From the trading desk of Adam Mesh:
2024 had a very repeatable strategy.
Simply put, it was buy the dip.
Every time the market went down, people who bought were rewarded with a rally soon after.
Traders have been conditioned to Buy The Dip.
Early in 2025, we are seeing the opposite.
Now it’s a “Sell The Rally” market.
If every time the market rallied you sold, you would be rewarded.
Just today, the QQQ shot from 505.56 to 510.15.
If you bought puts when QQQ got to 510 you would have been rewarded with a drop down to the current price of 503.30 at the time of this writing.
A couple of things to note, when we are saying “sell the rally”, that never means short the market.
It’s too dangerous.
Instead we buy puts so our risk is defined.
Here’s a trade I made today.
The QQQ was hovering between 506/507 and looked like it wanted to go negative.
I bought 100 of the 1/14 499 puts on the QQQ for .13.
Now, my expectations as not that they get there but that we have a down move that’s fast and powerful enough to create a spike in the option price.
That happened, the QQQ did go negative and those puts are currently trading at .34.
That’s over a 2k gain in under 2 hours if I held all. I didn’t :). I sold as we moved lower and currently am up $1336 in the QQQ trade.
The best part is my total risk was only $1300.
Even better, it didn’t have to get to my strike price. I just needed a down move with enough speed to inflate the options.
As a new trader, you could have tried it for 1 contract and a total risk of $13. That was the minimum to get in. That $13 would be worth $35 now and that’s with 4 hours to go in the trading day.
Trading is about recognizing patterns. The sooner you find them and the more you take advantage of them, the more success you will have.
This might only last a couple of weeks or months but as long as we see it we will ride it.
It also keeps you in sync with the market.
We haven’t added any new bullish positions this year and continue to collect dividends and premium which has allowed our portfolio to remain strong while the market goes down.
The key will be to continue to recognize these trends, trade these trends and adapt when they change.
By working together as a trading community, we continue to thrive.
Keep trading well,
Adam Mesh
Special Earnings Event Kickoff Tomorrow (January 15th)
[ TOMORROW] Trade options LIVE on 4Q earnings on the 15th
Options trader, Steve Smith (over at our sister company, Adam Mesh Live) is pulling back the curtain on how he trades options on earnings.
And he’s going to trade them LIVE in front of you at 1pm on January 15th.
The cost? Zero dollars.
Steve has an incredible track record trading earnings and it’s all been documented for the past 7 years. Just trading 1-3 contracts of his trades… usually costing just $20-80 per contract…
A trader following all his earnings trades could’ve made nearly $25,000 with a very small account.
You must claim your spot to get in on the free training. We could charge up to $299 for it, but you get it for nothing.
Steve expects some of the biggest moves of the year… especially as a new President takes over and businesses are expected to be bullish. (i.e. invest in growing). These trades closed in less than a day. No, every trade isn’t a winner… but, in the long term, Steve’s strategy has made money.
Watch and learn how to trade earnings LIVE on January 15th at 1pm est,