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Now keep in mind past trading results can't promise future success as trading incurs risk of loss.
For one, as we near the U.S. elections, we could hear more about potential legalization. After all, it’s a hot topic, and about 70% of the population wants to see legalization.
Two, Vice President Kamala Harris just said, “We need to legalize marijuana,” as quoted by Marijuana Moment.
They added: For the first time since joining the ticket as President Joe Biden’s running mate in 2020, Vice President Kamala Harris has called for the legalization of marijuana—signaling a possible shift in the administration’s platform heading into the November elections. Harris told a room of cannabis pardon recipients at the White House on Friday that “we need to legalize marijuana,” a participant in the meeting has revealed.
In addition, the Pew Research Center just found that about nine in 10 Americans (88%) said that cannabis should be legal for medical or recreational use. About 57% said cannabis should be legal for both medical and recreational use.
While investors can always jump into cannabis stocks, like Canopy Growth (CGC), Green Thumb (GTBIF), and even dividend-paying stocks like Innovative Industrial (IIPR), there are also ETFs:
ETFMG Alternative Harvest ETF (MJ)
With an expense ratio of 0.75%, the MJ ETF tracks the Prime Alternative Harvest Index, designed to measure the performance of companies within the cannabis ecosystem benefitting from global medicinal and recreational cannabis legalization initiatives.
Depending on the liquidity of the underlying stock, the spreads on options trades can vary from a few pennies to several dollars. This is why it’s very important that you scope out the liquidity and volume of not just the underlying stock, but the option as well. Too many websites jump headfirst into a call option only to face sticker shock when they realize the nearest bid is $0.50 below where they just bought the call. Don’t let this happen to you. Always watch how the options trade relative to the stock for at least 15 or 20 minutes – preferably during volume periods – to see how it trades. Always jot down the delta of the option, as that will be the first clue on the core movement of the contract.
A common newbie mistake is to jump headfirst into an option and then be shocked that the trade just started off with a big deficit based on the spread alone.
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