Please join guest speaker Keith Harwood, Option Hotline's President and Chief Options Strategist, as he explains how he and other professional traders navigate a low volatility environment to find high potential return trades.
Combining technical signals with options analysis can yield great leverage if done right. So make sure you tune in to find out how professional traders identify trades that have a high expected value in current market conditions.
Keith will also be available for Q&A at the end of the presentation, so bring your questions and enjoy the lively discussion!
All attendees will receive a free gift courtesy of Keith.
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Use any signs of weakness in the EV market as opportunity.
For one, demand is accelerating. According to the International Energy Agency, about a fifth of all cars will be electric this year. Sales are expected to grow by 35% globally to 14 million this year. The agency also noted that “more than 26 million electric cars were on the world’s roads in 2022, which represents a 60% increase relative to 2021,” as noted by CNBC.
Even more impressive, “Electric car sales — including battery electric vehicles (BEVs) and plug-in hybrid electric vehicles (PHEVs) — exceeded 10 million last year, up 55% relative to 2021,” according to the IEA, as noted by CNBC. “This figure — 10 million EV sales worldwide — exceeds the total number of cars sold across the entire European Union (about 9.5 million vehicles) and is nearly half of the total number of cars sold in China in 2022.”
Not only is that great news for electric vehicle stocks, like Tesla, BYD, and Li Auto, it’s also great news for the EV metal stocks and ETFs, including:
iShares Self Driving EV and Tech ETF (IDRV)
One of the best ways to diversify at a low cost is with an ETF, such as the iShares Self Driving EV and Tech ETF (IDRV). With an expense ratio of 0.47%, the IDRV ETF gives me access 59 EV-related stocks, such as Li Auto, Aptiv, BYD Ltd., Tesla, Samsung, Ganfeng Lithium, QuantumScape, ChargePoint Holdings, and dozens more.
KraneShares Electric Vehicles and Future Mobility ETF (KARS)
The Krane Shares Electric Vehicles and Future Mobility ETF (KARS) is starting to accelerate, too. With an expense ratio of 0.70%, this ETF provides exposure to companies involved in the production of EVs and their components.
It’s also benchmarked to the Bloomberg Electric Vehicles Index, which includes stocks involved with electric vehicle production, autonomous driving, shared mobility, lithium and/or copper production, lithium-ion/lead acid batteries, hydrogen fuel cell manufacturing, and electric infrastructure businesses, according to KraneShares.com. Some of its top holdings include Albemarle, BYD Co., Tesla, Panasonic Holdings, Aptiv, Samsung, and Lucid Group to name a few.
Correlation is a tough subject to get a handle on. Especially for me, since I always used to get confused when people started talking in higher mathematics, using funny looking symbols instead of regular old numbers. Nonetheless, correlation is an interesting subject, and one that is important to traders, so it’s worth devoting a little time and effort to understand how the markets interact with each other. However, keep in mind that in the final analysis, we should not be overly concerned with trying to find reasons why markets are acting (or not acting) the way they should, we just have to go with the flow.
Probably the easiest example to start with will be Stocks and Bonds. What do you think, are they positively correlated, negatively correlated, or is there no correlation? If you said positively correlated, you are right; most of the time, except when they are not. See, we’re confused already. Most of the time, stocks will follow bonds. They move together, with the movement usually being a reaction to the state of our national economy. Since the fixed income market is so much larger than the equity market, bonds are usually the leader and stocks are usually the follower. How many of you have seen a rally in the bond market and picked up the phone to buy S&Ps?
If you want to do this type of trading, you have to look at the underlying reasons for the move. This gets dangerously close to ‘fundamental analysis’, for which the great master Turtle had a large disdain. But even if you don’t go this far with it, you still must be aware of why the relationships exist as they do, so you can be alert to when they might change or even break down completely. For example, normally if bonds (which open first) rally in response to a (bullish) economic report, the S&P will tend to gap open higher.
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