The Dark Pool system keeps winning … how it works, with real updates … keep your eyes open for the official launch
When Wall Street gives us a gift, we always take it!
That’s how Stefanie Kammerman opened her Dark Pool Trader update last week.
This week we were able to take 100% profits on just about all of our open strangles …
The best part of these trades is we have a lot of time left until their July 17 expirations. In fact, we could make money on both sides of these strangles if we get big enough splashes.
Now, let me back up a moment to make sure we’re all on the same page.
***Over the last few months, we’ve been featuring Stefanie and her Dark Pool approach to the markets here in the Digest
We first profiled the “Dark Pool” in our March 4th Digest. If you missed it and want to dig into all the details, click here to access that issue.
But as a brief synopsis, Dark Pools are private stock exchanges where the “big boys” on Wall Street place their trades. These exchanges allow traders to buy and sell large blocks of shares without running the risk that other traders will see their hand.
The reality is that when an institutional investor makes a big move in a stock, it can easily push that stock’s price around by 5% – 10% in the span of a week.
Now, imagine you could monitor the buying and selling activity of these giant institutions and anticipate what stocks and ETFs are poised to move that much … then ride the huge waves in the market caused by these trades.
It turns out you can — which is the foundation of the Dark Pool strategy.
Stefanie has devoted the past 26 years to studying the Dark Pool market phenomenon. While initially making these trades for one of the biggest proprietary trading firms in the country, she eventually left and began making a Wall Street-sized income, trading from home.
Soon, she began teaching others to do the same, with some incredible results that we’ve posted here in the Digest.
As we noted several weeks ago, we’re on the verge of making Stefanie’s Dark Pool Trader service available. We’re not live yet — the update at the top of this Digest was sent out internally here in InvestorPlace as we’re working out the kinks.
But in today’s Digest, let’s revisit some of Stefanie’s recent internal updates so you can get a better sense of just how powerful this Dark Pool strategy is.
***The nuts and bolts of the Dark Pool system
Stefanie’s first trade that we profiled here in the Digest was on oil services giant, Schlumberger.
It wasn’t clear which direction the stock was headed. All we knew from the notice was that a big move was coming. So, the instructions were to buy both a bullish and bearish position — that way we’d be covered regardless.
Now, the way Stefanie does this is through options.
Don’t worry if you don’t fully understand options. In Stefanie’s service, she’ll explain all you need to know. It’s not complicated.
For our purposes today, all you need to know is that if you’re bearish on a trade, the option you’d buy would be a “put.” If you’re bullish, you’d buy a “call.”
If you’re unclear on which direction a trade might go and want to be covered either way, you could buy both a put and a call. This is called a “strangle.”
It’s common for Stefanie to recommend a strangle, like she did on Schlumberger.
If you’re unclear on how such a trade could make money (wouldn’t these puts and calls cancel each other out?), let’s return to the example …
By the end of the trading day of Stefanie’s alert, Schlumberger’s stock price was sliding (good for the put, bad for the call).
The next day, it fell further …
Just two days after the “buy” notice, Stefanie sent word to close half of her Schlumberger puts … for a ROI of 108%. The following day, she sent instructions to sell the second half of the puts. This time, locking in 180%.
A simple, blended return of 144% on the bearish side of the trade … in just three days. Now, to be clear, the bullish side of the trade — the calls — didn’t go anywhere. So, that invested capital went to $0.
But as we just noted, the blended return on the puts was 144%. So, even factoring in the calls, the total return on the entire strangle was still nearly 75% … in three days.
That’s how you can buy both directions of a trade and still make big returns in just days.
***So, how do Stefanie’s trade alerts work?
For that, let’s turn to her internal Dark Pool Trader update from two weeks ago. As you’ll see below, it’s quite straightforward:
My analysis of the markets tells me it’s time to exit out of another quarter of the Snap Inc. (SNAP) July 17 $24 Call Options we bought June 4.
We exited out of the first half of this trade yesterday morning for 100% gains. We paid $0.16 for these calls and are now selling them for around $0.42, giving us a 162% return on investment.
Here is my recommendation …
Action to Take:
Sell one-quarter of Snap Inc. (SNAP) July 17 $24 Call Options for 162% gains. They are trading for around $0.42; we paid around $0.16. I’ll be back in touch regarding the remaining quarter.
Notice that Stefanie locks in gains on her trades by exiting in different tranches. This is how experienced traders protect their capital — selling a certain portion of a trade after hitting pre-established return objectives, then letting additional tranches run to maximize profits.
In the update above, you’ll see Stefanie had already closed half of her SNAP trade for a 100% gain. Since Stefanie had recommended a strangle on SNAP, that 100% gain meant she had now broken even on the entire trade.
At that point, the remaining money in the trade was all profit.
The day after Stefanie sent the above “quarter-sell” recommendation, she issued the final sell recommendation:
My analysis of the markets tells me it’s time to exit out of the final quarter of the Snap Inc. (SNAP) July 17 $24 Call Options we bought June 4.
We exited out of the first half of this trade Monday morning for 100% gains. We made a 162% return on the third quarter of this investment yesterday. And today we’re selling the final chunk for 118% return on investment (ROI).
Altogether, that’s a simple, blended return of 95% on the bullish side of the trade since June 4, when we started up this strangle on Snap.
After factoring in the bearish side of the trade that didn’t go anywhere, that’s a Dark Pool winner of nearly 50% in less than five trading days.
***A lot of ways to win
I hope you’re seeing how powerful this Dark Pool strategy is — you can be 100% wrong on a trade’s direction, yet still make double, possibly triple-digit returns in just days or weeks.
To be clear, not every trade is a winner. Sometimes, the underlying stock doesn’t experience a big enough “splash,” as Stefanie calls it, to generate a profitable move.
That’s why it’s always wise to never trade more than you’re comfortable with, and expect the occasional losing trade — after all, no market approach is perfect.
But we can say, without hesitation, that in our Dark Pool beta testing over the last several months, we’ve seen far more winning trades.
And not just “barely profitable” trades. As we highlighted in our May 18 Digest, there was a 60% winner on Freeport-McMoRan … an 89% gain from Wells Fargo … a 91% winner with the iShares MSCI Japan ETF … and a 130% gain with the SPDR Select Energy Fund, XLE, to name a handful.
The Dark Pool strategy is how a select group of Wall Street pros have been making big money for years — we’re thrilled to be able to bring it to you.
Keep your eyes open for the official Dark Pool Trader launch date — it’s coming soon …
Have a good evening,
Jeff Remsburg
