Editor’s Note: This week, Dark Pool Trader is taking over Trade of the Day to teach you how to spot the next big move in the market.
If you want to catch up, you can find the first article here.
Stefanie Kammerman here… once again.
Last time we talked, I promised that I would show you how I am using my Dark Pools System “right now.”
Today, I’m (mostly) keeping that promise.
Right now, I’m keeping an eye on the Dark Pools, watching my current trades, and lining up new ones.
I can’t show you that exactly. But I can show you some trades I’ve made in the very recent past — all since the COVID-19 pandemic hit — and how those led to some very impressive gains.
To review, Dark Pools are the “hidden” stock exchanges where the big boys on Wall Street place their massive trades. These exchanges allow institutional investors to buy and sell large blocks of shares without running the risk that other traders will see their hand.
When an institutional investor makes a big move in a stock, it can easily push that stock’s price around by 5% to 10% in the span of a week. And those who monitor and know how to read the Dark Pools can leverage those moves for much bigger gains.
That’s the foundation of the Dark Pool Trader system.
I have 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, I eventually left and began making a Wall Street-sized income, trading from home.
Now I’m teaching others to do the same, and if you can’t wait to find out more about my system and how it can produce huge gains from these hidden market moves, you can find more information by clicking this link.
If you want to see just how effective this system is, keep reading. We’ll take a look at some of the trades I made recently so you can get a better sense of just what the Dark Pool offers.
This first trade, which I made in early March right as the market was tumbling due to the COVID-19 crisis, was on oil services giant Schlumberger (NYSE:SLB).
It wasn’t clear which direction the stock was headed. All I knew from my Dark Pools analysis 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.
I do these trades through options. Regular Trade of the Day readers have probably seen options trades recommended by Ken Trester, John Jagerson and Wade Hansen, but don’t worry if you don’t understand options. I will explain all you need to know. It’s not complicated.
For any readers that need a very quick refresher, all you need to know for our purposes today 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.”
By the end of the trading day of my SLB strangle, its 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, I closed half of my SLB puts… for a 108% profit. The following day, I sent instructions to sell the second half of the puts. This time, locking in 180%.
That’s 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.
Now let’s turn to a strangle trade I suggested on Snap, Inc. (NYSE:SNAP) in early June.
First, just a few days after getting started, I exited out of the first half of the SNAP calls for 100% gains. By doing so, I broke even on the entire trade… no matter what else happened. At that point, the remaining money in the trade was all profit.
The next day, I exited out of the next quarter of the calls for 162% gains. And a day after that, I got out of the final quarter of the calls for 118% gains.
Altogether, that was a simple, blended return of 95% on the bullish side of the trade. After factoring in the bearish side of the trade that didn’t go anywhere, I had racked up a Dark Pool winner of nearly 50% in less than five trading days.
Notice how I lock in gains on my trades by exiting in different tranches. This is how experienced traders protect their capital — selling a certain portion of a trade after hitting preestablished return objectives, then letting additional tranches run to maximize profits.
I hope you’re seeing how powerful my Dark Pool system is.
To be clear, not every trade is a winner. Sometimes, the underlying stock doesn’t experience a big enough “splash” — remember our glacier calving metaphor from yesterday — to generate a profitable move.
But I can say, without hesitation, that in my test trades for InvestorPlace over the last several months, I’ve had far more winning trades than losing ones.
And not just “barely profitable” trades. In addition to those SLB and SNAP trades, there was a 60% winner on Freeport-McMoRan (NYSE:FCX)… an 89% gain from Wells Fargo (NYSE:WFC)… a 91% winner with the iShares MSCI Japan ETF (NYSEARCA:EWJ)… and a 130% gain with the SPDR Select Energy Fund (NYSEARCA:XLE), to name a handful.
All these trades took just a few days up to a couple of weeks to complete. No waiting around.
The Dark Pool strategy is how a select group of Wall Street pros have been making big money for years.
And now, I’m bringing it to you.
Stefanie Kammerman has devoted the past 26 years to studying the Dark Pool. After learning her trade at one of the biggest proprietary trading firms in the country, she left and began making a Wall Street-sized income, trading from home. Now she’s teaching others to do the same. Learn More.