by Ian Harvey
September 22, 2018
OUT WHILST THE GOING IS GOOD!
GREED CAN BE THE UNDOING OF A GOOD PROFIT!
The options trades on Canopy, for Cut-To-The-Chase” Members, and Cronos, for “Mentorship” members were executed on Monday, August 27, 2018 and Tuesday, August 28, 2018, respectively; based on the knowledge that Canada will officially lift the gate on recreational marijuana sales to adults on October 17, and the interest of investments from alcoholic beverage makers and tobacco companies. These stocks have been extremely volatile but have been able to produce excellent results for Stock Options Made Easy members of 378% and 144%, respectively.
U.S. investors have been able to access the mentioned stocks as Cronos Group the first to list its stock, in late February, as it moved from the OTC exchange to the Nasdaq (NASDAQ: NDAQ) . In May, Canopy Growth Corp. followed suit by making the move to the New York Stock Exchange (NYSE).
This move has been beneficial to both Cronos Group and Canopy Growth Corp. as they have both roughly doubled since debuting on their respective exchanges earlier this year.
It is worth mentioning at this point that Tilray has skyrocketed more than 1,150% since its initial public offering!
PATIENCE PAYS OFF!
YOU NEED TO BE IN TO PROFIT!
Moving Forward…..Stock Considerations….
Tilray, the first marijuana company to go public on the Nasdaq, has now risen 1,159% from its initial share price of $17 in July. Tilray has benefited from several positive developments recently, including the company becoming the first marijuana grower to win approvals for supplying cannabis flower as well as cannabis oils to the important German medical cannabis market. Note that Tilray has had persistently negative net income (like most cannabis stocks); but it’s closer to profitability than Canopy, its closest competitor.
Canopy is one of the few cannabis companies to have signed significant supply agreements. Canopy Growth currently has about 30% market share in Canada's medical marijuana market, and over the past year, it has inked supply agreements throughout Canada that could allow it to capture a similar share of the recreational market. Canopy Growth's revenue in Canada could exceed $3 billion in the future, and that's just Canada. The company's investments in other countries that are legalizing marijuana, including Germany, could add billions of dollars more in sales.
Cronos Group, like most of its peers, is rapidly expanding production capacity in anticipation of tremendous demand for recreational marijuana. The company recently signed a deal with Cura Cannabis Solutions by which Cura will buy at least 20,000 kilograms annually over the next five years. Cronos is also partnering with U.S.-based MedMen to launch retail cannabis stores in Canada.
Friday saw the above stocks sell off, along with much of the market, which could be the result of short squeezes. Shares of Tilray were down as much as 30.25% at close of trading on Friday, with after-hours trading tacking on another -8.54%. Cronos sank 9.02% on the day, with further decline after hours of 3.52%. Canopy managed a little better down 4.87% at closing, and down another 1.79% after hours.
Action To Take…..
This pullback has now provided an excellent opportunity to enter the trades at a much reduced cost. Hopefully Monday, and continuing days ahead will be beneficial to the stock prices; and especially after October 17, when sales become legal.
The Trades To Consider……..
1. ** A New Options Trade To Consider: Buy the TLRY DEC 21 2018 150.000 CALL at approximately $15.00. Sell price is left to your own judgment.
2. ** A New Options Trade To Consider: Buy the CRON JAN 18 2019 12.000 CALL at approximately $2.80. Sell price is left to your own judgment.
3. ** A New Options Trade To Consider: Buy the CGC JAN 18 2019 60.000 CALL at approximately $6.00. Sell price is left to your own judgment.
On October 17, Canada will officially lift the gate on recreational marijuana sales to adults. Once legal, sales are expected to soar, with the industry pulling in up to $5 billion in added annual sales when fully ramped up. The expectation of billions of dollars in added revenue into marijuana stocks is expected.
And if you are concerned that the Midterm elections will “deliver incremental catalysts" to the marijuana industry regardless of which political party emerges victorious, a research note, from Cowen's Washington Research Group has been quite positive. Cowen senior analyst Vivien Azer said that a Democratic win would be better for the sector, before concluding that the Republican party holding onto its majority could also boost pot stocks more than before.
"Few industries are better positioned than cannabis regardless of outcome," Azer wrote in the note. "Generally speaking, the higher the Blue Wave, the better for the budding industry though even a potential Red Wave is likely to feature pockets of good news."
SO PROFIT FROM OPTIONS TRADING!Strategies to Consider……
It is also worth considering, when options trading earnings reports – “Do we exit on already existing profits or leave the companies to report their earnings and hope for bigger profit?” .....READ MORE.....
"Trading Capital Management" is a key component of your trading strategy. The strategy, on which we base our trades to achieve maximum profit, and to minimize loss, is contingent on using an equal amount of money for each trade.……continue reading this article……
Our proven track record says it all!!
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