Profit from Falling Stock – Lowes

The home improvement superstore, Lowes, was a market darling earlier in the year. Profit from falling stock--LowesIf you had jumped on LOW stock last Halloween, you could have scored almost a 50% gain.

But look at the chart over the last few months; it has given up ground. Sure it’s still up 30% or so, but over the last 3 months, investors in LOW have not been particularly happy.

But there is a way to profit from the malaise in LOW—with an Insurance Agent Trade using Call options. Normally I use the Insurance Agent Trade with Put options to profit from a flat or rising stock. You can see how I did that with Starbucks, for example, or with Costco.  But with Call options traded above the stock price, I can profit from falling stock or even stagnant stock prices.

Lowes stock chart



Here’s The Trade

On April 29, The Market Tamer Cash Flow System suggested that a Call credit spread on LOW would be profitable. With a Call spread above the stock price, you profit if the stock is flat or falls. And that’s exactly what LOW did.

I jumped on that trade on April 29, selling a Call credit spread for $.59. By the time the second week in June came around, I could buy the spread back for $.02. Total profit on the deal: about $1600.

I’ve been so pleased over the past few months that I’ve decided to make trades from the Cash Flow System a central part of my trading plan. I invite you to do the same.

If you’d like to learn more about it, you can get a dirt cheap trial. It comes with a wealth of trading education that is sure to make you a better trader.

It might be just what you’ve been looking for to get you more consistent profits that you’re looking for.

Give it a try!