Anthony Speciale Stock Market Analyst

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How to Capitalize When Stocks Plunge

Ross Givens recently offered his Alpha Stocks members a shorting opportunity, which yielded some really impressive results!

Did you catch this big winner from Ross? I sure hope you did!

My good friend and expert trader Ross Givens recently offered his Alpha Stocks members a shorting opportunity, which yielded some really impressive results!

Ross has a long-standing career in the trading world.

Not only is he a successful trader, but he was a licensed money manager at a major banking institution. He’s extraordinarily well-versed in the market.

He and I chat on a daily basis about the opportunities we’re looking at in the market, often bouncing ideas and setups off each other.

We do our best to bring our readers and students the very best of who we are as seasoned traders and analysts.

When Ross has a setup, it’s well worth taking a look at. He’s always upfront about risk management and, for me, that’s incredibly valuable!

But when he picks a winner, it’s often a big one…

Going Short for a Big Win

This most recent trade he closed offered his students the opportunity to cash in a triple-digit return on investment on a put option.

You all know I love options, as they’re a great way to take a leveraged position on what you believe is going to transpire and at the same time limit your risk at hand.

To get a better look at this grand slam of a trade, let’s check out Ross’s original alert to subscribers…

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PEGA – Pegasystems Inc. (short)

Daily Chart of Pegasystems Inc. (PEGA) Before Stock Drop — Source: TradingView

Pegasystems is in a textbook downtrend. The stock has been stair-stepping its way lower with a series of lower lows and lower highs.

The stock spiked on better-than-expected earnings last week to bring the price up to its 50-day moving average.

This is a good backstop to short against, so I want to take a stab at this one as a short trade and see if it can continue lower.

As long as PEGA doesn’t trade above the post-earnings high $78.22, I am looking for lower prices.

Stock Trade: Sell PEGA short with a buy stop at $78.30.

Option Trade: Buy the PEGA Jun22 $70 put option.

Pegasystems Inc. (PEGA) Put Option Chain Before Stock Drop

***

Above is the actual write-up for the trade idea Ross had shared with the members of his Alpha Stocks service prior to the stock moving.

You can see the analysis as well as the stock and option trade setups.

Now, take a look at what happened next for PEGA…

As it turns out, a jury ordered the company to pay over $2 billion in damages to Appian Corporation (APPN) for stealing trade secrets, and PEGA stock plummeted.

Daily Chart of Pegasystems Inc. (PEGA) After Stock Drop — Source: TradingView

With the stock crash, the PEGA Jun22 $70 put option was trading in the $25 area at the time of exiting this position.

Pegasystems Inc. (PEGA) Put Option Chain After Stock Drop

Even a small position in the trade could’ve returned you huge profits!

This whole move transpired on the Appian announcement, which is an awful thing.

But we as traders don’t really care what the catalyst is that drives our trade into profitability… We ultimately just want price action to move in our favor.

In this instance, price action did just that for members of Ross’s Alpha Stocks!

Join Us for a Special Alpha Stocks Session

If you’ve been struggling in this wild stock market environment, with the major indexes down double-digits and many of last year’s leading stocks down over 50%, consider checking out Ross’s Alpha Stocks trading service.

He has plenty of long ideas for the right stocks, but he’s also not afraid to go short as you’ve just seen.

He shorts stocks and also provides option alternatives if that’s more of your style.

And Ross gets together with subscribers every Monday for an hour-long live session so that subscribers can ask questions and get guidance about the trades.

If you’re ready to see what you could be missing out on, click here to register for a very special Alpha Stocks presentation today at noon!

Rules to Live By

“Any fool can be happy. It takes a man with real heart to make beauty out of the stuff that makes us weep.” Clive Barker

Until next time, I wish you a beautiful and blessed day!

Yours In Trading Success,

Anthony Speciale Jr.

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