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Hey, it's Garrett. |
They just announced a $200 billion mortgage-backed securities purchase. |
Not through the Fed. |
Through the government directly. |
Which means we're back to money printing. Full stop. |
And I know exactly which stock wins when this happens. |
The play everyone's afraid to make |
I'm going long AIG today. |
Yeah, that AIG. |
The insurance giant that needed a $180 billion bailout in 2008. |
The poster child for "too big to fail." |
The stock most people still associate with financial crisis nightmares. |
Here's why I don't care about any of that ancient history. |
The pattern that's impossible to ignore |
Every time the United States government gets involved in quantitative easing... |
Insurance stocks rally. |
Every. Single. Time. |
2008 crisis response? Insurance stocks rallied after the initial panic. |
COVID money printing? Insurance stocks were huge winners. |
Now they're doing it again. Completely in the open. |
Look at the chart. AIG's sitting around $76.50 right now. |
The market hasn't figured this out yet. |
But we're looking at a move back to $82 pretty quick. |
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Why? |
When they pump liquidity into the system, insurance companies are the direct beneficiaries. |
They hold massive bond portfolios. |
Lower rates = higher bond values = instant profit. |
This isn't complicated. It's just math most people refuse to do on a stock they're scared to touch. |
The trade |
February 20th expiration. |
Buying the 75 call, selling the 82.50 call. |
The spread is trading between $2.90-$3.15. Let's call it $3 to get in. |
Max profit on the spread: $4.50 ($7.50 spread width minus $3 cost). |
That's 150% if we hit the top strike. |
But here's the thing... |
If we get to $82 by next week — which wouldn't shock me in this environment — we're looking at close to max profit on a $3 risk. |
They're printing $200 billion. |
This isn't a maybe. This isn't a Fed meeting where we guess what they'll do. |
They told us exactly what they're doing. |
Why nobody else will make this trade |
Because they're still fighting the last war. |
"AIG bad. Financial crisis. Remember 2008?" |
Yeah, I remember. |
I also remember that was 16 years ago. |
And I remember that AIG survived, restructured, and now benefits massively when the government prints money. |
Most traders can't get past the emotional baggage. |
They see AIG and think "crisis stock." |
I see AIG and think "liquidity beneficiary." |
What happens next |
I'm keeping a tight stop around that 100-day moving average. |
If we break significantly under current levels, I'm out with about a 15% loss on the spread. |
But the upside? |
We're looking at $82+ in a liquidity-soaked environment where the government just announced they're buying bonds hand over fist. |
The money printer goes burr. And stocks go up. |
This is great for momentum stocks. |
And this is especially great for insurance companies that directly benefit from bond market manipulation. |
The reality check |
Most people won't make this trade. |
They'll stick with Apple and Tesla and the names that feel safe. |
Meanwhile, I'm positioning for the stock that historically explodes when the government starts printing money. |
They're printing $200 billion. |
And by the way, when they do this, these things go up. |
The setup is obvious. The catalyst is announced. The pattern is proven. |
The only question is whether you can get past the 2008 headlines and focus on 2026 math. |
Want to see how I'm positioning for setups like this in real time? |
You can find me in the TheoTrade Chatroom, M-F. Click here to join. |
Stay Positive. |
Garrett Baldwin |
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