Trading volume is soaring like we’ve never seen before.
There is immense profit opportunity for the folks who know how to interpret it and take advantage of it.
Take last Monday, for instance.
Stocks soared as the election results were made certain at nearly the same time as Pfizer (PFE) announced a highly effective vaccine.
The trading action was red-hot.
It was so hot, in fact, that several of the biggest online brokerage firms melted down.
Fidelity, Merrill Lynch, TD Ameritrade, Charles Schwab and Vanguard all reported issues. Customers either couldn’t trade or were faced with ultra-slow websites.
Their sites broke because the Pfizer news caused trading volume to spike to almost 10 times average levels in nearly an instant. The action smashed volume records.
By most accounts, this volume is coming from retail-level investors – mostly new investors looking to take advantage of a roaring stock market.
The mainstream belief is that things won’t end well.
The Wall Street elite warn that these mom-and-pop investors will get burned.
Billionaire Leon Cooperman, for instance, said the rush will “end in tears.”
That will be the case for some.
And we’ve certainly seen bubbles come and go.
But there’s something in all of this that 99% of all investors overlook. And that’s a shame because it is what truly drives the market.
It turns this mad rush to invest into the opportunity of a lifetime.
Price Does Not Matter
It irks us every time somebody shows us a stock chart that doesn’t include trading volume. It’s like reading a book with every other page ripped out.
We’ll never get the full story.
Share price means nothing unless we know how many folks are willing to pay that price.
For example, shares of Apple (AAPL) sell for about $120 these days. If we were dumb enough and the market’s safety mechanisms (which exist because there are people dumb enough to need them) let us, we could buy a share for $300… $180 more than the market’s price.
For that instant, the company’s value would more than double. If we could freeze the chart right there, it’d show a massive price spike.
Surely, other investors would think something was up and pile in.
But if those investors ignored share price and looked only at volume, they’d see the truth. Otherwise, they’d never realize that one lone nut just grossly overpaid for a single share.
His silly trade would be one of thousands.
Using volume, we get a much different view of the market… a much better view.
Clues like this are all over the stock market… especially these volume-rich days. And yet few investors use volume patterns in their buy and sell equations.
What a mistake.
Proof of Concept
Take a volume-based options strategy that we asked some of our most loyal readers to test recently.
Most folks think options are scary and filled with risk.
We suppose that if all you use to make your decisions is pricing action, they are. But when we add trading volume to the mix – again, something very few folks do – we get an entirely different view.
Over the last two months, we simply recommended that readers buy a few contracts of options with a unique volume pattern. The aim was to buy the options at a very specific time and hold them for less than a month.
As expected, with so much volume these days, it worked out very well.
We recommended six plays. Four of them were triple-digit winners, with gains as high as 718%.
Using those wins as proof of concept, we did some further modeling. In the end, our back test showed that this strategy produced a historical average gain of 158%.
And that’s simply making one trade at a very specific time each month.
Double your money… and take the rest of the month off.
That’s the power of volume.
Right now is the absolute ideal time to trade based on volume patterns. Investors are flooding into the market, driving volume higher and higher.
Track it… trade it… and celebrate it.
Do it right and Cooperman’s prediction will come true. But those won’t be tears of pain. They’ll be tears of joy.
To get you started, we just released the full results of our recent beta tests.
All the numbers and the full details of the strategy are right here.
Gains as high as 718%… and average gains of 158%… with just one 10-minute trade each month.
That’s the power of volume.
Are options part of your trading strategy? Why or why not? Tell us about it at firstname.lastname@example.org.