Coronavirus news sets up a potential double-digit gain

Coronavirus News Could Provide a Gain of 88% For Investors
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Coronavirus News Could Provide a Gain of 88% For Investors

News for cruise ships has been generally bad for several weeks. For example, "The Centers for Disease Control and Prevention is reporting 59 confirmed cases of the coronavirus in the United States.

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Using recent market data, we found what some traders might find to be an interesting opportunity in a company that could be affected by the virus. Based on real market prices rather than hypothetical examples, we identified a trade that carries just $265 in risk and a possible gain of more than 85%.

This is an options trade, so we also know the time frame for the trade. The gain or loss on this trade will be realized in a short period of time since that is when the options will expire. This is the kind of trading opportunity that could be attractive to traders with small amounts of risk capital and a desire to compound gains in a short amount of time.

The strategy we use is relatively straightforward, and as we explain in our latest article, this strategy could be used with any stock that has options available for trading. The strategy uses two options to limit the risk of the position.

Options also allow for relatively large gains since they provide leverage. Traders obtain exposure to 100 shares of stock with each options contract. This means the trading strategy can provide relatively large gains even for a relatively small move in the price of the stock.

We have all of the details on the trading strategy, including the math we used to find the potential gains and identify the dollar amount of the risk of the trade, along with the specific trade in our latest free educational article that is available right here.

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