert picks close in the coming weeks.
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This article originally appeared on InvestingDaily.com.