Exclusive New High-Probability MS Setup Revealed

My In/Out Spreads Trader is all about finding high probability setups which offer quick profit potential and limited risk. 

Most recently, I captured a 54% gain in Costco in 15 days, and a 32% winner in Goldman Sachs in a little over 24 hours. 

Now, I typically shoot for gains of 50% or more, but I have a rule that if I’m up by more than 30% in three days or less…I’m booking profits. 

Today, I want to share with you some exclusive trades, typically reserved for In/Out Spreads Trader subscribers, and walk you through my thought process. 

New Trade In Morgan Stanley

Based on today’s action the rotation trade isn’t dead. But we’re not witnessing what we saw last week, which was dump tech and buy the banks and the Russell 2000. 

It’s actually more of a two-sided market. 

I expect things to normalize even more. 

And if you take a look at the chart in Morgan Stanley (MS), you’ll notice the stock is up nearly 10% over the last month. 

More importantly, over the last few weeks it has shot up above the auto-expected moves. I used auto-expected moves to give me a range of how high and low a stock will go within a given week. 

Generally, I expect a stock to come off after it hits its top end of the range. But given the crazy rotation in financials, we saw MS blast through those levels on several occasions. 

That’s not sustainable in my opinion. 

And that’s why I want to position myself for a pullback. 

Here’s the thing, when I’m looking at trades, I’m trying to find a statistical advantage. I’m basing my opinions not on what I think about the company or its fundamentals. 

If there’s one thing we can all agree upon is volatility reverts back to the mean. And I believe this upside volatility we’ve seen in financials will come back down. 

That’s why I bought an August $104/$102 put spread expiring on the 8/23/24. 

I paid $0.97 for this spread. 

Here’s How It Works

I’m betting that MS trades lower between and the expiration date of August 23. 

This isn’t an aggressive trade, The $104 puts I bought are slightly in-the-money, so I don’t need a big move to be profitable on it. 

My max profit on the trade is the width of the spread minus my cost. 

In this case, the spread is $2 wide and my cost was $0.97, leaving me with a max profit potential of $1.03. 

Now, I’m not looking for max gain here, if I can get 50% I’ll gladly take it. 

But let’s say I’m dead wrong on this. My max loss is the cost of the spread, in this case $0.97. 

Why I Love These Trades

• These trades are cheap to put on. 

• They are small account friendly

• Defined risk

• You don’t have to micromanage the trades

• Potential for outsized returns

Shopping A Trade In NVIDIA

I’m also shopping around a trade in NVIDIA. 

If you’d like to learn more about it and the other In/Out Spreads Trader plays, click here to learn more.

To your success,

Don Kaufman